Why we sold the franchise

Turbulence

Almost 12 months since my last entry.

I find myself on a plane headed back to Maryland after meeting with my partners in SoCal about my short- and long-term plans now that the sale of Doctors Express has been finalized.  We announced the sale of the franchise business to American Family Care (AFC), based in Birmingham, AL a few weeks ago.

What took me away from doing what I love with and near the people I love in the place I love?  One of my best friends and Ensign partner, MikeD, started a new venture within the org. in a new sector of healthcare – urgent care.  He had already brought on a couple urgent care veterans to accelerate his learning curve as he planned to build several centers de novo.  Quickly after the venture got off the ground, their plans expanded into a couple new paths including the acquisition of the only urgent care franchise in the country – Doctors Express, based in Maryland.  Mike asked me to lead that business and they made it worth my bet.

Personally, it was a high risk/high reward proposition.  Much to my surprise (and the surprise of my family and friends and colleagues) my wife and I decided to go for it after just 4 days.

By the time I could transition my role to “the upgrade” BHulse, my new partners were already underway with Doctors Express.  10 months after I joined … at our annual conference in March in Vegas, I told the franchisees that the best word that I could think of to describe the last 12 months is TURBULENT.  Turbulent because even though there were bumps along the way, the plane kept moving forward and the system made huge improvements in terms of number of centers, patient count, and revenue.  2013 is definitely poised to continue its upward trajectory.

So why sell?

Good To Great

You have to understand Ensign’s culture to understand the answer.  The book Good to Great teaches a lot of the same values and strategies that have been part of the Ensign Way for years …

“The pivot point in Good to Great is the Hedgehog Concept. The essence of a Hedgehog Concept is to attain piercing clarity about how to produce the best long-term results, and then exercising the relentless discipline to say, “No thank you” to opportunities that fail the hedgehog test. When we examined the Hedgehog Concepts of the good-to-great companies, we found they reflected deep understanding of three intersecting circles: 1) what you are deeply passionate about, 2) what you can be the best in the world at, and 3) what best drives your economic engine.” (source)

hedgehog and fox

Mike and I (both 11 years with Ensign-related businesses) concluded that, in spite of the promising future for the Doctors Express franchise, being a franchisor was a significant departure from our hedgehog.  I found myself in the peculiar position of recommending that we sell the business I lead – making my future uncertain – b/c I believed it was the 1) right thing for Ensign and 2) the right thing for the franchisees.

A cornerstone to the culture at Ensign is the independent/interdependent nature of the facilities, agencies, and companies.  Franchising requires strong (sometimes rigid) corporate control to retain brand standards among franchisees who bring a vast range of values, motives, and competencies to the system.  At Ensign, the word “corporate” is a ‘bad word.’  I constantly wrestled with the misfit between my/our approach/culture and the approach/culture a franchise system requires.

square peg round hole

Fortunately, we became acquainted with AFC and quickly saw their huge corp. infrastructure and decades of urgent care experience AND TRADITIONAL CENTRALIZED CORPORATE structure to be a better fit for franchising.  Could we have continued the upward ramp of the last 12 months?  Yes.  No doubt.  I think many, if not most, organizations are driven principally by the numbers.  In our case, no matter how pollyannish this may sound to outsiders, Ensign’s success is largely attributed to our hedgehog-based discipline to say no to seemingly great financial opportunities that are only attractive because of the numbers but do not fit with who and what we are.

I admire many of the franchisees and staff I worked closely with and I will be cheering AFC and Doctors Express on for years to come.

Gratefully, I will be returning to what I know and love: senior care/skilled nursing. In the coming weeks & months I’ll be writing about lessons learned 1) at DRX and 2) from returning to skilled nursing.  Good to be back …

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7 thoughts on “Why we sold the franchise

  1. What an awesome journey you’ve been traveling on the last 12 months Dave! Looking forward to reading your next entry!

  2. Dave – thanks for sharing. I think the wisest decision you made was to sell when you had a clear picture of the road ahead. During my private entrepreneurial days, we persevered several years with building our clinical documentation software, getting several hospital clients, continually reinvesting and then painfully realizing what a tiny speck we were in the huge world of healthcare IT. All of life is a compliation of lessons learned so now you are smarter / wiser as you embark on your next opportunity. I am appreciative of you first getting me interested in Ensign where I am having a jolly entrepreneurial time. I wish you great success.

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