Derek C. McCalmont M.D., M.S. Management
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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
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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%
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http://cgi.money.cnn.com/tools/retirementpl
anner/retirementplanner.jsp
http://www.bloomberg.com/personalfinance/calculators/retirement/
http://money.msn.com/retirement/retiremen
t-calculator.aspx
http://www.schwab.com/public/schwab/inve
sting/investment_help/retirement_planning/r
etirement_calculator
BIG!
What
Can
We Do?
Start
A New
Business!
Coffee
Donuts
Medicine
Franchise
Opportunities
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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
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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.
Love at First Sight
Since 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)
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Business Plan- Needed to secure financing
Detailed operating model- limited ability to
adapt (Bigger the company, less variability)
BrandTraining- None to months
Franchisee support
Software
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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
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Governed by FTC rules
Several Hundred pages long.
 Item
19: Financial
Performance
Representations”?”
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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.
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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
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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.
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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?
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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).
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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
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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
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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.
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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)
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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
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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
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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)
Questions?