Health Franchise: everything the dentist must know to establish multiple income streams

As a business structure, a health franchise can certainly be an attractive option. With several advantages, this type of company is quite chosen by medical and dental professionals who wish to start or expand their ventures without great associated risks.

A health franchise offers the advantage of operating under the banner of an already established business. The brand and operational techniques are already tested and ready to be implemented in a new location. This makes the model an important opportunity to expand its operations and revenue.

Read on and see everything you need to know to invest in a health franchise!

1. OVERVIEW OF THE HEALTH FRANCHISE MARKET

The most difficult part of having a company, without a doubt, occurs in the initial stage, in which you need to write a business plan, conduct market research, create a viable product, test that product / service and, finally, scale (if the test is good). Buying a health franchise helps you skip this huge step.

The system has already been tested and proven to work. Now, it's up to you to apply the system in your market. Franchises carry a name that people know and trust. Getting customers to recognize your brand is an extremely difficult task, especially at the national level. This is a valuable added value.

An important part of the success of a health franchise is its easily replicable system, which includes training employees in all locations where business is conducted. The owner will receive full support, usually with training on opening procedures, daily operations, using point of sale software and more.

The acceptance of this model is reflected in the market figures. According to ABF (Brazilian Franchising Association), the sector returned to growth in 2020, with revenues exceeding 170 billion reais, being 7% higher than the previous year, even during the pandemic months. For the third quarter of 2020, the numbers were also positive, with growth of 6.1%.

The research revealed that, in 2020, the total of units in the sector grew 5.2%, with a balance of 7,570 new operations, totaling 153,704 units of active franchises in Brazil. This result was more than double the variation recorded between 2018 and 2019.

We also have a very important legal support provided by Law No. 8,955, in force since 1994. The law provides for the rights and obligations of franchisors and franchisees, which makes the franchise market in Brazil a serious and organized business.

Health care exists regardless of economic conditions, and the demand for services increases every year. For this reason, according to data released by ABF in 2020, the health, beauty and well-being segment is the 2nd largest in the country, with over 30 billion reais in revenue (second only to Food).

The expectation of the association for 2021 is an increase of:
- 8 to 10% in billing;
- 5 to 6% of the units;
- 1% of networks;
- 5% in new jobs.

This scenario reveals a heated sector that, added to the government's actions to boost private initiative, is receiving large investments in several Brazilian states.

2. WHY INVEST IN A HEALTH FRANCHISE

Purchasing a health franchise is especially interesting for start-up business owners. In most cases, they offer a tried and tested way of doing business that removes a variety of startup risks. Some of the benefits include:
- brand recognition;
- marketing support;
- knowledge of products or services on the market;
- established commercial systems with continuous support;
- designated geographical operational territories that manage competition;
- purchasing power combined with suppliers;
- reduced failure rates compared to other start-ups.

The first thing we have to highlight is the difference between a fad and a sustainable trend. Unfortunately, some franchise models were built on fads and were not successful in the long run.

Fads may make financial sense for some business models that offer mass-marketed products while fashion is “hot”. However, it may not be a good option for a health franchise due mainly to the long-term growth model on which it depends.

A sustainable trend, on the other hand, is a change in the market that occurs for several reasons and creates a new reality. This also creates excellent opportunities for those who can “read the trend” and get in at the right time.

We have all heard the phrase “the right place at the right time”, and we have seen many people get rich by taking advantage of trends with upward growth potential.

One of these trends is the merger of healthcare with franchise. The healthcare industry is beginning to adopt the franchise model to organize owners / operators and expand. Below, we list some of the main reasons for this.

MEETING DOCTORS, DENTISTS, CLINICS AND BUSINESSES, WHICH CREATES A NEW SYNERGY FOR SUCCESS

Doctors, dentists and clinicians receive incredible education for their respective medical or dental practices, but almost no management training. This is shocking when you consider that most of these individuals end up starting their own business.

Many doctors and dentists struggle with the business side of their practice and wish to focus on being a doctor / dentist. Many of the new franchises offer partnership options, where doctors, dentists and any other professionals can have a unit together. In this way, doctors and dentists can focus on practice and too many professionals can focus on building business, marketing, human resources, technology, leadership, operations and finance.

PROVIDES BUSINESS ASSISTANCE

When purchasing a health franchise, you are buying an established concept (business intelligence) that has been successful in several regions and, in order for this model to be replicated in new units, the owners receive assistance throughout the management period. With the partnership, the franchisee receives all the necessary equipment, supplies and instructions.

In many cases, there is ongoing training and help with management and marketing. For example, one unit will reap the benefits of national brand awareness campaigns (financed by the parent company).

OFFERS CONSUMER A RECOGNIZABLE AND CONSISTENT BRAND EXPERIENCE

Many people think of fast food when they see the word franchise, but the brands we depend on daily and rely on our biggest decisions tend to be franchise. Today, the consumer is very familiar with such brands and is comfortable with the business model.

This allows the operator to enjoy the benefits of a recognized brand health franchise, which makes them look bigger and grow by adding more locations.

OFFERS DOCTORS AND CLINICS THE ABILITY TO COMPETE WITH LARGE ORGANIZATIONS

Many doctors and clinicians are having a hard time staying exposed due to the large companies that reach their markets. Corporate medical and dental organizations are growing and dominating regions in record time. They have huge marketing and infrastructure budgets that small professionals don't have access to.

Franchise organizations bring together individual business owners under a brand and offer benefits such as purchasing power, marketing and operations systems, training, and franchisee support. All of these elements level the playing field for operators to not only compete, but to grow and prosper.

3. BODY CARE TRENDS AND AESTHETIC CONCERNS

According to the Brazilian Association of the Personal Hygiene, Perfumery and Cosmetics Industry (ABIHPEC), even with the crisis in the country, the aesthetic market grew 567% in the last five years, employing more than 480 thousand professionals. In 2020, the sector moved 47.5 billion reais. The expectation of the association for 2021 is a 2% increase in revenue.

So, whether you're a veteran of the industry or just starting out, this is a growing industry, full of opportunities for everyone. Below, we list some of the medical aesthetic trends you need to know.

GROWING DEMAND FOR A HOLISTIC TREATMENT SOLUTION

Patients seek convenience and complete solutions. To meet this demand, aesthetic clinics are repositioning themselves: from places where an aesthetic treatment is performed to true wellness centers.

These centers see wellness as a whole and offer a variety of solutions to address patient concerns. For example, in addition to undergoing skin treatments, the patient is invited to consult a nutritionist and a fitness specialist.

INCREASED REGULATIONS ON AESTHETIC TREATMENTS

As the aesthetic field became more profitable, there was an increase in the number of treatments performed without the right qualifications or with the use of prohibited materials. Regulatory bodies around the world have started to take action against these illicit practices and have introduced a variety of fines and reprimands.

INCREASE IN AESTHETIC CHAINS AND FRANCHISES

The franchise sector grew 7% in the 1st quarter of 2020. In the accumulated in 12 months, the increase in sales was 7.5%, rising from R $ 165.2 billion to R $ 177.5 billion.

Since then, the market has been dominated by small independent companies. However, this is changing, so medical networks are gaining momentum.

ABF's quarterly survey also pointed out that there were more stores opened than closed in the 1st quarter of 2020, resulting in a positive balance of 2.5%. Today, there are 156,700 franchise units in the country. The health, beauty and well-being segment grew 9.2% in the same period.

NON-INVASIVE TREATMENTS

Patients are increasingly opting for non-invasive treatments instead of surgical alternatives. Among the main reasons, we can mention the lower treatment risks, greater cost-benefit and faster results. In addition, there is an increase in the acceptance and popularity of these treatments in men.

In recent years, there has been an increase of about 400% in the procedures performed on male patients, according to the Brazilian Society of Plastic Surgery. Some of the most common treatments are:
- facial harmonization with Grid 21;
- inomodelling;
- botulinum toxin;
- biostimulators for the contour of the jaw;
- body ultraformer;
- low frequency laser for the scalp;
- dental (porcelain veneers, contact lenses and whitening).

BEHAVIOR CHANGES AND TECHNOLOGICAL ADVANCES

New technologies and innovations tend to steal the spotlight each year, gaining spikes in online surveys that may fade over time, but generally lead consumers to explore similar treatments.

With frank conversations about modern beauty procedures popping up on social media, as well as many celebrities and influencers discussing their treatments, the stigma surrounding medical aesthetics has abated.

With this more open discussion, along with technological advances, medical aesthetic treatments (minimal and non-invasive procedures) are becoming much more accessible to a larger portion of the population.

With the growing number of possible “lunchtime” procedures, time is no longer a constraint. The personalization trend should also continue, as patients are looking for tailor-made solutions and recommendations from reliable sources.

All of these factors contributed to a more accessible medical aesthetic sector, with a lower entry barrier. In other words, the possibilities for growth are enormous - the market continues to open and the social stigma continues to fall.

4. DENTAL CLINIC FRANCHISE

Dentistry is undergoing many changes - the biggest one is in the perception of patients. A few years ago, the profession was oriented towards the family or a community. For example, most of our parents and grandparents used to visit one or two professionals, the “family dentists”.

The dental health of a small community has always been attended by few dentists in that area. In a sense, dentistry used to be more personal. This type of dental practice still exists, but it is decreasing at an accelerated pace.

With the digital transformation in dentistry and increased competition, individual activities gradually transformed, creating extensive networks for a given brand.

Initially, only a few companies with a lot of capital could join, but in the past 10 to 15 years, many dental franchises have evolved around the world. Dentists who were struggling in the dental market decided to join the strengthening of the dental chain system.

You shouldn't be surprised. In all countries (developed and emerging), dentists are grouped in health franchise networks before any international company (with great investment power) enters the market.

The dental company, in particular, raises a great deal of capital to build the brand, creates a scalable operation and allows other dental clinics to use its brand and management models.

Yes! We live in the era of the dental franchise. However, some precautions when choosing your network are important, as mentioned below.

SIMPLE STRATEGY

If it is too complicated to understand, it is probably not the right solution for you. To avoid headaches, look for a health franchise that offers a clear and straightforward business model.

PREDICTABLE, RELIABLE AND STABLE BUSINESS MODEL

Verify that the network has developed a proven business operations process and advertising and marketing strategies, as well as general procedures for starting and managing profitable units.

The service model needs to be effective and constantly improving. Prefer a franchise that is always considering innovative solutions to make your company more efficient.

EXPERIENCED TEAM

The corporate team needs professionals specialized in business, medicine and franchising. It is essential to obtain all the support necessary to prosper as an owner of one or more units.

UNDERSTAND YOUR COMPETITION

Carefully consider the competitive landscape before selecting the right opportunity for you. To position yourself uniquely and dominate a highly fragmented market, observe the differentials, know-how and recognition of the franchise.

GROWTH AND SCALABILITY OPPORTUNITIES

Make sure you are partnering with a central dedicated to operators of multiple units (multi-franchised). It is interesting to prefer companies with a focus on development and scale.

MULTIPLE INCOME FLOWS

Look for opportunities that offer a variety of ancillary products and services that generate revenue. Also, make sure that operating costs, clinic expenses and franchise fees make the scale affordable. A conversation with current owners can resolve most of these questions.

5. ADVANTAGES OF INVESTING IN DENTISTRY OF DENTAL CLINIC

Running a dental office is never an individual job. Although it is based on the dentist, there are many other areas that play an important role.

A dental clinic is successful when all components of the system work together: marketing, finance, people management, accounting and operational.

For any dentist, it can be daunting to manage all aspects of a dental clinic on your own. Individual practice can be very stressful, not to mention that:
- the patient's expectation is high (and is increasing every day);
- they expect a comfortable experience in dental treatment, in addition to competitive prices;
- to make a comfortable and well-furnished clinic, a reasonable investment is required (which can compromise your working capital at the beginning of the operation).

Franchise networks come with huge investments in marketing and a structured model. They help in choosing the location and the best dental equipment. That way, you can focus on your service specialization. See below for other benefits for franchisees.

RECOGNITION OF THE SERVICE

A franchise company offers a product / service that has been marketed locally, nationally or internationally for years. By investing in the business, you are acquiring the rights to offer something that many people are already familiar with.

MARKETING HELP

Franchises benefit from the parent company's marketing programs. The campaigns created by the head office allow you to have more time to focus on daily appointments. This is a win-win model, as it stimulates the sales of your unit and, at the same time, increases the collection of the chain.

GUARANTEED TERRITORY

In most cases, a franchise holding company will guarantee a predetermined territory and help you succeed in the region. You can work in an exclusive location, without the risk of competing with another unit on the same network.

SUPPORT AND SUPPORT

Some parent companies offer invaluable assistance to their franchise locations. Support options can include:
- help center for accounting issues;
- assistance in the payment of supplies;
- marketing materials;
- online and classroom training (book on franchises, sales courses, management, customer service and much more).

The training provided by the parent company will help franchisees gain or strengthen the skills needed to operate the company. You can also get support from other franchisees in the chain (conventions or annual meetings are common in these systems).

SUPPLIES

When starting a business, it is necessary to spend time researching suppliers to find those with the best deals. In a health franchise, for example, you are given access to suppliers with the products and prices that will make your business more profitable. It is also possible to take advantage of the cost savings obtained with the purchasing / negotiating power of the group.

SHARED SUCCESS

A growing parent company also benefits franchises. When the public reads about the success of the brand, the news can help improve the image of the partners. A growth in the parent company's revenue may help open more resources for franchises.

Source: Sorridents Simples Como Sorrir. Available at: https://sorridents.com.br/business/franquia-de-saude-tudo-o-que-voce-deve-saber-para-investir/. Access on: 01/22/2021.