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The Economics of The Joint Chiropractic

Drs. Jeff Langmaid and Jason Deitch

Founder DCs, The Smart Chiropractor

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.

Did You Know…

On average, a new Joint opens every 48 hours.

Collectively, chiropractic is a $16 billion industry in the US.

Yet, it’s fragmented.

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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.

How does The Joint Chiropractic Make Money?

The margins at The Joint are famously good.

Profit Margin

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?

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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.

Startup Costs

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.

Stock Market Snapshot of The Joint Chiropractic Stock Value and Performance
The Economics of The Joint Chiropractic: Stock Symbol JYNT

What is The Joint Chiropractic?

The Joint is a franchise of chiropractic clinics focused on a retail approach to bring convenient and affordable chiropractic care.

Franchise Framework

All franchises feature a membership-driven model that is walk-in and cash pay-based.

So what’s the big deal about a membership model?

Well, it’s estimated that over 85% of the revenue generated at a Joint Chiropractic franchise location is based on memberships.

And they’re making a lot of money.

The Joint also takes a unique approach to its marketing.

Focusing less on “medicine” and more on “lifestyle”, they are positioned on the continuum of wellness rather than medical management.

Aspirational messaging and candid photos and stories are typically used to showcase the positive lifestyle benefits of their care.

The Joint Chiropractic: By the Numbers:

Infographic Showing The Joint Chiropractic Patient Service Breakdown for 2020
The Economics of The Joint Chiropractic: The 2020 Numbers

With chiropractic positioned as a $16B market, The Joint is counting on taking advantage of the statistics, which show 50% of Americans don’t know what the word “chiropractic” means, and 30% are scared to see a chiropractor.

Right now, chiropractic chains make up only 3% of the total spending on chiropractic.

However, chains make up approximately 12% of the market in the dental world, so it’s clear that The Joint feels like they have a significant opportunity to grow and potentially 4X over the next few years.

How Many Clinics Does The Joint Chiropractic Have?

Chart Displaying the Number of The Joint Chiropractic Clinics Opened Each Year
The Economics of The Joint Chiropractic: Clinics Opened Each Year

2021: 600

2023: 1,000 (goal)

2025 and beyond: 1,800+

Clinic Count

Currently, The Joint has over 250 clinics in active development.

And with their recent influx of capital and profitability, it’s unlikely their growth will be slowing down anytime soon.

Roughly 10% of their clinic portfolio is corporate-owned and managed, with the remaining 90% structured as franchises.

How Much Does it Cost to start a The Joint Chiropractic Franchise?

Initial Investment

The initial investment to start a franchise of The Joint is approximately $275k.

It’s estimated that the initial build-out cost is $180k, and the franchisee pays a license of $40k, which transitions to a 7% royalty (plus an additional 2% for a marketing fund).

The estimated breakeven is at $25k of monthly gross sales and is expected to take 3.5 years to have a cash-on-cash return.

You’ll also need to have $100k liquid and a total net worth of at least $250k to qualify for franchise ownership.

While these financial requirements aren’t extreme, it’s not uncommon for the franchise owners to be business people and investors as opposed to practicing chiropractors (where legal).

What’s the Difference Between The Joint and Other Chiropractic Clinics?

The Joint is different from many other chiropractic practices in a few distinct ways.

First, The Joint has an average collection of $29 per visit, which is about half the industry standard.

Second, the Joint can save a tremendous amount of money on overhead by being cash or private pay and not accepting insurance.

Having a cash-based business model, The Joint also never has to wait on accounts receivable, insurance denials, or billers.

This could account for at least a 25-40% premium on the cash they collect.

And it is saving them the time and hassles of insurance, giving them a strategic advantage to charge less.

Additionally, they choose retail-based locations instead of medically-based to drive more foot traffic and name recognition.

Did You Know…

It’s not uncommon to find Joint chiropractic in a strip mall next to a grocery store in the suburbs or high-density locations in a city.

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 Chiropractic Salary: It’s Good to be Green

Average Starting Salary

The Joint boasts a starting chiropractic salary of at least $65k plus additional performance-based bonuses.

The other benefits of ongoing training and support and corporate oversight can make it attractive to chiropractors who may not want to deal with the “business of chiropractic”.

For this reason, The Joint tends to attract newer chiropractors who are looking for stable jobs.

This type of chiropractor, a caregiver, usually isn’t focused on building their own franchise but rather by providing care each day to the patients who come in to see them.

While many chiropractors who seek stability may still dream of practicing in a hospital-based or multidisciplinary clinic, those positions remain few and far between.

With the historic growth, and future projections, of The Joint it appears as though far more of their positions will be available for the foreseeable future.

If you’re looking for a stable job in a company with strong financials, it’s hard to not consider The Joint Chiropractic as one of the better options.

Is The Joint Good for Chiropractic?

The Joint has its fair share of haters, as well as those who praise their unique business model and ability to scale.

So, the question remains…

Is The Joint good for chiropractic?

In our opinion, it’s too early to tell whether The Joint will have a significant impact on the chiropractic profession.

However, we should know more within the next 3-5 years with their growing market share.

For now, The Joint Chiropractic is uniquely positioned as a low-cost, readily available, membership-based chiropractic chain that provides adjustments to those who need a quick crunch.

Most chiropractors, especially those with specific niches, shouldn’t be concerned about “competition” from The Joint.

Most chiropractors, their business model, ideal client, and operations are so wildly varied that worrying about The Joint would be like Nobu being concerned about a P.F. Changs.

If you’re an investor, is The Joint a good franchise?

This isn’t investment advice, but it looks as though The Joint has grown and will continue to grow for the foreseeable future.

Their marketing, target market, operations playbook, and franchise model appear to be performing very well.

So, we guess, as they say, roll ’em if you’ve got ’em.

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