Franchising The Medical Industry
A developing concept will bring new tenants to retail centers across the nation.
Jaime Lackey

A new concept is coming to a retail center near you. Convenience Care Clinics Franchise Company Ltd. is launching a medical franchise concept. “We are the only full-service, total turn-key franchise opportunity in the medical industry,” says CEO and co-founder Brad Miller “We established Convenience Care Clinics to provide fast and simple healthcare through our clinics, which specialize in non life-threatening illnesses and conditions and to provide back-office practice management services to the clinics.”

At these clinics, nurse practitioners and physician assistants diagnose and treat common health problems, handle preventative medicine (including immunizations and sports physicals) and triage patients to the appropriate level of care in approximately 15 minutes for about $50. (Patients with accepted insurance plans pay only their co-pay.) Nurse practitioners and physician assistants also prescribe and/or dispense medication as appropriate.

Each 1,000- to 1,500-square-foot clinic will feature a small reception area, a triage area (where patients have their blood pressure and vitals checked), a handicap-accessible restroom and two small exam rooms, as well as a small office for the nurse practitioner or physician assistant that runs the clinic.

To develop the franchise program, Miller, a former multi-unit McDonald’s franchise owner/operator, joined forces with Dr. Kevin Letz. In 2001, Letz opened MedSpot medical clinics in Indiana. This was one of the first retail-based health services companies to open what is known as a convenience clinic. Letz, who also founded Clinicians Consulting in 2003, has helped to open more than 30 individually owned clinics in 12 states.

The concept of convenient care has become popular with units embedded in large retailers like grocery stores, CVS/pharmacy and Wal-Mart. In fact, Wal-Mart is planning to open 400 embedded units in the next 2 years and 2,000 in the next 5 years. But there are less than 1,000 in-line or stand-alone clinics open in the United States today, according to Miller. Convenience Care Clinics plans to open 36 clinics in its first year and more than 1,000 clinics in its first 5 years.

The first clinic will be a corporate-owned facility, which will open in Oklahoma City this summer, and the company plans to start franchising in September. Miller expects that 10 to 25 percent of the clinics will be corporate clinics while the rest will be franchised.

“Within the first year we will begin to open more than 20 clinics per month,” Miller says. “Our development team is prepared to build small boxes on outparcels of major shopping centers and individual parcels of land. Convenience Care Clinics will be one of multiple tenants to utilize the buildings.”

The company has a national construction management team to handle construction processes for new buildings as well as build-out of existing retail spaces across the country. The company also has agreements with national sources for all medical equipment, furniture, supplies, computers and software.

Convenience Care Clinics Franchise Company will sell a minimum of five clinics to franchisees. These franchisees are not required to have a medical background. “We’re looking for senior management and business owners — people with a business background, people who know how to manage [employees] and run a business,” Miller says.

The franchise fee is $25,000 per unit. At signing, the franchisee pays the initial $25,000 fee plus a $10,000 deposit on subsequent units to be opened. Other fees include a 5 percent royalty fee and a 2 percent national advertising/marketing fee. Each clinic is also required to spend 3 percent on local advertising. Revenues are projected at $500,000 to $600,000 per year for each clinic.

The company has developed a strong training program. Clinic staff will train for 2 weeks at the company’s Oklahoma City headquarters and will receive 1 week of on-site training when the clinics are opened. Training classes go over every aspect of running the clinics as well as building the business throughout the community. Topics covered during training include safety, new patient process, HIPAA (Health Insurance Portability and Accountability Act of 1996), risk management, insurance, purchasing, information systems, billing procedures and human resources.

As a franchisor, Convenience Care Clinics Franchise Company provides a turnkey program for opening new clinics. From the time the franchise agreement is signed until the clinic opens, the company’s project manager handles every aspect of opening each clinic, including real estate site selection, design and build out of the clinics, medical equipment delivery and set up, supplies (including medications), computers (hardware and software) and the grand opening marketing program.

The company also ensures that each nurse practitioner and physician assistant has the proper credentials required by major insurance companies, Medicare and Medicaid. And the company provides continuing support for clinics: it performs quarterly operational audits at each clinic, handles negotiations with major insurance carriers, and handles billing for all of the clinics. A field operating consultant is assigned to each clinic and is available to answer questions 24/7. This consultant performs operational audits to evaluate quality, cleanliness, sanitation, marketing, operational management, customer service, billing procedures and clerical work.

“We have to keep standards up,” Miller says. “The success of any franchise depends on a strong operations program and we have that.”

Additionally, all nurse practitioners and physician assistants must be under the guidance of a local physician. Convenience Care Clinics arranges for local physicians to oversee and evaluate the work performed by each provider for a per-file or monthly fee. “This is a great referral program for the doctors,” Miller says. “If patients need care beyond what the clinics offer, they will refer the patients to these doctors or to a specialist.”

In terms of locations, Convenience Care Clinics are quite versatile. “We prefer a small outparcel in the front of a retail center so that we don’t get lost in a center,” Miller says. The company’s consumer base is female, age 25 to 55, because she typically handles the healthcare for the family. The company likes to be near retail tenants, like Starbucks and grocery stores, that attract this consumer. The company also plans to target locations near daycares and elementary schools or near medical facilities, including hospitals, doctors’ offices and urgent care facilities.

The concept will also work in demographically diverse areas, according to Richard Chase, a broker with Bitzer Real Estate Partners/CORFAC International in Denver and director of real estate for Convenience Care Clinics. He explains that clinics work in metropolitan areas or rural areas with populations as small as 40,000. And they work in mid- to higher income areas as well as ethnically diverse areas.