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Franchise Costs: Detailed Estimates of HealthSource Chiropractic Franchise Costs (2016 FDD)

by Franchise Chatter on November 26, 2016

in Franchise Costs, Physical Therapy Franchise



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Detailed Estimates of HealthSource Chiropractic Franchise Costs Based on Item 7 (Estimated Initial Investment) of HealthSource Chiropractic’s 2016 Franchise Disclosure Document

For a Start-Up Clinic (First Clinic)

1.  Initial Franchise Fee:  $39,000

  • In certain cases, HealthSource may permit you to make alternate arrangements for the payment of the Initial Franchise Fee, either (i) in installments over time paid to HealthSource either directly or through a third party payment facilitator, or (ii) by paying HealthSource a nonrefundable deposit to reserve your Protected Territory for a stated period of time.
  • If you are approved to make installment payments through a third party facilitator, you may pay the Initial Franchise Fee in installments up to 75% of the Initial Franchisee Fee and HealthSource will not charge you any interest fees but the third party facilitator will.
  • If you are approved to make installment payments directly to HealthSource, you may pay the Initial Franchise Fee in installments up to 75% of the Initial Franchisee Fee (HealthSource requires you to pay 25% of the Initial Franchise Fee upon signing of the installment payment amendment) and HealthSource will not charge you interest unless you are in default, at which time it will charge you interest on any unpaid portion of the Initial Franchise Fee at the rate of 15% per annum, or, if less, the highest commercial contract interest rate permitted by law.

2.  Security Deposits:  $2,500 to $5,500

  • This estimate includes security deposits required by the landlord and utility companies, but not your telecommunications service.

3.  3 Months’ Lease Rent:  $2,700 to $9,000

  • This estimate includes 3 months’ rent at a rate of approximately $0.75 per square foot to $1.25 per square foot per month. Your actual rent payments may vary, depending upon your location and your market’s retail lease rates.
  • HealthSource estimates, but does not require, that Clinics will be 1,200 to 2,400 square feet in size. It anticipates that HealthSource Chiropractic Clinics typically will be located in high-traffic strip malls.
  • If you purchase instead of lease the premises for your Clinic, then the purchase price, down payment, interest rates, and other financing terms will determine the amount of your monthly mortgage payments.

4.  Leasehold Improvements/Decorating Costs:  $40,000 to $60,000

  • This estimate does not include any construction allowances that may be offered by your landlord. Building and construction costs will vary depending upon the condition of the premises for the Clinic, the size of the premises, and local construction cost.

5.  Signage:  $500 to $4,000

  • These estimates assume you purchase your signage. The type and size of the signage you actually install will be based upon the zoning and property use requirements and restrictions. There could be an occasion where signage is not permitted because of zoning or use restrictions.

6.  Physical Therapy Equipment:  $0 to $6,000

  • This estimate includes your purchase of various bands, tubes, free weights, and balls.

7.  Chiropractic Equipment:  $3,600 to $5,000

  • This estimate is for chiropractic tables and equipment.

8.  Diagnostic Equipment:  $25,000 to $30,000

  • This estimate is for an X-ray machine for diagnostic purposes, and assumes you purchase a new machine. You may purchase or lease a new or used device.

9.  Miscellaneous Supplies and Equipment:  $4,000 to $12,400

  • This includes various exercise straps, pads, paper products, file folders, and miscellaneous supplies.

10.  Furnishings:  $2,500 to $7,000

  • This estimate includes workstations and chairs, shelving, and other retail items.

11.  Computer, Supplies, and Installation:  $500 to $2,000

  • This estimate includes the cost of obtaining HealthSource’s required computer and billing system.

12.  3 Months’ Billing Software Lease:  $1,794 to $2,500

  • This estimate includes 3 months’ lease and maintenance fees for HealthSource’s required computer and billing system.
  • The low estimate is based on the usual monthly fee charged by Phunkey, Inc. in the amount of $598 per month. The higher estimate is based on whether you decide to use optional products or services from Phunkey, Inc.
  • These amounts include up to 5 seats and is subject to the number of claims processed and other services provided by Phunkey.
  • This estimate does not include fees HealthSource will charge you if your franchise is not “live” on the software system within two months post training. If you are not “live” on the software system within two months of training, a $500 per month fee will be assessed. After month six, the fee will increase to $1,000 per month starting month seven.

13.  Business Licenses and Permits:  $100 to $500

14.  Professional Fees (including project management):  $250 to $5,000

15.  Initial Inventory:  $500 to $1,000

  • This estimate includes supplements, pillows, supports, and braces.

16.  Insurance:  $1,000 to $3,700

  • You must obtain and maintain, at your own expense, the insurance coverage that HealthSource periodically requires (including, but not limited to, comprehensive commercial general liability and motor vehicle insurance, worker’s compensation and employer’s liability insurance, professional liability (malpractice) insurance, and any other insurance required by applicable law, rule, regulation, ordinance, or licensing requirement), and satisfy other insurance-related obligations.

17.  Initial Training Expenses:  $1,000 to $4,000

  • This estimate includes the travel and living expenses, including airfare, that you will incur when you and your employees attend the initial training program for Clinics. It does not include any wages or salary for you or your employees during this training.

18.  Telecommunications Services:  $200 to $2,500

  • This estimate includes the security deposits and service fees for your telecommunications system, and telephone directory advertising fees.

19.  60-Day Marketing Plan:  $5,000

20.  Additional Funds – 3 Months:  $15,000 to $45,000

  • This estimate includes your initial start-up expenses (other than the items identified separately in the table) during the Clinic’s first 3 months of operation. These expenses include payroll costs during the Clinic’s operation, but not any draw or salary for you.

21.  Total Estimated Initial Investment:  $145,144 to $249,100




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