Derek C. McCalmont M.D., M.S. Management 35y.o. Retire at 50. Live to 100y.o. (die penniless) ...
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Transcript of Derek C. McCalmont M.D., M.S. Management 35y.o. Retire at 50. Live to 100y.o. (die penniless) ...
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Forget Taco Bell- Franchise Opportunities for
Emergency Physicians
Derek C. McCalmont M.D., M.S. Management
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General Tso
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YUM BRANDS
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35y.o. Retire at 50. Live to 100y.o. (die penniless) Inflation 3% Returns 5% Spend $150,000 $7,578,643 per ING
What’s Your Number?
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Same Assumptions Plus Income $290,000 (inc. spouse) Savings $200000 IRA $500000 Contributions 5% Includes Social Sec. $5,116,378 per CNN IF- Portfolio returns 11.4% Likelihood- 21%
What’s Your Number
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http://cgi.money.cnn.com/tools/retirementplanner/retirementplanner.jsp
http://www.bloomberg.com/personal-finance/calculators/retirement/
http://money.msn.com/retirement/retirement-calculator.aspx
http://www.schwab.com/public/schwab/investing/investment_help/retirement_planning/retirement_calculator
Online Calculators
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BIG!
Your Number Is….
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What Can We Do?
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Spend Less
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Work Longer
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Leave less behind for kids
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Retire to Mexico
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VEGAS IS CALLING!
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Start A New Business!
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CoffeeDonutsMedicine
What Do We Know?
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Franchise Opportunities
What Do They Have in Common?
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Well over 3000 franchise businesses in U.S. with 2-10,000+ units.
“Over 50 franchises are sold each day”- Economic Outlook
Top 106 Franchises= 9945 new units/yr. 10 largest franchise systems=%50.2 total
sales Many offer multiple levels of
investment/opportunity from different sized single units to multiple units.
Bricks and Mortar vs. Home vs. Internet
A Few Facts On Franchising
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Who’s #1?-
Quick Service Restaurants- Sandwiches (6), Frozen Yogurt (4)
Senior Care (10) Commercial Cleaning- low start-up costs Janitorial Services- 3 in the top 10.
Fastest Growth Categories (By Growth in Operating Units)
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What are the largest franchise systems?
Love at First SightSince introduced in 1966, close to 6.5 billion Slurpee® drinks have been sold, almost enough for every person on the planet
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Franchise Fees- $0-$100,000+ Standard Royalty Fee- 6% of gross Advertising- $? Usually goes into a regional
budget which may or may not benefit your location.
Total Investment- $2000-$13.5 Million (Hampton Hotels)
How Much Does It Cost?
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Business Plan- Needed to secure financing Detailed operating model- limited ability to
adapt (Bigger the company, less variability) Brand- Training- None to months Franchisee support Software
What Do I Get?
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Minimal Info on-line Complete an information form (financial) Sign a non-disclosure Attend a “Discovery Day” Obtain a Franchise Disclosure Document Do your own industry research- all
franchises predict growth of their industry- no different than any non-franchise business
How Do I Learn More?
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Governed by FTC rules Several Hundred pages long.
Item 19: Financial Performance Representations”?”
The FDD
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Coffee andDonuts Anyone?
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Multiple Locations only Only 4 markets available in the U.S. KK Factory Store- $1M Finances- $1M in liquid assets, $2M Net
Worth.
Krispy Creme
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Franch. Fee $40-80K Royalty Fee 5.9% Total Inv. $310K-$771K Coffee makes up 60% of sales Margins on coffee “exceedingly high” Coffee>breakfast sandwichs>donuts IPO June 2011 $19…March 5, 2013 $38.15
Dunkin’ Donuts
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270M Potential Customers 70% drink coffee= 189M Seattle has 1 coffee shop per 2,500 people Nationwide 24,000 to 1 Currently 12,750 shops (SBUX 6,700) Mature market 7,500-1 or 30,300 shops Regular customer is worth $700/yr.
Coffee Industry
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Franchise Fee $30,000 Initial Investment $176-$340K Royalty and Marketing 9.24% Net Sales per cup $3.24 Cups to break even 263 Assumes owner functions as manager AM
shifts (assists with customers when busy) 363 cups/day = approx. $100k profit/yr. How many can you sell?
Mystery Coffee FranchiseItem 19
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Pro- Modest start-up costs Pro- High Margins! Pro- Relatively easy to learn operating model Pro- Growing market (? Less ideal locations) Con- Owner as manager (to start) Con- Employee turnover/training Con- Need multiple franchises to make
economic sense for doctors Con- Retail experience helpful (but we have
customer satisfaction experience).
Coffee Pros and Cons
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Open for 30+ years 8700 centers in the U.S. 85% Open 7 days/wk. Avg. 342 patients/wk. Over 150 Million Visits Annually 50% physician owned 21.7% Emergency Medicine
The Urgent Care Industry
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Increased Access Lower Cost Improved Quality ? Only 57% of Americans with a PCP have
access to same or next day appointments 63% report difficulty with access on nights,
weekends or holidays. 20% of adults waited 6 days or more to see
a doctor when they were sick in 2010 45,000 too few PCPs by 2020
Is The Time Right?
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Patient Centered Medical Home New accountability New IT “Enhanced Access” Expand office hours and accept more
unscheduled patients vs. partnering for episodic UC visits.
PCP Partners
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Avg. cost of an UC visit is slightly BELOW the average primary care visit ($155 vs. $165)
Difference in cost between an UC and ED visit for the SAME DIAGNOSIS ($228-$583).
116.8M ED visits per year x 27.1% (est. 8-57% non-emergent)= 31.64M visits= cost savings $7.22B-$18.45B per annum.
Does NOT include 30M newly insured with no place to go. (Suggests room for additional centers in areas already served)
Lower Cost
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Fevers URIs Sprains/Strains Lacerations Contusions Back pain Most can treat fractures and give IV fluids Most have x-ray and lab processing onsite
Common Conditions
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NOT freestanding EDs- Not equipped for life threatening conditions.
NOT in-store retail clinics (broader scope of services and ages, primarily physician or physician/MLP staffed vs. MLPs alone).
Many offer scheduled primary care visits and/or physical therapy.
New Options Emerging
Market Niche
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Franchise Fee $55,000 Royalty Fee 6% of gross sales Initial Investment $526K-$715K (inc. FF) Net worth $750K, Liquid Investments $350K Multi-unit discounts available. Term- 15 years with 4 optional 5 year
renewal terms. Advertising fees $1000/month spent in local
market plus unspecified “ad fund” contributions when “deemed appropriate”.
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Founded 2005 by an EM physician Board Eligible/Board Certified physicians- no
MLPs, no residents In-House pharmacy Lab and X-ray on-site Occupational Medicine Billing Services via “specialized approved”
vendor Software System- Intake, scheduling,
integrated payroll/benefit etc.
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No direct financing available. No prior industry experience required Training- 5 days at corporate headquarters
(you pay travel/lodging) plus on-site training around opening, on-line learning modules, webinars etc.
Support- Operations manual, periodic on-site visits, e-mail, phone, on-line support services website, hiring
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Assistance with licensing and credentialing Advertising materials Site selection Center design
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All Board Certified Emergency Physicians Offers Lab, CT, Ultrasound Accept Chest Pain, Abdominal Pain but no
ambulances Open 8A-10P Online check-in Urgent Care co-pays www.urgencyroom.com
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Pro- We know the medicine Pro- Growing Market Pro- No overnight shifts/limited day shifts Pro- Modest volume (30 patients/day) is
profitable Con- Significant start-up costs Con- Unpredictable future reimbursement Con- Focus is on building the business, not
seeing patients. Con- Structured model (Often difficult for
physicians)
Urgent Care Pros and Cons
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Questions?