The Economics of The Joint Chiropractic
Over the past 10 years, The Joint Chiropractic has flourished.
Today, over 600 franchises are spread throughout the world. That’s more locations than the other top ten chiropractic franchises combined.
On average, a new Joint opens every 48 hours.
Collectively, chiropractic is a $16 billion industry in the US. Yet, it’s fragmented. Over 95% of chiropractic practices are independent, and the top 3 chains make up less than 3% of the market.
After an explosive 28% revenue boost in the last year, The Joint now has an annual revenue projected to be over $70 million.
The margins at The Joint are famously good. Their average profit margin is equivalent to huge companies like Target (28%) and Walmart (24%).
They achieve these margins through a slick combination of limiting expenses, maximizing patient flow, and proprietary managed services.
The Joint keeps its prices low and has built an entire ecosystem of operations and marketing to help drive patients into their practices. How many patients? Well, last year alone, Joint franchises adjusted over 1 million people.
By offering walk-in services, they don’t deal with an estimated 20-30% loss on missed appointments. Imagine, for example, that your practice had zero missed appointments next year?
Additionally, they market specifically to people without complex medical and health conditions. Some say this model hurts chiropractic as a whole, while others welcome the convenience and establishment of the first scalable chiropractic brand.
The average cost to get a Joint Chiropractic franchise up and running is around $250k. While at first glance, it may seem like a lot more than most chiropractors spend opening their first practice, this sum is far less than nearly any other franchise out there.
The layout, square footage, and locations of The Joint are all carefully monitored to ensure the highest chance of profitability. The Joint is betting on a future with price-conscious patients looking to stay healthy, as long as it doesn’t cost them too much money.
The odds of success may be in their favor. With an executive leadership team that has worked at places like McDonald’s, Aamco, UPS Store, CVS, Walgreens, and United Airlines, this isn’t their first rodeo. Not only has this executive team helped them achieve an IPO in 2014 but they also have the connections needed to continue to scale. In 2020, The Joint received an influx of over $7.5 million in capital from JP Morgan Chase structured as post-IPO debt.
A typical Joint location is approximately 1,200 square feet, and with a retail build-out, they can save space and cost associated with rehab spaces, imaging, etc.
Since The Joint is focused on overall health and wellness as opposed to rehab and complex conditions, they can also put a significant amount more volume of patient visits through their practice. For example, the average number of patient visits per typical chiropractic practice is up to 600 per month, where a Joint franchise can easily be at 1,350+.
The combination of cash payments and the volume provides The Joint with a significant revenue advantage compared to the typical chiropractic practice. In the healthcare service industry time is money and The Joint has figured out a model that enables incredible patient flow that maximizes the space and revenue per hour of their team.
When you add in corporate, scaled marketing and proprietary EHR and patient management systems, The Joint has strategic business advantages in nearly every way over a local chiropractic practice.
By not accepting insurance and using an adjustment by hand process, The Joint has a COGS (cost of goods sold) extremely low. That helps pad the business’s profit margins and allows scale without having a tremendous amount of capital outlay.
The Joint 2021 Investor Deck
Jeff Langmaid is a chiropractor, author, and speaker. He is the founder of The Evidence Based Chiropractor, co-founder of The Smart Chiropractor, and author of Marketing Chiropractic to Medical Doctors. His podcast and social media presence have made him one of the most followed chiropractors in the world.
Throughout his career he has been featured on Yahoo Health, MSN Health, CBS News, ABC News, Prevention Magazine, Chiropractic Economics, and more.
The Evidence Based Chiropractor YouTube channel sits right at the intersection of research and marketing. All to help you grow and develop your practice.
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