The Joint Corp. – the Scottsdale-based nationwide network of chiropractic clinics – has grown to 362 centers across the country since 2010. Its walk-in facilities have a no-appointment policy and do not take insurance.
"We are a disrupter in the traditional chiropractic profession," according to CEO Peter Holt. "We’ve moved the business into the retail area, [and] we are bringing chiropractic care to people who have never had it before.”
Due to The Joint's unique concept in the world of chiropractic clinics, the company doesn't have many competitors, Holt says. And some analysts like what they see, with several giving the company's stock a "buy" recommendation this month, according to Zacks Investment Research.
“Right now, I don’t think there is anyone that is aggressively providing non-insurance-based chiropractic services through a franchise model," Holt said. "That doesn’t mean you won’t see competitors come in and see an opportunity, but we definitely have a very strong first-mover advantage here.”
The closely held company went public in 2014 (Nasdaq: JYNT). The stock was trading at just over $3.00 per share in January then surged in February, closing at $3.83 on Feb. 17.
The Joint was originally founded in Tucson in 1999 by Fred Gerretzen, a chiropractor who wanted to provide convenient, low-cost chiropractic services that didn’t require insurance. In March 2010, Gerretzen sold the company to a group of investors who founded the business again after reacquiring the eight original franchised clinics.
It offers membership plans, similar to Massage Envy, which isn't a coincidence. John Leonesio, the founder of Massage Envy, was hired by The Joint to put the franchise and membership programs in place. Since 2010, the Joint has expanded from just eight locations to more than 360 in 27 states today, adding an average of roughly 60 clinics per year.
“Like any system that’s growing quickly, you’re constantly trying to balance growth, while making sure that you are putting in place the infrastructure to support it," Holt said. "I think that one of the opportunities going public gave us was some real capital to make sure we have the infrastructure in place to manage growth.”
When The Joint went public in 2014, the stock debuted at $6.50 per share, and in February 2017, the stock price has traded around $3.50 to $3.80 per share, which raises the question: Should The Joint take the company private again?
“I’m not in a position to tell you about a strategy that we’re doing,” Holt said. "I think that, obviously, there are advantages and disadvantages to going public. The investors have a lot of faith in the direction that we’re heading. There’s no discussion right now about trying to take the company private.”
The Joint relies heavily on the franchise model. Of the 362 Joint clinics nationally, 61 are owned or managed by the corporate office and the remaining centers are franchisees. Last year, the company's revenue and same-store sales showed great improvements over 2015.
“In our Q3 release, we talked about the systemwide sales having increased 27 percent compared to the same period last year,” Holt said. “Revenues were up as well. In 2015, we had $70.1 million in systemwide sales and through Q3 of 2016, our total revenue sales were $71.4 million. So, we’d already exceeded the entire sales for 2015 by Sept. 30 of last year.”
“We told Wall Street that we anticipate opening up 14 clinics corporately – either buybacks or new clinics – which we’ve done,” said Holt. "Part of those are new clinics, while others are bought from franchisees. We also anticipated 50 to 55 new clinics opening in 2016. Going forward, we’re expecting to continue that trajectory of accelerated growth.”
Doreen Serio is a partner in one of the first franchise locations established five years ago – The Joint clinic at Scottsdale Road and Shea Boulevard in Scottsdale. Not surprisingly, she's a firm believer in the benefits of regular chiropractic treatments.
“I never understood chiropractic care until I got involved with this franchise,” Serio said. “I truly believe that the Joint is building wellness one adjustment at a time. It’s affordable, convenient chiropractic care. I get weekly adjustments and I take my girls to get adjusted. It’s really important to your overall health.”
Serio’s enthusiasm extends to the business side of The Joint, as well. Her franchise has seen steady growth on an annual basis.
“We had one of our best months [in December], which was due to a promotion," she said. "The Joint corporate [office] is trying to get us more business by getting people to understand and try chiropractic care. So, we’ve grown in the last five years.”
Holt says one of the challenges of running a chiropractic business is that some people are unfamiliar with the treatment protocol or even fear it. However, given changing demographics, Holt isn't concerned. He says The Joint is finding new adherents all the time.
“Particularly with the baby boomers, there has been this belief that chiropractic care is kind of quackery. So you certainly have to overcome part of that. But if you look at the millennials, they as a group are quite interested in non-invasive, natural, holistic ways to approach health," Hoyt said. "One of the challenges is educating the patient, or the consumer, about the efficacy and the value of routine chiropractic care.”