There are many reasons to invest in a healthcare franchise, as the demand is both constant and growing. It offers a relatively low investment cost to open the doors compared to fast food or other product-selling franchises. There is tremendous versatility, from urgent care centers to cutting-edge technologies, and all are needed. It’s a solid investment that benefits your community, something you can be proud of.
However, before you commit, you must ask five essential questions to ensure you’re making a strategic investment well-established for future growth.
Question 1 – What is the Local Market for Healthcare Services?
Your first step to evaluating a potential healthcare franchise is, of course, to conduct a thorough local market analysis. This entails:
- Defining your market area
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- This might be a city, neighborhood, or a specific radius around a location
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- Analyzing local demographics
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- Government reports, census data, industry reports, and healthcare statistics
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- Evaluating the local healthcare needs
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- Public health reports, regional health surveys, hospital and clinical data
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- Analyzing the competition
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- Visit local competitors online and in person, review sites, and get feedback from locals
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- Investigating local regulations and licensing requirements
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- Contact the city or county clerk’s office, then consult with a legal advisor
- Conducting prospective customer surveys
- Investigate local events, community forums, and online survey platforms
With the results of your local market analysis in hand, you can better gauge the viability of your franchise plan. You may discover that a neighboring city offers a better fit for your proposed business or even that a different healthcare franchise better meets the needs of your preferred location and demographic.
Question 2 – What Kind of Training and Support Does Your Healthcare Franchisor Provide?
Possibly the most critical facet of any healthcare franchise opportunity is the amount and quality of the training and support the franchisor provides. After all, you’re buying into a successful model, and to duplicate that success, you and your staff will need the education and tools.
Start with the Franchise Disclosure Document (FDD). The franchise is legally required to provide this document spelling out 23 specific items about the franchise and its operations. Pay close attention to the sections detailing the training programs, ongoing support, and communication channels with the franchisor.
With the FDD information in hand, speak with other franchisees to evaluate their experience. Evaluate the training quality, length, and follow-up. Does it cover all the aspects of running your franchise, from healthcare to business management, operations, technology, and marketing? Are there additional resources, such as proprietary software or an approved resource for further research? Review the success and failure rates for the franchise. A high failure rate may indicate inadequate support.
Question 3 – How Committed is Your Franchisor to Technological Growth?
Technology is a critical component of any successful healthcare franchise. Everything from the software for operations management to the customer relationship management (CRM) system and digital marketing tools is fundamental to any business enterprise. You may also have technology specific to the type of healthcare your franchise will practice. You must achieve facility with the technology and grow your use as it evolves. Evaluate your franchisor’s relationship with technology to determine whether they will remain at the forefront of innovation or if the competition is likely to pass them by.
Start with the FDD to investigate the franchisor’s report on their use of technology. Examine a current franchise’s existing technology and inquire about recent updates and upgrades to evaluate the commitment to staying current. Research the company’s history of innovation through industry journals, reports, and reviews. Attend franchisor presentations and discovery days to ask direct questions about adopting and implementing critical technology. Ask specific questions about planned upgrades.
Evaluate the company’s online presence, digital marketing tools, and strategies. Don’t forget to scan their social media accounts for mentions of innovation.
Question 4 – What Industry Trends Pose Potential Challenges?
Before concluding your research on your healthcare franchise, consider the industry trends. In 2024, we’re seeing significant trends powered by generative AI. We anticipate growth in AI chatbots and virtual assistants to answer prospective patients’ concerns and potentially provide follow-up communication after treatments. Increasingly, virtual healthcare assistants may be used to schedule appointments and remind patients to take their medication or complete their exercise routines.
Preventative care is also a strategic priority for 2024. Patients are increasingly willing to invest in their health before problems manifest to maintain their health. Generative AI and wearable digital technology offer ways to encourage exercise and preventative maintenance. Regenerative medicine, virtual reality, and 3-D printing of everything from surgical implements to prosthetics and implants all provide exciting glimpses of the future of medicine today.
Be sure to study industry reports and market analysis to gain more insight regarding industry trends most likely to affect your planned franchise. Attend industry conferences and webinars to network with other professionals. Keep a close eye on technological advances and regulatory changes.
Question 5 – What are the Realistic Costs and Growth Potential for Your Healthcare Franchise?
Much as we wish we could focus entirely on the well-being of our patients, a healthcare franchise is an investment that takes money. While there is likely tremendous opportunity for growth and return on your investment, closely analyze the financial details of your proposed investment. Start with the Franchise Disclosure Document (FDD), which outlines the initial and ongoing expenses, including franchise fees, equipment costs, royalties, and staffing recommendations. Contact existing franchisees to gain insights into actual costs, revenues, and growth experiences. Explore the facility leasing, purchasing, and renovation opportunities. Remember to focus on ongoing expenses as well as start-up costs.
Consider, too, the franchise’s exit costs and potential resale value as part of your long-term analysis.
By examining the market viability, available support and training, technology advancements, industry trends, and realistic costs, you’ll be prepared to open your healthcare franchise confidently.