An owner who already runs one franchise clinic can finance a second unit on the strength of a working business with its own records. This post builds an invented $80,570 budget for a second chiropractic clinic in the Carmel, IN area, splits it across equipment financing, a term loan and the first clinic's cash, and checks what both payments take.
An invented $80,570 second-clinic budget, $22,800 of tables and computers on equipment financing at $494.02 a month, $37,770 of fee, front-desk equipment and deposit on a term loan at $726.68 a month, and a $20,000 reserve from the first clinic. Figures are invented; the county count is from Census data.
How to finance a franchise's second unit: the budget lines for a second chiropractic clinic
County Business Patterns counted 374 offices of other health practitioners, the group that includes chiropractors, physical therapists and optometrists, in Hamilton County, IN in 2023. Illustration only, invented figures for a second clinic in a leased space:
| Line | Invented amount |
|---|---|
| Franchise fee for the added unit | $24,500 |
| Three electric adjusting tables at $6,180 | $18,540 |
| Front-desk check-in kiosk and phone system | $5,870 |
| Computers, tablets and a printer | $4,260 |
| Rent deposit | $7,400 |
| Working reserve | $20,000 |
| Total | $80,570 |
Changes to the space itself, plumbing, wiring and anything mounted outside are property work handled with the landlord and contractors, outside this site, and are not in the budget; reception seating and desks are furniture and stay out of it as well.
Splitting the second clinic's budget between equipment financing, a term loan and the first clinic's cash
The tables and computers, $22,800, can serve as collateral, so they go on equipment financing: 60 months at an invented annual rate of 10.85% is $494.02 a month, $6,841.20 of interest over the term.
The franchise fee, the check-in kiosk and phone system, and the rent deposit, $37,770, go on a term loan over 72 months at an invented annual rate of 11.4%: $726.68 a month and $14,550.96 of interest (our arithmetic). The $20,000 working reserve comes from the first clinic's cash, so no loan pays for money that sits in the bank.
In this invented case, putting both parts, $60,570, on one 72-month term loan at 11.4% instead would ask $1,165.34 a month, $55.36 less than the two payments together, but $23,334.48 of interest against $21,392.16 for the split, $1,942.32 more, because the tables and computers would be paid over six years instead of five (our arithmetic). The split also clears the equipment loan a year sooner.
The first clinic as the record: what an owner of one unit can put in front of a funding partner
An owner of one unit has bank statements, tax returns, time in business and a record of patient visits from a clinic that already runs, which is more than a projection for the second location can show on its own. A funding partner may look at those records first, and the request form asks for time in business and annual revenue, which come from the first clinic.
If the second clinic will be a separate company, the owner can say so when calling; a partner may ask which business signs and whether the first clinic or the owner also stands behind the payments.
Franchise business loans month by month: when each payment for the second clinic starts
In this invented example the equipment financing is signed in March, when the tables and computers are delivered, and the term loan funds in May for the fee, the front-desk equipment and the deposit. If each first payment falls a month after signing, the owner carries the $494.02 payment by itself in April and May, and both, $1,220.70 a month, from June on.
If the second clinic needs longer than planned to carry its own costs, a working capital loan can bridge that stretch; the reserve is there to delay that decision. The medical practices page covers physician offices, and other articles are on the Meadowleaf blog.
By Meadowleaf Finance · Updated
