non-chiropractor-own-a-chiropractic-practice

Can a Non-Chiropractor Own a Chiropractic Practice in the State of…?

Investors and other buyers looking to purchase a chiropractic business often email us to ask “Can a non-chiropractor own a chiropractic practice?”

The quick answer is that in approximately half of the states,  it is legal for a non-chiropractor to own a chiropractic practice.  And of course, that means that the other half of the states do not permit non-DC ownership.  So the best answer is: it depends.

How Chiropractic Franchises, Multi-Disciplinary Practices Get Around this Rule

The primary reason that the answer to this question is not a fixed one is the fact that each state can establish its own set of rules or requirements regarding if a non-chiropractor can own a chiropractic practice. But a quick survey of businesses in any given state will reveal that there are chiropractic franchises and multi-disciplinary practices being operated and owned by non-chiropractors. So how do they get around this rule?

The answer is fairly simple — the legal structure of the business ownership. While I’m not an attorney and not privy to the exact details of how the legal structure workaround takes place, but a simplistic explanation is that a management entity corporation is created to own the chiropractic practice.  That management company is “owned” by a chiropractor or chiropractic group.  The actual business can then be owned and operated by whoever underneath that management company.

Depending on whether the management company is a franchise, an individual investor or some other variation on the theme, the business(owned by the non-DC) pays the management company a flat fee, royalty or some other arrangement for their ownership of the chiropractic practice. This is how chiropractic franchises such as The Joint Chiropractic® and similar businesses operates in every state and why non-DCs own those franchises, even though they may be located in a state that does not permit a non-DC’s to own a chiropractic practice.

Which States Do NOT Permit a Non-Chiropractor to Own a Chiropractic Practice

In their franchise disclosure document, The Joint Chiropractic® points out which states would require setting up a separate entity to get around the issue of non-DC owners. (see link)  According to their research, the following states forbid non-DC ownership:

1. Arkansas

2. California

3. Colorado

4. District of Columbia

5. Florida

6. Hawaii

7. Illinois

8. Kansas

9. Kentucky

10. Maryland

11. Michigan

12. Minnesota

13. New Jersey

14. New York

15. North Carolina

16. Oregon

17. Pennsylvania

18. Rhode Island

19. South Dakota

20. Tennessee

21. Vermont

22. Washington

23. West Virginia

24. Wyoming

Accordingly, in these states, you would have to set up a management entity to legally work around this issue.

Which States ALLOW a Non-Chiropractor to Own a Chiropractic Practice

These states fall on the other side of the fence and, at this time, do not have any rules expressly forbidding a non-chiropractor to own a chiropractic practice:

1. Alabama*

2. Alaska

3. Arizona

4. Connecticut

5. Delaware

6. Georgia

7. Idaho

8. Indiana

9. Iowa

10. Louisiana

11. Maine

12. Massachusetts*

13. Mississippi

14. Missouri

15. Montana

16. Nebraska

17. Nevada

18. New Hampshire

19. New Mexico

20. North Dakota

21. Ohio

22. Oklahoma

23. Texas

24. Utah

25. Virginia

26. Wisconsin

*Alabama and Massachusetts fall in between and permit a non-DC to own a practice, but require a special permit or registration.

Do Your Due Diligence

This intent of this article is to help both chiropractors looking to sell their practice and buyers looking to purchase a chiropractic practice navigate the issue and answer the question “can a non-chiropractor own a chiropractic practice?”It is NOT intended to be legal advice and the information above can change within a moments notice, so it is upon you to verify its accuracy. In other words, to definitively answer this question, you should do your legal research to confirm this info with the state you wish to own a practice.

Additional Resources

Looking to buy a chiropractic practice?  Check our current listings of chiropractic practices for sale.

Not sure if you can afford to buy?  Consider our Practice Financing 101 webinar – it’s free and full of helpful info to get you there!

Thinking about Selling your practice?  Check out the Exit Essentials webinar – which will give you the “need to know” basics before you sell.