As orthodontists search for the right business model to practice in, Mark Stasi, DDS, has found the success and autonomy he wants as a franchise owner.
By Alison Werner | Photography by Doug Gritzmacher
Private practices and DSOs/OSOs are often the focus of any practice model discussion. But what about the franchise model? As orthodontists, new and established, look to get started or transition, this model offers a pathway to ownership that includes both support and autonomy and the opportunity to build equity.
In 2004, Mark Stasi, DDS, sought a new challenge. After 18 years of building a thriving boutique practice in Colorado, the business model was no longer fulfilling. He wanted to treat more patients each day and reduce the time spent on the tasks of running a small business.
“Honestly, treating 25 to 30 patients a day wasn’t what I wanted. I felt like I could help 75 to 85 patients a day,” says Stasi. “The other aspect of it was practice had become so complicated with so many irons in the fire. I was looking for a way to simplify my business model, or practice model, so I could focus more on orthodontics and less on marketing, HR, and CFO duties.”
Stasi opted to join a Comfort Dental franchise, owned by three other orthodontists.
Franchise vs DSO
Established in 1981 by Rick Kushner, DDS, who still serves as president, CEO, and CFO, Comfort Dental has franchises in 10 states, with over 180 locations. The majority of Comfort Dental’s franchises are focused on general dentistry, with several oral surgeon and orthodontic groups. Each franchise is owned by the doctor(s). That doctor holds the equity in the franchise they own. There is no private equity or venture capital money.
In contrast, a DSO (or dental support organization) is typically owned and controlled by private equity investors, not the doctors. Once an orthodontist sells their practice to a DSO, they stay on as an “employee”—typically a 1099 or W-2 employee—focusing on clinical care. The DSO typically owns the practice’s assets, holds any leases on the property, and employs all the non-clinical staff.
While there are different types, a DSO is a business management company with which practice owners contract. In return, the DSO provides support services to the practices within its umbrella, such as administrative, marketing, and operational assistance—ie, non-clinical related tasks.
In Stasi’s case, he bought into an existing Comfort Dental group practice with three doctors who had three offices. Stasi and his partners later opened two more offices and brought in another partner.
As Stasi puts it, the franchise model allows him and other franchisees to have more autonomy and control, and operate within a known brand framework, while maintaining ownership of the practice.
Franchise model pros and cons
That established brand is a key benefit of the franchise practice model in Stasi’s opinion. “We operate under a recognized brand name, which can attract customers and provide a sense of credibility. As a specialist, this brand recognition allows me to treat many more [patients] than I might be able to treat if I were in a different practice setting.”
On the flip side, being a part of a franchise means you are dependent on that franchise brand—ie, your practice is depending on the overall reputation and success of the brand. Stasi’s experience with the brand has been nothing but positive precisely because his fellow doctors and franchisees have an equity stake in the success of the brand through their ownership. “This has proven to be a great thing for me,” he says. “We own these businesses, and because we own them, we care.”
Other pros of the franchise model, in Stasi’s opinion, include training and support, including assistance with marketing, operations, and management; standardized processes, systems, and protocols which can streamline operations and ensure consistency across locations; collective buying power of the franchise network, resulting in cost savings on supplies, equipment, and other resources; and a degree of risk mitigation compared to starting a business from scratch—as Stasi puts it, “We operate in a proven business model.”
In addition, Comfort Dental provides a built-in and consistent referral stream with its general dental franchises. “We’re all a team,” says Stasi. “We all support each other. I send them patients and they send me patients. I don’t have to go out and spend an inordinate amount of time building relationships with doctors with whom I don’t have a link.”
Another benefit that Stasi is quick to add is the expertise of Kushner and his “Lean and Mean” practice management system. Stasi knew Kushner for several years before joining Comfort Dental, and as he explains it, “The system, if followed correctly, allows us to have practices that treat many patients that many other [orthodontists] can’t afford to treat. It also allows us to earn a superior income.”
No business model is without its minuses or cons. There is an initial financial investment. This includes the franchise fee which gives the franchisee the right to use the franchisor’s name and receive support. Other costs can include rent or lease for a building, outfitting the building, equipment and inventory purchases, and staffing. In addition, franchisees pay ongoing royalties and fees to the franchisor. This can be a percentage of gross income and is usually paid to maintain use of the franchisor’s name. Those royalties must be paid even if you haven’t earned any income.
For Stasi, these are the costs of doing business. He has found financial success within this model and royalties and other fees are mitigated, he says, when weighed with the benefits of the practice model.
It’s also important to note that while practice marketing is handled on a corporate level, all franchisees contribute to a marketing fund. All those funds do go directly to marketing as Comfort Dental does not have a salaried marketing position. As Stasi puts it, this pooled marketing fund allows the franchisees to reach “many more prospective patients.” In addition, franchisees have the flexibility to implement local marketing initiatives tailored to their specific market and customer base.
As for staffing, it is as much of a challenge in the franchise model as it is in a privately owned practice. According to Stasi, franchisees do not receive direct support from Comfort Dental for their HR. “This is our burden to carry,” he says. “As franchisees, we are responsible for hiring and managing staff.” Comfort Dental, however, does offer guidance on hiring best practices, training programs for new staff, and access to recruitment resources.
A benefit of those staff training programs and systems is that franchisees can turn to other franchises when faced with staffing shortages. For example, when one or two staff members call out sick, Stasi can call other offices within the Comfort Dental network to see if their staff can help him out. This even extends to doctors. “If something happened to me, I know any one of our doctors would step in and help,” says Stasi.
Going solo
Stasi, who attended the University of Iowa for dental school and completed his residency at St Louis University under Lysle Johnston, DDS, MS, opened his first solo private practice from scratch in Colorado in 1986 and grew it into a $1 million+ practice before selling it to buy into the Comfort Dental franchise. Now, entering his fourth decade in the industry, or to use a sports metaphor, the fourth quarter, Stasi was looking for a new challenge, when many orthodontists are formulating their exit plan.
After 18 years with the group franchise, Stasi opted to separate from the group. He took his equity from the other offices with him. He then turned the Littleton, Colo, location that he had been practicing in into a sole owner practice, retaining his staff (which today includes three in the front and five in the back) and remaining within the Comfort Dental franchise.
“I’m very active and healthy and I love what I do—pure and simple. I think I’m pretty good at it as well. I wanted more autonomy. I’ve been doing this a long time, and I wanted to put more of my personality on the practice. It’s like: This is my house and I’m going to decorate it my way,” says Stasi, when asked why he made the decision to go solo at this point in the game.
Stasi still reaps the benefits of the franchise as a solo practitioner. He still operates under an established brand name, which can help attract customers and build credibility, and he benefits from the support and resources provided by Comfort Dental. It offers the balance of independence and support he wants, and allows him to focus on providing quality care while leveraging the benefits of being part of a larger network.
The transition to a solo practice has been invigorating for Stasi, who is in the process of completing an office remodel, which includes two consult rooms and six chairs. “I’m much more engaged and I’m having much more fun. You can get to a point where you’re on autopilot and you’re not being creative. I feel much more creative and free to experiment,” he says.
Patient experience
Among Comfort Dental’s core values, according to Stasi, are convenience, affordability, and quality. What that means is Comfort Dental offices work hours other doctors don’t. Stasi works early morning and evening hours, and works one Saturday a month. In addition, the franchise is known for its lower fees and for taking all insurance.
“We’re there for the working man—the guy who gets off at 5 o’clock,” says Stasi.
Even with these schedule demands, Stasi has the work-life balance he craves, with the focus on life, working about 20 hours a week.
The practice does offer aligners, but the majority of patients are interested in braces. And while Stasi’s office has skewed 65% adolescents vs 35% adults, he has noticed a shift, as adults are increasingly coming to his practice interested in taking care of themselves.
Who is this model right for?
Each orthodontist will find the business model that works for them. Stasi explains that the franchise model is a good fit for doctors who value the support, resources, and established brand recognition provided by the franchisor, but who also want to maintain a level of independence and autonomy in running their own business.
For new orthodontists burdened with student loan debt, the model offers training, operational support, and mentorship that will give them a “sure path to success if they work hard,” according to Stasi, who was himself mentored by Ronald H. Roth, DDS, MS, father of the Roth prescription. There are two entry points into the franchise model if a doctor is not ready to buy their own franchise: buy-in as a partner or come in as an associate. Associates can buy in later on.
Stasi is very positive on the model—so much so that he encouraged his own son to join Comfort Dental and plans to ask him to take over his franchise when he does decide to finally retire—although that is some time off. “If I didn’t think it was a good thing, I wouldn’t bring my son into the practice,” adds Stasi.
I am a retired orthodontist,having 23,000 beautiful completed cases,with Liscenses in Arizona,Texas,,Illinois, and Louisiana!!!and wondered if I might HELP and make a difference working with you!!!
Dr gene dongieux