Clinic contracts are easily the least discussed topic in the health industry. Google how to start your business, sell your meal plans, or design your online program and you’ll find tons of helpful articles. But a quick Google search to learn what a typical clinic contract looks like will get you nothing.
Seriously. Why is it so hard to figure out what you can expect to find in a clinic contract?
We've decided it is time to start an open and honest conversation about clinic contracts. We have chatted with several health professionals who anonymously shared what their clinic contracts look like. According to their responses, here are five things you can expect when it comes time to negotiate and sign your own clinic contract.
1. Paying Rent vs. Paying a Split
There are two main payment agreements between the clinic and the practitioner: a rental agreement or paying a split. Of the practitioners I spoke with, most of them were working on a split at their clinics.
A typical split ranges from 60/40 to 80/20 with the largest percentage going to the practitioner. For example, if your intake appointment is $190 and your split is 70/30 you would take $133 and the clinic would take $57.
Most contracts where you pay a split will include a maximum and minimum per month. For example, once your payout to the clinic reaches $3,000 in a month, you take 100% of everything else. Many clinics will also expect a minimum to be paid. For example, you must bring at least $800 to the clinic per month.
Paying rent is a lot less complicated. This option is probably best if you plan on bringing your existing client base with you. Rental costs depend on how many days per month you will be using the room and where the clinic is located. We learned that $80 to $150 per day is a common range for rent.
Red Flag: It is not reasonable to pay out more than 40% of your consultation prices unless the clinic can guarantee a very high volume of referrals every month. Don’t be afraid to ask for a better split as this is usually something the clinic expects to negotiate on.
2. Commission for Product Sales
Most clinics carry products like supplements, skincare, cold-pressed juices, etc. As a practitioner in the clinic, you can expect to make a commission when your clients purchase products directly from the clinic on your recommendation.
You may also be asked to recommend products from the clinic’s dispensary rather than selling products yourself. If you will be agreeing to use the clinic's dispensary exclusively, ensure that they carry brands you will be happy to recommend and a wide enough range to support your practice.
Typical commissions for product sales range from 15% to 30%. Some clinics calculate commission based on the sale price of products and others base it on the markup.
Red Flag: If your commission seems low and you will not be able to sell your own products to clients at the clinic, don’t be afraid to negotiate a higher commission. Especially if you expect to bring a high sales volume with your clients.
3. Non-Compete Agreements
When you enter into a clinic contract there will always be some kind of non-compete agreement. Don’t take it personally. This is totally normal! Always read your non-compete agreement thoroughly and ask questions if you’re unclear. Do not rush through this.
Reasonable non-compete requests often include:
- Not working at other clinics within a certain distance.
- Not soliciting clients you meet at the clinic when you leave.
- Not practicing within a certain distance for a period of time after the contract ends.
You will also be asked to sign a non-disclosure agreement to respect the privacy and safety of the business, practitioners, and clients you work with there.
Red Flag: If your non-compete prohibits you from working within a distance greater than 10 miles (16 kilometers) or for a period longer than two years after the contract ends, you may want to negotiate those requests.
4. Branding, Logo, and Communications
Even if you have your own business name, logo, website and email, you may be asked to work under the clinic name and use their branding. Usually, the clinic will request that all handouts and meal plans use clinic branding and that you communicate through the email address associated with their web domain.
If you are using That Clean Life to create meal plans, grocery list and/or recipe books for your clients, you can easily upload a business logo from Your Profile. This makes it quick and easy to create resources for your clients using the clinic's branding.
5. Booking and Payment Processes
When you’re working at a clinic it is very common that clients will book through the clinic’s booking software and pay through their payment terminal, especially if you are paying a split. If you are paying rent, you will usually have more freedom to book your clients and process your own payments.
Find out what booking software the clinic uses and what their process for paying practitioners is like. The common practice is that you will send an invoice for your portion of the split once per month and the clinic will pay that invoice. Monthly payouts are the industry norm.
Before signing your contract, ensure that you have a thorough understanding of what the booking process will look like for your clients. Will the front desk staff send their intake forms or will you have to do that? Does the clinic booking software include features for electric health records or will you be responsible for paying for and managing your own EHR software?
Red Flag: If the clinic director doesn’t have answers to your questions or a smooth process in place for booking and payments, spend some more time discussing this before signing the contract. If anything feels weird or disorganized, trust your gut and don’t be afraid to speak up!
Have you ever signed a clinic contract? Let us know what your experience was like in a comment below! We would love to continue this conversation and shed light on a topic that has remained in the shadows for far too long.
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