I was reading the story of how a potential Doctors Express franchise owner was turned down for a franchise loan, and my first thought was this;
I would have turned him down, too.
Would you like to know why?
No Medical Background
Doctors Express is a very young franchisor. The concept itself is really, really new.
From their website;
“Doctors Express provides high-quality, urgent care right in your neighborhood! When you come to Doctors Express you’ll be treated by licensed medical professionals who are on-site every day, including doctors, nurses, and x-ray technicians. This guarantees you receive the highest quality medical care.”
I know what you’re thinking. yes…on the surface it sure sounds like a franchise business that’s needed. Urgent care centers generally suck, and they’re always crowded. I’m not trying to be a franchise party-pooper. But, I do have a couple of concerns. First, read the CNBC article, and them come right back.
The Business of Medicine
I wouldn’t want to get into the medical business without a background in medicine.
Think about it for a moment. First off, the US Government is heavily involved. That means that there are thousands of pages of regulations..rules. (In addition to the rules and regulations that are imposed by the franchisor.) Does being a franchise owner in a highly regulated business sound attractive? And, before you answer that question, really think about it. If your answer includes “For enough money I would,” it’s a weak answer. Go deeper.
Making a lot of money only goes so far if your ownership experience sucks.
Franchise Loan Approvals Shouldn’t Be Automatic.
The gentleman in the story needed to come up with $1.2 million. That’s on the high-end of a typical franchise investment. It’s huge.
“But, Joel, what if he can get a return on that investment relatively fast? What if he can make $250k a year?”
It would be great if he could make a lot of money as the owner-and get his up-front investment back quickly. I’m all for it. But, the reality of franchise ownership is this;
A gentle tip from The Franchise King®:
Do not buy a franchise until you know EXACTLY how to do thorough research.
Learn how here
Rick Kimsey isn’t a doctor. His background is in wireless telephones. Please tell me how that’s going to help him relate to physicians and nurses. If I was a banker, I’d turn his franchise loan down just based on that alone.
It’s not like he would be owning and operating one of these franchises-where his management skills could be used to manage his managers….and keep expenses in line.
In a franchise like Doctors Express, franchisees are dealing with medical professionals…well-educated individuals who specialize in treating humans-saving lives. It’s a different ballgame.
I understand the philosophy behind the Doctors Express business model. It’s simple; award franchises to business professionals, not medical professionals. That way, the business-side of things can be managed. The doctors doctor, and the business people do business. Sounds like a plan.
Bankers And Franchise Loans
It’s still challenging to get small business loan approval. But, it can be done.
But, bankers are a conservative bunch, and getting approval for a $1.2 medical franchise isn’t going to be easy, especially for someone without a medical background.
(I expect some comments under this post telling me otherwise…from the franchise sales team.)
(Occasionally, I write about a franchise or business opportunity that I’m not 100% sold on. But, I’m open for discussion on them, and I encourage the executive team behind these concepts to add their comments-right under the posts. It’s a great way for brands present the benefits of their opportunities to readers of this franchise blog. And, who knows…maybe I’ll learn a few things, too.)
More urgent care centers are needed…I’m just not sure if this is the way to go.
But, you never know. In 5 years, there could be 300 Doctors Express franchises dotting the landscape.