What do our veterinarian, orthopedic surgeon, and The Little Gym have in common?
- As per the New York Times, The Little Gym franchise was bought by a private equity backed group that, as per legal filings, increased fees and did other things the franchisees felt threatened their profits.
- From personal experience our vet and orthopedic doctor’s office have given poorer service since they were acquired. We’ve been going to doctors at Orthopedics International for decades, multiple generations of our family. I then noticed the name was changed, asked our doctor about it, and he said they (the docs) don’t have to worry about administration but… The but being they are now tied to metrics, and it always seems everybody is rushing around to meet tight deadlines versus taking time with the patients.
- Our vet started sending notices our dogs need their “six-month” checkups. Never have we heard of six-month checkups. Heck, if they didn’t need shots for the place they go when we travel, they wouldn’t need annual checkups.
We stress to buyers and sellers it must be a fair price and the goal is to have a seamless experience for the customers. But guess what happens when a buyer overpays and/or needs to provide above-market returns to investors? Everything tightens up and the culture takes a hit. And preserving or improving culture should be one of the buyer’s top objectives.
Keep in mind the above is not about all private equity firms or those doing rollups. I know some great people in the field who do manage to preserve culture while growing.
“Millions long for immortality, who don’t know what to do with themselves on a rainy Sunday afternoon.” [Novelist] Susan Ertz
“Start every day with a smile and get it over with.” W.C. Fields