Inside Franchise Business


In­vest in a health-fo­cused fran­chise and you’ll be buy­ing into tech­ni­cal and busi­ness ex­per­tise. Here, two fran­chised firms re­veal what the fu­ture holds.


In­vest in a health-fo­cused fran­chise and get tech­ni­cal and busi­ness ex­per­tise.

Let’s start with the Aus­tralian land­scape, in health terms. We’re an age­ing population and al­lied health (the dis­ci­plines that com­ple­ment gen­eral prac­tice such as phys­io­ther­apy, chi­ro­prac­tic and os­teopa­thy) is in­creas­ingly im­por­tant both as a treat­ment and as pre­ven­tive ac­tion.


Ac­cord­ing to IBISWorld, which pro­duces in­dus­try-spe­cific re­ports, there are some key ob­ser­va­tions of the phys­io­ther­apy sec­tor which is out­per­form­ing the econ­omy, no­tably the spe­cial­i­sa­tion of cus­tomer seg­ments in a com­pet­i­tive mar­ket.

IBISWorld has pin­pointed age­ing, women, sport, orthopaedi­c and pae­di­atric treat­ments as strong ar­eas for spe­cialised prac­tice.

Al­lied ser­vices help boost al­ready good profit mar­gins, the lat­est re­port Phys­io­ther­apy Ser­vices in Aus­tralia, July 2018, sug­gests.

The na­ture of the ser­vice-fo­cused busi­ness means economies of scale are ir­rel­e­vant to phys­io­ther­apy firms, the re­port con­cludes.

What is rel­e­vant is greater work flex­i­bil­ity and the cost de­ter­rent – there’s cur­rently no Medi­care re­bate avail­able. And while the sec­tor is com­pet­i­tive, there’s been lit­tle prac­tice con­sol­i­da­tion.

Four ma­jor play­ers in this sec­tor each have just 1–2 per cent each of the mar­ket share – one of these busi­nesses in Back In Mo­tion.

Founder and direc­tor Ja­son Smith sug­gests that the IBIS World re­port doesn’t pick up the pulse of the in­dus­try. There’s no doubt that age­ing is the land­scape of al­lied health but in re­al­ity the biggest driver is tech­nol­ogy, he says.

“Tech­nol­ogy is one of the big driv­ers in the next five to 10 years. We are putting a dis­pro­por­tion­ate in­vest­ment into tech­nol­ogy; tech is the dry creek bed soak­ing up ev­ery cent, find­ing new and bet­ter ways to de­liver ser­vices with agility.”

Smith is so com­mit­ted to tech in­vest­ment that the busi­ness ac­quired a small IT com­pany along with a staff of five full time coders.

“This al­lows us to build the pro­grams we need and get big data to bet­ter in­form clin­i­cal ser­vices. These are the chang­ing con­tours of our busi­ness.”

Smith has de­lib­er­ated on how best the busi­ness can shape it­self to the fu­ture, and found the so­lu­tion in a hub and spoke model that al­lows for flag­ship stores and ver­sa­tile de­liv­ery of ser­vices.

An­other is a shift or trend to pa­tient-cen­tred care. Not yet im­ple­mented but com­ing fast is home care – a clearly dis­rup­tive model be­cause it will

dis­place some of the heavy fixed costs of run­ning lo­ca­tions.

But phys­io­ther­apy is heav­ily de­pen­dent on health funds for pay­ment of client treat­ments and they are yet to adapt to the chang­ing mar­ket; like­wise, in­sur­ers and gov­ern­ment pay­ers have not cre­ated the pol­icy to deal with this, he adds.

At-home care may be the fu­ture but it’s a costly process right now, says Smith.

“It’s very hard to get the price point right. It’s much more ex­pen­sive to de­liver at home than in a prac­tice, you lose ef­fi­ciency. Who­ever re­ally in­no­vates home care will have to have big wal­lets. The price point is tough. Un­less a third party pays the pre­mium, we’re go­ing to be stuck for a while.”

Smith is san­guine about how the Back In Mo­tion busi­ness will ex­pand. He is con­sid­er­ing a di­ver­si­fi­ca­tion into al­lied health to pro­vide a more holis­tic of­fer­ing for clients, in­clud­ing po­di­a­try, os­teopa­thy and chi­ro­prac­tic ser­vices. Right now he sees the brand as a leader in the phys­io­ther­apy mar­ket.

“We are big­ger in terms of rev­enue and foot­print than the other three com­bined,” he says.

For the fi­nan­cial year 2018 Back In Mo­tion recorded 12 per cent or­ganic growth and a com­pa­ra­ble rise is pre­dicted for this year’s re­sults. Smith ex­pects to see a fur­ther eight prac­tices op­er­at­ing in Aus­tralia and four more in New Zealand within the next 12 months.

Ac­com­pa­ny­ing mar­ket lead­er­ship is in­ter­est from in­vestors, who see po­ten­tial for ag­gre­gat­ing some of the prac­tices.

But Smith is wary of cor­po­rati­sa­tion.

Fran­chis­ing works as a way to at­tract more cap­i­tal to scale and have liq­uid­ity and exit op­tions, he says. “We are rais­ing cap­i­tal and build­ing scale through the group,” he says.

There are nearly 50 prac­tices in the net­work, who ben­e­fit from the back-end sys­tems avail­able in a full-ser­vice fran­chise, in­clud­ing an in-house ac­count­ing team that man­ages in­voices, bills and pay­roll; mar­ket­ing cam­paigns; HR sup­port; busi­ness coach­ing; and ac­cess to net­work­ing and pro­fes­sional de­vel­op­ment events.

It’s a busi­ness that grew from the ground up, founded by Ja­son and Paulina Smith in a small home-based prac­tice in 1999 and grow­ing sig­nif­i­cantly from 2006 when it had just seven out­lets. Back In Mo­tion has a fo­cus on holis­tic so­lu­tions and af­ter-care and it’s a pre­req­ui­site that any physio in the busi­ness is a mem­ber of the Aus­tralian Phys­io­ther­apy As­so­ci­a­tion.

Typ­i­cally a physio busi­ness is all about the treat­ment, and Smith says the clin­i­cal as­pect has al­ways been well de­liv­ered by the part­ners. How­ever, there is an area of health he be­lieves is be­ing han­dled badly: cus­tomer ex­pe­ri­ence. And so he is fo­cused on a part­ner mind­shift to client cen­tred­ness – up­skilling on how to com­mu­ni­cate with clients, to show em­pa­thy, and to de­liver on cus­tomer ex­pe­ri­ence.


To­day we have a greater risk of dy­ing from chronic con­di­tions such as type 2 di­a­betes, os­teo­poro­sis, obe­sity and back pain than heart dis­ease, cigarettes or cancer.

In fact 42 per cent of women and 27 per cent of men over 50 years old will suf­fer an os­teo­porotic frac­ture. The brit­tle bones of Aus­tralians over 50 cost $3.1 bil­lion in 2017 and the to­tal cost over 10 years will climb to nearly $34 bil­lion by 2022.

Mus­cu­loskele­tal con­di­tion­ing can pro­vide so­lu­tions, says Perry Eck­ert, man­ag­ing direc­tor, OsteoStron­g Aus­tralia and New Zealand.

“At OsteoStron­g we also work in co­op­er­a­tion with med­i­cal pro­fes­sion­als. We fill in the blanks re­lat­ing to ex­er­cise dosage for peo­ple with low bone den­sity, poor bal­ance and mus­cle tone, which we know in­di­cates a high fall and frac­ture risk.”

Eck­ert says OsteoStron­g can de­liver re­sults across a broad de­mo­graphic, even

We are putting a dis­pro­por­tion­ate in­vest­ment into tech­nol­ogy; tech is the dry creek bed soak­ing up ev­ery cent, find­ing new and bet­ter ways to de­liver ser­vices with agility.

for chil­dren, who up to age 20 are still build­ing bone den­sity.

“For se­ri­ous ath­letes, OsteoStron­g helps strengthen ten­dons, lig­a­ments, joints and bones so they can re­cruit more mus­cles safely. They can build a stronger foun­da­tion based on su­per bone den­sity for high per­for­mance ex­plo­sive ac­tion, fu­elling their per­for­mance on the track or field and help­ing to make them frac­ture­and in­jury-proof,” says Eck­ert.

OsteoStron­g is a US busi­ness that started a decade ago. Re­cently the equip­ment and mar­ket­ing has been up­dated with the in­volve­ment of celebrity fig­ure Tony Rob­bins. He bought into the busi­ness af­ter his wife ex­pe­ri­enced the ser­vices to im­prove a back com­plaint and his pub­lic back­ing of the brand has had a sig­nif­i­cant im­pact on its growth.

There are about 60 OsteoStron­g cen­tres open in the US with more than 100 ad­di­tional busi­nesses to be open­ing soon.

The first in­ter­na­tional in­de­pen­dent cen­tre opened in Swe­den ear­lier this year and al­ready has nearly 400 mem­bers. The plan is to open a sec­ond out­let in a few

We fill in the blanks re­lat­ing to ex­er­cise dosage for peo­ple with low bone den­sity, poor bal­ance and mus­cle tone, which we know in­di­cates a high fall and frac­ture risk.

months with the goal of hav­ing a to­tal of 1000 mem­bers by Christ­mas.

Mem­ber­ship num­bers are grow­ing rapidly in Spain, and cen­tres are soon due to open in Den­mark, UK, Nor­way, Ice­land, Greece and Malta, and Ja­pan, with a num­ber of other coun­tries in the ne­go­ti­a­tion stages.

In Aus­tralia the re­sponse has been very pos­i­tive, says Eck­ert.

“Peo­ple get the con­cept very quickly and can see the busi­ness po­ten­tial and un­der­stand that this is an op­por­tu­nity to help thou­sands of peo­ple. OsteoStron­g is a blue ocean busi­ness with no known com­peti­tors and patent-pro­tected robotic os­teogenic load­ing equip­ment.

“No other busi­ness in Aus­tralia is of­fer­ing mus­cu­loskele­tal strength con­di­tion­ing, which can ab­so­lutely change peo­ple’s lives in such a time ef­fi­cient man­ner.”

Hawthorn in Mel­bourne will be the site of the first cen­tre and the growth plan is fo­cused on 30 fran­chises in the next 12 months to en­sure that the train­ing and op­er­a­tion of each cen­tre is world class and con­sis­tent with the OsteoStron­g brand and cul­ture.

OsteoStron­g cen­tres will have a strong com­mu­nity iden­tity and be­come ed­u­ca­tion and learn­ing hubs in co­op­er­a­tion with health and well­be­ing pro­fes­sion­als and al­lied ser­vice providers. Fran­chisees will be re­quired to adopt this car­ing cul­ture in all ar­eas of the busi­ness op­er­a­tion in­clud­ing staff, as­so­ci­ates, com­mu­nity and cus­tomers.

An ideal fran­chisee will have an affin­ity with health and well­be­ing, be hard-work­ing and en­tre­pre­neur­ial. They will need good net­work and com­mu­ni­ca­tion skills and have some ex­pe­ri­ence in sales and mar­ket­ing.

In re­turn fran­chisees re­ceive a full turn-key ser­vice from site se­lec­tion, finance, in­sur­ance, de­sign, fitout, train­ing, equip­ment pack­age, open­ing, ac­count­ing, op­er­a­tional and mar­ket­ing sup­port as well as on­go­ing sup­port and ser­vice .

“We are plan­ning to open in all cap­i­tal cities in 2019–20 in­clud­ing New Zealand. In ad­di­tion to fixed cen­tres we are also look­ing for op­er­a­tors of mo­bile cen­tres, which will op­er­ate from mod­i­fied Jayco RV vans. These mo­bile fa­cil­i­ties will ser­vice re­tire­ment vil­lages and com­mu­ni­ties, cor­po­rate busi­ness cen­tres and in­ac­ces­si­ble coun­try ar­eas where fixed cen­tres may not be fea­si­ble.”

The part­ner­ship with Tony Rob­bins has ex­posed Os­teo Strong to more than 20,000 mo­ti­vated peo­ple an­nu­ally through his three events in Aus­tralia.

“Tony also brings a huge amount of cred­i­bil­ity to the brand, be­cause he only part­ners with busi­nesses that have clear demon­stra­ble ben­e­fits for a max­i­mum num­ber of peo­ple,” says Eck­ert.

“Part­ner­ing with Tony Rob­bins in early 2017 changed the busi­ness strat­egy and fo­cus en­tirely. Prior to his in­volve­ment the busi­ness was pri­mar­ily ca­ter­ing for the needs-based mar­ket, com­pris­ing post-menopause women with low bone den­sity. With Tony’s busi­ness strat­egy the Os­teo Strong mar­ket has now ex­panded to elite ath­letes and bio­hack­ers and the ev­ery­day 30-plus time-poor con­ve­nience mar­ket who are highly health and well­ness mo­ti­vated.”

 ??  ?? Ja­son T Smith
Ja­son T Smith
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Back in Mo­tion
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