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Multi-location Contracts are a Bad Idea

Here is the scenario. One doctor can own a Wal-Mart contract (or a Sam’s Club contract for that manner) for more than one location at the same time. Wal-Mart usually decides to do this if the locations are struggling with volume and/or having a hard time finding someone to fill the location.

Can the doctor physically be at two places at once or work eight days a week? No, so he hires someone. Let’s call the multi-contract owner Dr. Fingers and the two doctors who work for the contract owner we’ll call Drs. Desperate and Disgruntled. Wal-Mart needs three locations filled: Bountiful, Ghetto, and Rough Diamond.

So let’s say Dr. Fingers works Bountiful and hires Dr. Desperate at the Ghetto location and Dr. Disgruntled at Rough Diamond. The contract is similar to “I’ll pay you 70% of your gross receipts.” Dr. Desperate says fine because she just needs a job and doesn’t care about a long term commitment because she’s willing to relocate in a moments notice. Dr. Disgruntled is in a bind because he really wants to live in the city of Rough Diamond forever, but he doesn’t want to pay Dr. Fingers 30% of his gross receipts, especially when he finds out that Dr. Fingers is only paying Wal-Mart 10% or if the contract is some ridiculously low flat fee not even based on receipts.

So what happens? Usually Dr. Disgruntled will leave and try to find his next best ideal location. Dr. Fingers will probably have to funnel in and out doctors every couple years. The vision centers stagnate and never grow because the doctors who work there have no vested interest in growing the practice since they know they won’t be there long term since Dr. Fingers takes so much of their money.

I believe that it is a mistake for Wal-Mart to give any doctor a contract for more than one location just so he can suck cash from other doctors for no reason other than, “Hey, I own the contract.”

Now, I can see how some of you might say, “But what if you had a multi-doctor parnership share multiple locations equitably?” Well, you’d still have the problem of the last location not growing because the doctors rotate every day, and then which of the doctor partners would volunteer to work at the last location on its poor performing days?

It’s better for the vision centers, the doctors, and even the community to have each doctor own the contract for the vision center that they work in.

“But what about vacation days?” you say. Well, wouldn’t it be cool if each area could have it own full time fill-in person? Maybe the fill in person could always keep 100% of his receipts and not have to pay rent to subsidize the days when there isn’t an opportunity to work? I don’t know, I’m just thinking out loud here. Or you can probably find a private practice doctor who needs supplemental income to work for you. ;)

“But our store needs someone, and we can’t find anyone, so thank Heaven for Dr. Fingers,” you say. Well, that’s a short term solution that defeats you in the long run. None of your sub-contracted doctors would be motivated to grow the practice (an thus increase vision center sales) like a contracted doctor would. This scenario will just stagnate you at mediocrity. If you must hire Doctor Fingers, I think the terms should explicitly say that Wal-Mart has the option to not renew Dr. Fingers contract at the satellite location if they can find a permanent doctor when the contract expires in three years. I don’t care if Dr. Fingers is taking a “risk.” He has three years to recoup his “risk.” Take it or leave it, Fingers.

But let me restate. Multi-location contracts for a lone doctor who invariably gets greedy and pockets cash for not doing any work: BAD. Allowing a doctor to own the contract where he actually works in order to change it from slow to crazy-busy: GOOD.

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  1. David Langford says

    At Wal-MartOD.com I asked doctors their opinion about this same topic.

Written by David Langford, O.D.

David Langford is a graduate of PUCO 2003, worked as a USPHS/IHS optometrist, then as fill-in commercial, then solo private practice, and now works full time as an independent doctor of optometry inside a Wal-Mart Vision Center.

http://optoblog.com

David Langford, O.D. has written 424 posts on optoblog.com

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