Most physicians already know what it costs to learn a skill the hard way. On the Wealth Planning for the Modern Physician podcast, host David Mandell, an attorney and OJM Group partner, sits down with Matt Stevens to unpack why doctors, dentists, and other busy medical professionals are looking at franchise ownership as a way to diversify income, without giving up the practice they already built.
Key Takeaways from This Episode
- Franchising buys down the learning curve. Instead of spending three to seven years making expensive mistakes on your own, a franchise fee gets you the playbook, the training, and a support system from day one.
- There are roughly 4,300 franchise brands across 80 industries, evaluated against about 30 different ownership criteria, so physicians are not limited to food and retail.
- Physicians rarely need to run day-to-day operations. A managing operator, a family member, or a semi-absentee structure can carry the business while the physician stays focused on their practice.
- Item 20 of the Franchise Disclosure Document shows three years of franchisee turnover data and is one of the clearest tools for spotting a healthy system before you invest.
- Some franchise structures allow tax advantages, including property-related deductions, that can meaningfully offset a physician’s income in the early years of ownership.
- Franchisors earn most of their money on ongoing royalties, not the upfront franchise fee, which means the best systems have a real financial incentive in your success.
- Matt Stevens works with candidates at no cost. He is compensated by the franchisor out of the franchise fee, so a physician pays the same fee whether they use a consultant or not.
- Exit planning starts on day one, not year ten. Owners who plan their eventual sale from the beginning tend to build more transferable, more valuable businesses.
Why Franchising Appeals to Physicians With Limited Time
Matt Stevens has worked with a lot of doctors and physicians of all kinds around the country, and the reasoning he hears from them keeps coming back to the same idea: we all live finite lives, and physicians understand that better than most. The question he poses to candidates is simple. Do you want to spend the first three to seven years of a new business making expensive, untimely mistakes you cannot predict, or would you rather spend a franchise fee and buy down that learning curve significantly? A franchise can put an owner in year one, two, or three of a business where they would otherwise have landed in year five, seven, or nine on their own.
For physicians specifically, Matt described the “ownership criteria” that matters most as limited time involvement and something that does not create urgency competing with their medical practice. That is a very different filter than what a typical franchise buyer uses, and it is why semi-absentee franchise ownership comes up so often in these conversations. A physician does not need to be the one opening the store or running the route. They need a model built to run without their daily presence.
What a Franchise Actually Is, and Why There Are Thousands to Choose From
A franchise, in Matt’s definition, is an authorization to carry out specific commercial activities under a brand’s system and support structure. Brand recognition matters less than most people assume. What matters more is the team behind the system and how well it has been proven. There are roughly 4,300 franchise brands operating today across about 80 different industries, and Matt evaluates candidates against roughly 30 different ownership criteria to narrow that field down to the two, three, or four opportunities that actually fit.
Not every brand survives. Matt pointed out that from 2000 to 2009, roughly 900 new brands entered franchising for the first time, and most of them do not exist anymore. They never made it to a second or third franchise owner. That history is exactly why understanding the full franchise buying process matters before signing anything, and why validation with existing owners carries so much weight in the sections below.
Passive and Semi-Absentee Ownership: How Physicians Actually Run a Franchise
David Mandell raised the obvious concern directly: physicians have very limited time. If a doctor wants to invest capital and interest without personally running a business, how does that work? Matt’s answer is that a franchise still needs someone to drive the train. There is no free lunch. But that driver does not have to be the physician. Matt has placed franchises for busy professionals who never intended to work in the business day to day, including a case in New Jersey where a 52-year-old sibling took on the operating role for his physician brother.
Some franchise systems will not even open a location until a managing operator is identified and in place. That structure gives a physician a way to participate in franchise ownership through a defined path to franchise ownership without stepping away from their practice, whether the operator is a hired manager, a spouse, or an adult child looking for a better opportunity than the one they currently have.
Tax and Wealth Planning Considerations for Physician Franchise Owners
David, speaking from his own background structuring entities and retirement plans for physicians, asked whether the franchise playbook typically covers tax and legal structure, or whether that is left to the owner’s existing advisors. Matt was direct about it: the franchisor generally will not have the resources to advise every individual on their specific tax situation. That work still belongs to the physician’s own financial and legal team.
That said, some franchise models are structured in ways that create real tax benefits. Matt described a franchisee with four locations, two near the Canadian border and two in Florida, whose taxes in the first three and a half years of operation, through property-related deductions tied to the business model, essentially wiped away the profit he had made. Matt’s advice for physicians evaluating what it actually costs to buy a franchise is to loop in their accountant and financial advisor before signing, not after, since decisions about LLC versus corporation, or S-corp versus C-corp, are easier to get right on the front end.
“We all live finite lives. Physicians certainly understand that. Do you want to invest the first three to seven years of any business making expensive, untimely mistakes you can’t predict? Or would you rather spend a franchise fee and literally buy down that learning curve significantly? That’s what franchising does.”
Matt Stevens, Wealth Planning for the Modern Physician podcastHow to Vet a Franchise Before You Invest: The FDD and Item 20
Every franchisor is required to provide a Franchise Disclosure Document, or FDD, containing 23 standardized items. Matt pointed straight to Item 20, which shows the three-year history of the franchisee base, including how many owners succeeded and how many shut down. He tells every candidate the same thing: take notes, do not turn assumptions into conclusions, ask questions, and go from there.
Beyond the document itself, Matt has candidates speak directly with current and former franchisees, in group settings, on recorded calls, or one on one. After several of those conversations, a buyer can honestly ask whether they are willing, ready, and able to replicate what the top producers in that system are doing. He also flagged that franchisors cannot compel any franchisee to talk, so it is worth seeking out owners at the specific stage you are curious about. Someone who has passed the 18 to 20 month mark is usually on their way to success; if it is not working by then, it usually is not going to. Reading through how to evaluate a franchise opportunity in more depth is a useful next step before those conversations.
Red Flags and Success Factors Physicians Should Watch For
Royalty structure is one of the clearest signals of alignment. Franchisors typically earn a percentage of a franchisee’s top-line revenue, charged weekly or monthly, while the one-time franchise fee rarely even covers the franchisor’s cost of onboarding a new owner. A system built to profit primarily on royalties needs its franchisees to succeed, which is a very different incentive than one built to profit on the fee itself.
On the owner’s side, Matt’s word for what separates success from failure is engagement. Franchisees who engage with successful peers, attend regional meetings, participate in Q&A sessions, and use the franchisor’s flight groups or online forums tend to do well. As Matt put it, if you want to go out and be on your own island, you can do that, but you are missing out on the learning curve buy-down you already paid for.
Planning Your Exit From Day One
Exit planning came up as a theme physicians should take seriously before they ever sign. Matt uses 18 months as a rough marker for owners who simply are not going to stick with something that is not working out. On the other end, he described Lawn Doctor, a 50 to 60 year old legacy brand where the oldest franchisees are now on their fifth franchise agreement, having handed the business down through their own families over decades.
For a resale example, Matt described a business in Portland, Maine that a fellow consultant placed. The original owner built it for 14 years, hired and trained staff to run it, and sold for a high six-figure price after investing under 200,000 dollars to get in. The new buyer has since tripled the business’s revenue within five or six years. Matt offers every candidate, whether he placed them or not, a free 30-minute call to walk through what a resale actually looks like and how a franchisor can help market the sale when the time comes.
Working With a Franchise Consultant at No Cost to You
Matt has placed more than 900 people into franchise ownership across 42 states. His process starts with a fact-finding conversation, measuring a candidate against dozens of ownership criteria, from the most important down to the least. Once that picture is clear, he makes the physician the center point of the search and reverse-engineers the process around them, rather than starting from a list of available brands. Learning more about what a franchise consultant actually does makes it clear why this approach matters for a buyer with limited time to research thousands of brands alone.
The financial arrangement is straightforward. If a candidate becomes a franchise owner, the franchisor pays Matt out of the published, public franchise fee the buyer was always going to pay. The fee does not change based on whether a consultant is involved. Matt’s franchise consulting services are free and without obligation, which is why he tells every client the same thing: he wants them happy enough with the outcome to recommend him to everyone they know. Reach out to start the conversation and find out whether a franchise fits your goals, your schedule, and your practice.
Matt Stevens — The Franchise Guy
Independent Franchise Consultant · 30+ Years Industry Experience · 4 Businesses Owned · 500+ Franchisees Placed Nationally
Matt Stevens is one of the most experienced independent franchise consultants in the United States, based in Dublin, Ohio. Since the mid-1990s he has guided hundreds of buyers into franchise ownership across nearly all 50 states — at no cost to the buyer. Learn more about Matt →
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Frequently Asked Questions
A franchise is an authorization to carry out specific commercial activities under a brand’s proven system, training, and support structure, in exchange for a franchise fee and ongoing royalties. For physicians, the appeal is not the brand name. It is the ability to buy down years of trial-and-error learning that a new business normally requires, while gaining access to a network of other owners in their own protected territories who are not competing against them and are often willing to share what worked and what did not.
There are roughly 4,300 franchise brands operating today, spread across about 80 different industries, from food and fitness to home services, senior care, and business coaching. Franchise consultants typically evaluate candidates against around 30 different ownership criteria to narrow that full field down to the handful of systems that actually fit a buyer’s schedule, budget, and interests, rather than starting from brand recognition alone.
Physicians and other busy professionals typically cannot afford to have their focus disrupted by a demanding new business. Franchising can offer a defined ownership role, limited time involvement, and a system that does not create urgency competing with an existing medical practice. It also gives physicians access to other owners and, in some cases, other medical professionals inside the same franchise system who understand their situation and can speak their language.
That is the central premise of franchising, according to Matt Stevens. Starting a business independently often means spending three to seven years making expensive, unpredictable mistakes. A franchise fee buys access to a playbook that has already been tested, along with training designed to catch most of those mistakes before they happen. The goal is to put an owner in year one, two, or three of a business where they would otherwise have landed in year five, seven, or nine on their own.
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