FLOSS Dental is now under new ownership as they announced that Dr. Michael Tran was appointed the role of Chief Executive Officer. Since he joined FLOSS, Dr. Tran is looking to carry the torch for the FLOSS concept and naturally grew into the part of the brand's ambassador. FLOSS is honored to have him at the helm as they build the brands vision and reach.
VIDEO - DUwHF #1260 - FLOSS Dental
AUDIO - DUwHF #1260 - FLOSS Dental
Dr. Minesh Patel is now the company's Chief Financial Officer. Dr. Patel was one of the company’s first brand partners and has become a pillar on the team that is growing and shaping the future at FLOSS.
Damien Morales will serve as the company's President and franchise developer. He'll employ the knowledge and skills he learned from franchise industry leaders like Golds Gym International, where he served as National Franchise Director.
Together this group is poised to take the brand nationwide and bring, 'A New Experience in Dentistry' to patients across the country.
Howard: it's just a huge honor for me today to be podcast interviewing the three leaders of Floss Dental Group: first is Manish Patel wave Minesh he is the CFO graduate of Baylor College of Dentistry 2009 Damian Morales the one with all the hair he is a the president of floss dental and the last remaining Dr. Michael Tran the CEO wave Michael so they know it's you who went to a Howard University which was named after me which is quite ironic since they actually named it after me before I was born flawless dental is now under new ownership as they announced that dr. Michael Tran was appointed the role of CEO since he joined floss dr. Tran is looking to carry the torch for the floss concept and naturally grew into part of the brand's ambassador floss is honored to have him at the helm as they build the brand's vision and reach dr. Manish Patel is now the company's CFO dr. Patel was one of the company's first brand partners and has become a pillar on the team that is growing and shaping the future of floss Damian Morales will serve as the company's president and franchise developer he employs the knowledge and skills he learned from franchise industry leaders like Gold's Gym international where he served as national franchise director together this group is poised to take the brand nationwide and bring a new experience of dentistry to patients across the country I love the thing I love the most about you first of all thank you gentlemen for taking so much time out of your busy schedule to come on the show but I love the way you have floss off philosophy and instead of philosophy they have floss OPH why so why don't we start out who wants to explain what is the philosophy of floss dental
Floss Dental Group: take that question you know our philosophy is providing quality dentistry at a unconditional client service in an upscale environment at reasonable in network crisis so we're truly dipped by different ourselves by pairing premiere patient experience with a comprehensive and advanced offering of dental services so that's our philosophy and you know we also like to live pretty philosophy ourselves we like to look good feel good work hard and have a positive mindset every day so we try to encompass that into the brand and then hopefully it goes down to our brand partners and ultimately to our patients so
Howard: that is uh that is a very cool and so this is dentistry uncensored so no one wants to talk about what everybody already knows I always want to go right to the toughest part tell me this as you're only on a franchise I'm I've said it a thousand times on this show that you know snapchat can go public looks like we works not gonna be able to go public but um all these companies go public but none of them in dentistry do in the United States that you know there's two in Australia there's one in Singapore so why what is it about the current DSO model that doesn't attract Wall Street wait what do you think Wall Street is why do they just jump into smiles direct Club you know and then the other one um Danaher just spun off um its dental division it's called in Vista and they just how much did that go public for oh my gosh they just went public this week for five hundred and eighty nine million dollars if what you're doing is work how come Heartland Aspen how come none of those are publicly traded like smiles direct and danaher's dental arm Invista
Floss Dental Group: I guess I'll take that one I guess is that kind of what you always say in your podcast dentistry is not really a product it's really driven on the dentist being there and I think that's what separates us from like a traditional DSO I guess we're not really a traditional DSO because we're all owner operated so we do the franchising model and we get a trademark agreement and we get our systems in place and accelerate a young dentists career and usually a young dentist and bring everything but have the dentist as the owner because your nest yourself you know that nobody's going to take ownership of the work and the quality of the work in the office as the owner so I think we kind of see those challenges maybe we listen to your podcast too you're always you know saying that so well I know
Howard: I know that Rick cursor if he when he hears you say this she's gonna fall over you because Rick cursor has been saying since I was in 1987 when I was a 24 year old graduate that he doesn't want any associates he wants dentist was skin in the game and he sees when you got skin in the game you sit there and think you know I gotta pay my bills I'm gonna try to do this molar endo but if you're just associates like well that's why they have an Adonis if you got skin in the game you're like I'm gonna try to work through my lunch if you're an associate like well it's lunchtime I got a date at Subway if it's five o'clock and you're single you're going home you don't care there's some lady crying at the front desk with a toothache but to me so have you guys gotten to the point where floss dental is the link in a work built on owner-operators
Floss Dental Group: absolutely yeah absolutely that's that's the way to go move forward it's you're hitting the nail on the head gotta have skin in the game if we're gonna if we're gonna deliver that patient experience that we're promising so absolutely yeah and what do
Howard: you have no skin in the game I mean I mean you see these associates come out saying well I'm gonna guaranteed monthly a minimum day rate because I shouldn't have to worry about any of those things I should just go on and do quality dentistry it's like do they that's not even in a Disney movie I mean that is so and when you hear these other countries with socialized medicine say well I had a hysterectomy and it didn't even cost me a dollar oh really so you you see a bunch of economics that says that the consumer shouldn't be aware of the price shouldn't shop for a better price shouldn't you so you're saying that all of economics is a joke to you and you're proud of a system I mean if Medicaid and Medicare just had a 5% co-payment on every surgery it'd be the first time Americans even looked at the bill and then and when they found out that it was cheaper to let go from New York City to Dallas to get a $50,000 hip replacement where they could get it for 40,000 in Dallas they jump on Southwest Airlines for 250 bucks and fly down there and save the 5% Komi butts but when you tuck but when you say that to people they think you're some Ruth cruel guy that doesn't think everyone should get everything from free so are you saying that every single floss dental franchise is owned by an owner operator
Floss Dental Group: yes about corporate location oh go ahead we give a few corporate locations at between myself doctor trained Damian that we run but our goal is to build franchise operate owner operated model and that's where we differentiate ourselves so like you said the dentists have skin in the game they were are gonna stay late they are gonna you know feel like they work harder and not just sit there and collect a paycheck so as we develop these we find those those young dentists we provide them with you know you know introductions to banks and financing in real estate teams just to make sure that we can get them through the pipeline and make sure on the backend that we give them that support that they need because you know with the rising debt if these kids coming out of dental school it is scary to jump into something like that and you know I've been I've been practicing for ten years and you know seen ups and downs of Dentistry and you've been practicing longer so you've seen it even more but you know it's i something that that we're here to you know share in the good times put a shoulder for them to cry on if they have a bad time so that's what that's what we really want to pride ourselves in
Howard: so you probably use ten years does it frighten you that in twenty more you might look like me so um so then would eat you know if you let's pretend you're on Shark Tank to explain to mr. wonderful the smartest man on the show the bald guy from Canada explained he's gonna want to say tell me the math tell me the numbers so you so how much is a franchise um explain to mr. wonderful on Shark Tank what you're doing and and why he should buy a flaw shtetl franchise from you
Floss Dental Group: so what we're looking at doc is is to go back a step is we're gonna take folks to a what's called a discovery process to make sure that we're not finding that dentist that's trying to get out of there on a Friday at 2 p.m. 3 p.m. you know so our discovery process really allows us to find that brand partner that's going to fit our mold to fit that owner/operator style with that what we do now if we're looking at mr. wonderful we're looking at shark tank hey we've got a great brand that is made up of several variables one being our name great brand association with the industry that we're in I think the only name you could get the top that maybe Burger King with name association so we've got a great brand a lot of variables involved to making it happen like dr. Patel said we're going to we're going to reduce their efforts we're going to go out and handle a lot of the things that that they may not know how to do that we know how through you know going through 20 so offices so what we want to do is get out there and simplify it reduce their efforts and make sure that they're successful so that that's a huge part of it so if we're looking at mr. wonderful or saying hey we're going through a discovery process and we're finding the right brand partners that fit this company and that there will be great wonderful owner-operators that can deliver on that patient experience so I tell them hey look it starts with our interviewing and discovering these young dentists
Howard: ok I want to I want to start challenging that model right out of the gate um so chick-fil-a when I was your age 20 years ago McDonald's is always number one burger he was - in Wendy's was 3 Wendy's didn't pass Burger King until the old man Dave died and then his daughter you know asked all the franchisees what did you always want to do that dad wouldn't let you do and it was about a hundred little things it was no big thing it was 100 little 1% she implemented all of those and went to number 2 so ever he's like yeah well it wasn't even an hour and a half and she's back to number three cuz chick-fil-a passed all of them and chick-fil-a on their business model you only get one store they claim that you know there's too many people like take subway they just want to get rich off subway so they got 10 franchise well you got 10 franchises no one's minding the store so my exact question to you is how many are you like flea where if I get a floss dental owner/operator one location or do you see that that guy could gal could add several more locations over the years
Floss Dental Group: the financial wherewithal on the expertise and they understand what it takes to be an owner operator then absolutely let's scale them let's go out and look you know get out there and bring some specialization to the marketplace and so we definitely you know looking at multi-unit but for that dock that may just want to get out there and own their own practice hey I just want to keep everything right in front of me we've got it we've got the brand for them as well so they can look at single or multi unit ownership and
Howard: one more I want to ask one more technical question about the real estate because I'm you know every time you know there's all these threads on dental town about real estate and they always confused me because it's always talking about the entire real estate industry separate of dentistry and it's like come on dude this is dental doubt I only want to talk real estate has its place dental town but but McDonald's and chick-fil-a are not restaurants I mean they're there real estate companies they they go out McDonald's Ray Kroc figure that's out he'll go buy the land for 500,000 he'll put the box on top over 500,000 and then the franchise fee is whatever that that unit cost so let's say he put a million dollars in that so you come along you give me a million dollars now my land and building is has no debt on the balance sheet I sign you to a 10-year lease a fifteen cents of every dollar so McDonald's and chick-fil-a really have tens of thousands of locations that on the first a month I'll pay 15% and and a lot of these dentists I you know they say they won't invest in real estate well the only variable in real estate is do you have a tenant well that's why you don't want to be in b2c consumer real estate cuz you got a job yeah you got divorce something went wrong in your life you just walk from your house you want b2c real estate because if they lose their location that they're out of business and so I always think to myself well if you're in a small town and some kid wants to come down there why don't you see that old 2,000 square foot state farm building that you could the whole damn thing for 300,000 dumped as little as a hundred thousand into it and have it a six operatory dental office on a four-lane road and then that graduate can come in there and sign a ten-year lease I mean I mean if you want to get into real estate and you're a dentist stick to dental real estate but might so my exact question is are you gonna do a McDonald's chick-fil-a are you a real estate company are you gonna own that land and building or are you doing what my good friend Dan Carney the founder of Pizza Hut who I grew up with and he was so adorable he's still adorable I remember when we were in high school me and Jim Bell when we had a business idea we drive to Pizza at headquarters walk in there and tell him we want to run a business idea by Dan Carney who had you know like 2,800 locations like one of the richest met in the entire state and that gosh darn guy would let us in his office listen to our completely stupid ideas and then try to succinctly explain to us why we were 14 year old idiots but he didn't want any real estate he said if i if i could invest a dollar in a pizza and make eight percent why would i want to put a dollar in real estate and make seven percent he says i can't find a pizza hut where i would rather take that money for the land of building and put another location he said in fact he said and it is crude and rude and all even repeated because i love the guy he says um you know what you can do with that land and building exactly you know what he was gonna say he didn't want any real estate so so it's confusing to these kids they're coming out of school two hundred eighty four thousand dollars in debt they go back to Parsons Kansas and they say well I don't want to rent for two years so then they go buy land and building and their their debt sheet their balance sheet so so the question is are you guys a real estate company or a dental company are you pizza or are you McDonald's and chick-fil-a
Floss Dental Group: we're dental all the way right guys so you're a Dan Kearney pizza man you don't you're not in the real estate business we want to keep this very simple you know dentistry is complicated enough we want these we want young dentists to go out and be very successful so we want to keep everything in front of them they already have student debt they're gonna have practice alone you know
Howard: so for us let's just keep it in front but we're a dental company so okay so who is your target market are you looking for someone that graduated from 80 still three months ago do you want him out of school one year two year three year who is your perfect client Michael thank
Floss Dental Group: you perfect client is somebody like me actually since I'm the youngest one out of this group how young are ya well I'm 38 but I went to dental school it later has a second career so I've only been out I graduated 2015 from Howard did they tell you when you were at Howard that it was named after me so so um who is
Howard; your is that who you're looking for someone that's been out this is 2019 so are you looking for someone like you that's been out for years what wouldn't he just graduated in 2019 what if they just walked out of school and may
Floss Dental Group: we're ideally looking for someone who's been out about a year get some experience under their belt before they go into practice ownership but we're playing by air somebody is real really talented and everybody's a little different as you can you've experienced dentists that not all dentists are created equal and some of some really are go-getters they want to get it and
Howard: well here at amount so this is sound so racist and sexist and bad that only I can get away with saying it on dentistry uncensored but chick-fil-a's had the same problem and I I see the same success chick-fil-a if they're gonna go into a small town you got to be born there you got to be married and you got to have kids I mean because when you hire an LDS Mormon associate in Phoenix Arizona and he's got to stay home wife with three kids that guy there is an hour early work through lunch and I'll take it emergency an hour after clothes but when you get the single kid daddy did it daddy paid for school no dad he's like oh my god tender at 4:30 and you know meeting some girl for a drink at a bar so the bottom line chick-fil-a gets this more than that that's why they're off on Sunday because they want you born that city and part of a tribe which is the local church so if you're born in Parsons can you go to this church for the thousand people and you got kids in those local schools it's its family but when you try to explain the economics of that it just doesn't sound pretty because we want to say you know everybody's the same everybody works the same but man if you got if you're a when you see three my dad you so I say when you see three hungry coyotes walking down a dirt field something's gonna die and so is that what you're looking for hungry franchise I mean are you more like chick-fil-a where you want to married with kids and as much debt as possible
Floss Dental Group: no we that's what our discovery process really is is to vet our our potential brand partners we want to see you know we look at the whole picture you know and we want them to understand what it takes to go into practice ownership you know what kind of hours are gonna be working and you know we we really want our our brand partners to immerse themselves into the community I'm a prime example you know where I live practice in work in Sugar Land Texas I've been here elementary middle high school so you know and I'm out in the community people see me you know I wear my shirt everywhere I go and it's just it's home to me our other brand partner that just opened up you know up in Katy Texas he's from Louisiana but he lives out in that area and he's trying to immerse themselves in that community and we have different types of grant partners you know some that are married with kids some that don't have kids some may be on tinder at four in the morning I'm not sure but you know we really work them through that discovery process just to make sure that they understand what they're getting themselves into as well
Howard: so what you do on tenders you put your photo on upside-down so that when they turn the phone around to look at you and swipe no it's actually yes that's my put your picture on my profile I can get a lot more swipe rights so don't you think you're a hypocrite though to be a dentist and live in Sugar Land I mean what do you can tell me next your favorite sport is hockey cuz it knocks out two eath I mean couldn't you move to floss land from Sugar Land I want to go to technology there they're coming out of school the management information systems the number one player is dent Roksana eagle soft open dental none of them connect to an accounting form how do you guys monitor your your franchisees when I was 10 years old my old man's restaurant sonic drive-in that cash register was built by NCR which later got bought by IBM it had more managerial economics in the cash register on a roller tape then I do now I'm 57 I got four kids made five grandkids and all the dental software is still horrible compared to a cash register at a hamburger joint in 1972 so what are they all on the same management information software how do you what are you runnin these franchises what type of technology
Floss Dental Group: we're still unopened dental and since everybody's like individually owned and operated we really run everything through practice by numbers everybody's got practice by number so we've got multi office we can control the numbers and then we go through all through the same dental CPA firm in Houston
Howard: Wow we are twins my god I'm I switch to open dental after 30 years of soft end we have practiced my numbers and and so you use a dental CPA which firm is that –
Floss Dental Group: it's called a Virgie consulting vir j ee consulting - r GI j je vir je veux g consulting yes Victor yeah so um so they only do dentists is that what you're saying
Floss Dental Group: that's his primary niche he has quite a few clients you know associate dentists as well as practice owners and then he does handle all of our floss offices currently you know we get real-time feedback on numbers percentages and then you know with practice by numbers we have the ability to track our brand partner offices to make sure we can kind of see what they're doing you know we've got the ability to remote in if they have questions on x-rays or anything along those lines we can provide feedback we've got a 24/7 support line where we answer questions within 24 hours of our brand partners have questions for us so just you know part of our secret sauce there
Howard: and he's in a Houston Texas can you do me a favor can you deliver him to the show get because we both agree on open dental why well let me let me hear what your what you guys why did you pick open dental Frankel
Floss Dental Group: it's open and then we also use yappi just it's a lot easier to get your data if anything's wrong you we were on evil soft patterson before like just an example like when you do want to do a treatment plan for Egosoft and you wanted to face treatment out you would have to go through each line item and press the phase one phase two you couldn't just highlight everything and put phase one and that took me forever after a couple years of complaining and nothing got changed so we want something open that open dental updates a lot quicker you give them feedback and things change I've seen so many changes it just keeps on improving and I think okay
Howard: I gotta slow you down a quarter of my viewers are still in dental school you lightly said because it's open well explain to them what is open about open dental and
Floss Dental Group: what is not open about ventric sneagle soft and soft yet so it's not connected to one of the supply houses dent ryx and Patterson dentures is shine of course but your database is open so if somebody wants to develop something on it you're all the information is available to the developer whereas it's closed off you're gonna have to go through permissions with Eagle soft and dendrix and all that just takes a lot longer for development yeah and everybody everybody is switching to the only open platform in dentistry it's open dental in fact I own a media company so you know
Howard: I sell advertising in the magazine and and my advertisers and the people who sell advertising downtown you're so mad because they say I run off half the people that would ever advertise because I'm always making fun of them but open dentals the only dental software company that advertise because they're growing so fast there their problem is onboarding new programmers not sales so yeah so opinel is obvious so now go back to omar Virgie president at Virgie consulting in houston and this is something where you know in 1900 there were no dental specialties I mean no medical or dental specialties by 2000 the MDS had 58 we had 9 now it's 20/20 we got 10 why did you choose a CPA I mean as obvious it sounds why did you pick a CPA that specializes in dentistry
Floss Dental Group: understand overhead numbers percentages where things should fall in the dental aspect of things as well as certain you know write-off says loosely is that to use in dentistry these days 179 deductions cars whatever you want to do the other reason we chose him is that he was local to us in Houston so since our headquarters are here in Houston myself and dr. Tran are probably nowhere no more than eight to ten miles from his office so we have the ability to pop in see him as needed if needed tweak the numbers kind of how we have our numbers you know we've got our budgeting and supplies are a little bit different since we you know we are buying on group but with all these you know group buying powers these days they all come very similar but that's t kind of one of the banners that we chose and B he focuses just on dental so he could really what percent what percent dental do you think he is wow that is so dang cool can you deliver him to the show for me yeah no problem
Howard: I think you may have just had a kid or as having a kid here that's good that means he's hungry that means he'll he just put off his retirement another 20 years if you're thinking about having a kid and you've never done a root canal the first root canal you do should be on your own vas deferens you'll save a million dollars doing that but yeah I mean I love it when people send me emails say you know what I disagree with everything you said except for you talked me into getting a dental CPA it was the best move I ever made I mean because and the reason so I'll explain too and when you have all your information and quicken and you have all your other information and dendrix you're you're technically a complete schizophrenic you have you know two brains and they're never gonna be dealing with perfect information so it becomes an art and a site just like we do in dentistry sometimes I was in a root canal yesterday and you know sometimes you just see things where you have to use common sense and when all you're doing is dentistry you can say well I don't know all I can tell you is that of the 12 clients who dropped this dental HMO ever all 12 their cells went down but their net income went up so that tells me you were doing this at a loss now to actually get out all the data and to prove that well you don't have the day if I walk into any dental office in America and you just walk out of an op tour and you did two mo d composites I'll say how much did you charge for those two mo d composites they never know the right fee because they're signed up with 10 different PPO plans so and they always tell me a fee that's higher than any of the 10 plans they join it's like really dude you're sure you get 250 for an mo d composite cuz you actually signed up for 10 and none of them are that high and then I'll say well when it was all done and said what was your cost of our did after the hour did you net nine dollars and 18 cents or you lose 20 bucks they never know so the number one takeaway if you're listening this deal is get a dental CPA because you're basically Stevie Wonder driving down i-10 at 70 miles an hour and you're kind of dangerous and so Omar could so I love getting on dental CV so if you can deliver Omar that that would be great B Howard what's that was being cheap
Floss Dental Group: when I first opened up I was being cheap I got a cheap CPA we just had a refile on my last couple years taxes just so stuck on paying the CPA fee but he charges us he actually was a flat brain so he charges us $500 a month per office which is which is not too bad but I would have had an $80,000 tax liability this year so he's like what the hell is your old CPI doing and so we had to refile everything he did and got it down so I would like 13,000 taking all the deductions for the past years and how many offices do you own now we go down to with my wife she's a dentist also Catherine Castillo and then I'm partnered with two with dr. Patel but we're in the process of getting some brand partners in there to be owner operated
Howard: so so so floss dental today has four locations we've got a total of ten locations six of those are brand partners for those corporate locations now out of those ten three of those are in development one of those is in DC and two in Georgia so hopefully those should be opened hopefully in the next three to six months okay
Howard: so you're in Texas in Georgia and you have been assumed to be in District of Columbia so you skipped Louisiana because the Saint cuz Drew Brees broke his thumb he's out for the rest of the season oh he's getting too old so we're like let's just bypass the whole state so if someone's listening to you is this right now only a three state plays this Texas Georgia and Washington DC what is there to you from Arizona
Floss Dental Group: absolutely this brand works in a lot of different markets you know we have our bread and butter that you know big big box stores high-end you know good traffic day type traffic areas but for the most part the brand works in urban it also has transit into the suburban areas and we think to also even go into some of the smaller rural markets as well so but we're open across the country we're open for business you know looking to kind of duplicate this business model from city to city
Howard: and how long is the onboarding so when you're vetting a partner and they come meet you guys what do they do they they come to Texas and get a job as an for tell us what how do you vet your partners
Floss Dental Group: so what we do is just a simple discovery process which a lot of the franchise industry has used for years it really helps answer a lot of questions on both sides allows us to discover who we're going to be working with and it allows them to discover us as a partner in business and so what we do is we start out with a lot of initial phone calls we'll jump on a few webinars we'll invite them to our corporate locations in in Houston we hold discovery days on Friday so if you want to come out and visit the Buran emphasis of call will schedule some time we'll get out to Houston you can visit the docks talk with them see how our service model runs look at the build-out and really get to feel and touch the brand before you ever even look at an agreement so we really slow that process down make sure that it's something for both parties something's gonna work for both parties we're gonna be married for 10 years
Howard: is that the length of the agreement your choice you're married 10 years yep so currently right now we're just a trademarking company we've just recently taken over the company a year ago but we'll soon to be on a franchise disclosure document by the beginning of 2020 and so right now we're just trademarking but soon to be we'll have a federal disclosure document and we'll be registered and a lot of the registration states across the country so right now it's just a simple discovery process come visit us in Houston we've got a trademark agreement but come 2020 we'll have the same process but we'll have all our brand partners signed up on a franchise disclosure document so so
Howard: so what is what is succinctly though what is your franchise model so they're they you're looking for someone who says I really don't want to do this myself I'd really like some guidance so so what is your model um explain your model and what are the fees for this model
Floss Dental Group: so we have an initial trademark licensing fee of $50,000 and then our ongoing royalty is 3% of gross collections monthly we have a ramp-up period so say yeah it's $50,000 for a franchise fee and then and then three and their side of collection yes with a ramp-up period as we know when you first start a practice it takes a little bit of time to ramp up so we do build it a little ramp up here and give it a little buffer we have a insurance team a marketing team that helps create the marketing ideas we have obviously you know the discounts with our suppliers invisalign we we've got we try to negotiate discounts with all of our vendors that are our partners can share in and then we've got our support line we even have it's still on constant development but we actually have a website that's just for our brand partners called floss University where we upload a bunch of tools and compliance stuff and HR handbooks and OSHA HIPAA you know all the all the stuff that you don't want to deal with and think about on a daily basis you just go online you can download all the books all the software that we share with our brand partners as well as protocols for front and back and you know you get those unruly assistants that need to be written up you get we have a forum for that as well so just just things like that that can take some of that stress and those headaches off from our new Korean partners and
Howard: then you'll set them up on an open dental four and practice by numbers and yappi a lot more than that doc will go out and find them the right real estate that way the metrics line up with successful flosses in the past
Floss Dental Group: so we're gonna go out find them the real estate we're gonna help them negotiate their lease we're gonna take the banking process we're gonna prepare their loan package make sure it's submitted to the proper lender you know we're gonna get out and do their construction design make sure it's false ready work on their initial equipment order supply order we're gonna have to manage that you know so we're looking for that person that doc that says hey you know
Howard: I want to own a practice I'm ready to do it my skills are ready I just don't know the whole business side of it I really want to focus on dentistry that's who our that's who our potential is okay I got some follow-up question that so you take Heartland they don't brand a national name kind of like Kroger when Kroger goes into Kansas somebody's Dillon's they leave the name Dillon's making much Arizona by Friday later Friday all kinds of groups or names or as Walmart they're all Walmart they're all Costco what is the advantage of them all being named floss dental versus having them be monition dental Michael dental and Howard dental yes
Floss Dental Group: I'll take that one so historically flossing around for about 10 to almost 12 years now actually started during the recession but so dr. Patel was saying we get some Invisalign discounts so historically we're the number two general practice provider and in the u.s. over 5,000 something cases then vis line summit is coming up this year dr. Patel will go up on stage and receive as little a little reward for so collectively we do a lot of cases and you just give it such a huge discount with Invisalign and same thing with all of our suppliers so that's that's the benefits you get of course on the flip side you also have that liability there that's why we go through such a stringent discovery process because we need somebody we are having the same name so so something dentist does something bad in one area it's gonna really affect all the brand partners so that's why we're really stringent on that discovery process
Howard: I'm sad that you skip Louisiana because I your name floss dental and dental floss was invented by dr. Levi spear Parmley a dentist from New Orleans so you might want to go back and at least put one flaw shtetl in New Orleans just for the spirit of dr. Levi sfera Parmalee but what did you think about got to other questions I'm what did you think about um dinaher just went public and so Danaher spun off their whole dental division and I've lived through this rodeo when I was your age the biggest Procter & Gamble Johnson Johnson company in Europe with Siemens they had this little dental division called Sirona they spun it off of course the building didn't move the building was still there but it turned out great because who would want to have parents that didn't want them and that the holding company didn't do anything with them and they just blossomed for the my whole career and Jesus married x-ray and so Danaher it's like how lucky I mean that the parent company didn't even love you and now you're off by yourself you're gonna explode but it brings up a question about dental supplies because if you go on dental town and you type in dental supplies there's so many dental supply I mean we've had several on this show so explain you're talking about dental supplies and this line and Danaher and all these deals how do you help them with supplies that they can't do themselves and why is supplies such a weird game and dentistry
Floss Dental Group: well I see nobody wants to answer that question we've got a couple of different partners I mean our big one but then we've got little partners one a company that was local and Houston protect supplies it just give us a lot we get all the disposables for them but I mean they do their work and they save a lot of money for it but if you asked them like how many trips do they go to China and test all these products I mean you'll save a lot of money and that's what we do we've sourced source of things through them got a discount through them and then we go through Darby dental and then we put all of our office together and then we get we get special markets pricing with them
Howard: so you you said protect professional products because they're in your back yard is are they do they sell everything you need in dentistry I mean can you run an entire dental office they just focus on disposable is like your suction tips air water syringes all those things and then for us they've got really great customer service because we order something and they can deliver the same day or the next day Wow and how old of a company is this pretty new it's about two years old and how does a company like that 2 years old I'm just get up and start competing with Shyne Patterson Benko and Burkhart how does that happen more
Floss Dental Group: wow this isn't supposed to be known but I think they they supply a lot of those guys for their house brands so I don't know if that's supposed to be public information but so dude you feel like and
Howard: what do you feel on a franchise model as a percentage of collection what supply should be
Floss Dental Group: 5% our goal but some of our offices are running about four percent and what is so so you're saying four percent is goal and some of them are running five percent and in the new office might go around as six percent but when in a new office is ramping up we don't really care about those things it's just once we get more efficient will not one or two percent doesn't sound like that much when you're doing a hundred thousand dollar collection a month or more than that it starts adding up for the whole year
Howard: and what do these franchises accept DSOs PPOs I mean Delta Dental where they send you the fee
Floss Dental Group: yes we are in network with most PP O insurance companies but one of the things that we do before we open our practices is heavy negotiations through a credentialing company up front we want to make sure that we are maximizing our reimbursements and getting getting hopefully relatively fair market value I mean not not gonna get your fee for service fees but one of our one of our pitches is that we say we're in network in your neighborhood so we're in network with a lot of the PPO companies obviously there's some that we want to drop at the outset just cuz they deny everything but you know for the most part we're in network but to help that we really work on that fee negotiation upfront and
Howard: when you're working with protec are you working with Adam block or not working Adam block really dentists owns it also James Pham James what James fan pH am pH am
Howard: so this is the Vietnamese dental mafia is he a dentist his partner is my buddy I grew up with Andrew mouth yeah so he's the is he a practicing dentist
Floss Dental Group: yes he's got like seven seven offices he own so he wanted to lower his supply bill then it just you he just said he thought it was gonna be easy but then there's so many trips and then so many trips to China then he wanted to expand it out and pass along the savings other people
Howard: so you know I what the one thing that I always think is bizarre about supplies is you know these people these dentists will just get infatuated on supplies but my god after you pay your labor and lab who cares what supplies are what do we have you said supply should be four to six percent what do you think labor should be well what is goal for labor
Floss Dental Group: so 25 percent would be the max the net right now we set our target about twenty two percent and every was a little bit different depending on the market also
Howard: so when you say your goal for labor is twenty two percent does that include FICA matching uniforms online see II is error is or is that just their net paycheck that includes everything that's so so labor should be twenty two percent and you see it a lot in older offices where they're fifty sixty seventy where they given the girls a dollar raise every time the earth went around the Sun their whole the whole raise systems based on astrology and the next thing you know they're trying to sell their office and they got 30 percent labor it's uh it's so what do you how do you keep labor so compact at 22 percent
Floss Dental Group: advice you always talked about you hi and Sandy the best consultant there was so we hired her while back and she helped us implement a lot of our systems just uh but she recommends doing a percentage so if you're if your goal is 25% you come in at 22% that's gonna be their bonus 3% or whatever you said that so I think that's the easiest way to do is that what would you that's what we do so
Howard: so then you you pay 25% labor and again anything if it comes in at 22 the rest is bonus so you'll pay 25
Floss Dental Group: yeah well that's an example of saying for a start-up office albeit that I say that 22 percent nice and what he's
Howard: referring to Sandy's I remember nice but got out of my office and got soft at and everybody said uh well the best soft in traitor in the world is sandy so I called up her sandy and she said when you want me to come out and train your staff I said I I don't want you to train myself I want you to work for me oh you can I got this successful business Oh what do you make and then i I paid it I mean you see it in sports where they really want this quarterback or running back they really want a great player and what do they do they get out their checkbook and what he Dennis do oh I I found this girl living behind a dumpster at Circle K and I was able to get her for a dollar an hour and free nitrous and it's like so let's think about the the second biggest expense behind labor is lab what do you what's your thoughts on lab bill what should that go be
Floss Dental Group: about seven percent seven percent and the first thing she's gonna ask I know is she's thinking and she just heard you say that is
Howard: um do you recommend that she buys one hundred and fifty thousand dollar cad/cam machine it makes her own crowns should she be a chair sight milling laboratory technician or should she take an impression and
Floss Dental Group: send it to a lab man we do a lot of Invisalign so all the offices have a night arrow so you're gonna take digital impressions but even with that we found some doctors still want to take a digital analog impression even when we have the digital scanners in the office so so answer again so you you do recommend as a CEREC machine or you do not recommend okay we don't we we recommend digital scanners we'll do digital and we'll send it out the restorations out to the lab I think that's the easiest to scale up now that if an owner operator wants to have that workflow then there'll be a his decision but we recommend doing the digital acquisition sending off to the lab and then we'll see to it so and
Howard: what scanner do you like and why do you like a scanner I'll let somebody else for me personally
Floss Dental Group: I'm a night arrow guy just because I do a high volume of Invisalign and then crowns I don't I don't do a lot of implant workflow dr. Tran on the other side he's really big on on implants hybrids all on floors all on sixes you name it he does it so he'll tell you he likes his trios better in that situation but for the for myself in my practice I prefer the Invisalign route and so hi Tara to me is a seamless integration they have you know very easy for my team members to scan with the I Tarot and get it all loaded up to Invisalign relatively quickly and that's where we vet our brand partners and see are they gonna be implant heavy digital workflow are they going to be primarily Invisalign with your crown Bridge fills and then we guide them in that direction to what we think would be best for their practice and
Howard: so now that you're in the franchise mode I am maybe I'm biased as I'm in Arizona but Arizona mmm just last month first state in the Union where our pro-business governor said if your license for anything in any state whether it's an engineer accountant a hairdresser or a dentist your license in Arizona do you think that will have no impact on this why dentists in Arizona do you think you'll have a mild impact maybe one or two percent or are you gonna go with see a major impact and in 24 months we may have like a 10% increase in the number of dentists moving to Arizona what's your gut feeling on this probably a mild impact I know it's really affected dental education because everybody can go there and do live surgery courses a lot easier now but
Floss Dental Group: I think if anybody's going to that market they'll see that in the in the big cities it's very saturated so I don't think everybody's just gonna flock to Arizona or Phoenix for example well actually
Howard: I got to give that credit to the hands-on courses with my buddy oh my gosh where he basically went to the board and he he runs a homeless shelter and the board you know you can't come down here and do hands-on surgery so he has a homeless shelter only for military vets and he has a six operatory dental office and he says if license dentists come to my homeless center and they only do dentistry on vets can they do that without a license well how do you say
Howard: Joe Joe Merrick man fire no I'm my gosh I'm he's gonna shoot me how did I forget it oh my god what's my buddy's name no it's um it's a bright bright bright way right wait yeah into bed Joe actually taught me how to do lateral sinus lifts great guy Oh Joe math arrow or Joe yeah but but who's the guy who works for with that I'm not sure isn't oh man oh gosh it's so tough getting old let me see if I y'all right way I can't uh but anyway anyway it was it was so great because the way he phrased it to the org well if you said no it's gonna be on the evening news I mean who who would turn down you two gentlemen dentists flying from Texas to Phoenix to work on homeless vets and I mean it was just genius so so he did all that so the board just like I'm not touching that yeah you come down here to work on homeless people you don't need an Arizona license so and that was a big part of the market because you have all these courses in like Dominican Republic in Mexico which sounds fun for a bunch of drinking guys a lot of girls like I don't I don't know if I want to go there by myself alone to a foreign country but I'll go to Phoenix Arizona so uh brightway was it was good for that but does it interest you does do you start thinking is the stickiness of not having a dental license and moving around does that make Arizona did it put Arizona on the map for one of your next expansion states
Floss Dental Group: absolutely yeah absolutely I think think it'd be unfair to say it didn't so yeah for sure you know we want to be in a good position to receive so hopefully if things work out we may turn into our advantage so
Howard: and and just just so you know for the data Arizona is ground zero for DSO so when you look at the the data about what percent of the dentists are involved with a DSO so you guys consider yourself a DSO no what do you consider yourself
Floss Dental Group: trademarking company that also lends support so you're kind of defining DSO is when a dentist's employee working for you where you see this as an
Howard: owner-operator model so in your mind an owner/operator doesn't really fit into a DSO I mean I agree I agree I I think the closest model to what you're doing is Comfort dental which is really Rick Kirchner that's really a real estate model I mean him and Cindy have you know 300 dental offices paid off or in the first month you know 300 people write it right in my rent check it's really a read Chuck even though he runs mcDonald's I mean he he runs a serious awesome business but back to the DSO just so we're keeping it real here Arizona is 18.7% of the dentist participate with the DSO whereas in Alaska it's zero point zero Montana I mean I mean so yeah this is I mean like you take a state like Alabama is there's a lot down there no it's not even it's less than five percent but Arizona is number one which is exciting for me because I truly believe the final business model has not been invented yet for a DSO where everybody's gonna be employees that you look at law half the lawyers work for a firm but they're able to make partner well you can go work at Heartland for 150 years or Aspen or whatever that they're they're not interested in a partner they want to do you know it's a stall game so I think I think the few if you want dentists as employees you're gonna have to do what you do some someone's got to be a partner at that location someone's got to be an owner operator and you can't take the brightest lawyers dentists and physicians and say oh you're gonna be under my thumb like the Rolling Stones for the rest your life they got to see light at the end of the tunnel then one day they're gonna own this joint and so it's exciting to be watching I hope I live long enough to see the final business model to where something could even go public on Wall Street like Price Waterhouse
Floss Dental Group: we do to our we do too because because it's it's clearly not invented yet I'm
Howard: so lab though you said labs seven percent do you use all of one lab and do you is how you can keep lab at seven percent everything's going through one lab is it in Houston
Floss Dental Group: so we actually do own a lab so we've got a lab man but we also give our everybody's got a choice so you can go to our labs gonna be cheap a little bit more affordable because everything's made this the us we're right here in Houston actually or we have got great pricing with in DX and DX lab so we can partner with them okay so explain what nNDX lab is that the that's the turn they've got a bunch of labs of different cities they got Keller and Missouri just all kinds of different labs that we've negotiated with them
Howard: so and so you have your own lab correct and where is that lab and what's the name of that lab lab at our flagship location and how was that working out in your business on I mean you start a lab we just talking about your friend James farm who I hope you deliver on the show will you deliver him to the show I would love to do him in your dental CPA I'm to our international viewers which is at least half the show my gosh on Texas is the most rockin hot booming part of the economy right now it's not the it's not the the Rust Belt it's not the Northeast it is Texas it is absolutely crazy for my five grandchildren live in Beeville Texas which is outside of Corpus Christi about an hour from Houston so I'm down there a lot but I'm so so your friend James Fonda sides open up dental supplies and compete against shine I mean you open up your own dental lab when there's people like Glidewell how do you what are you thinking when you set up a lab and you're ready to go compete with Jim Glidewell
Floss Dental Group: so as of right now we're only doing it as a benefit for our brand partners to lower their overhead you did a lot better pricing than anywhere else you don't have to send it to China and then we also got one of the best lab men's he's he's old-school he's got he went to Lab School in 1993 he as you know now that's a dead dead all those schools died down he went to lab school in 1993 for two years so we're very fortunate to have him but the issue is he's not that great with digital so my digital journey was when I did a UT Houston a JD got out in 2016 bought an office and I got a trio scanner and then I was locked out of Invisalign that's why I let dr. Patel answer that one because I'm a little still bitter about that buying a trio scanner and then wanting to use it for Invisalign and then I had to buy not Terro scanner but then I got hooked with 3d Bobcat are you familiar with them yeah
Howard: so you didn't like having to get em locked out because you bought another oral scanner and then Invisalign decided they weren't gonna be open and yet ascended the scan for right arrow is that correct correct and what did you think of that business move I mean did they they cut off their nose to spite their face I mean were they trying to sell the eye tarot scanner division because Invisalign is owned by a line which owns I Tarot and Invisalign and I thought to myself well well I don't want to save my eye Tarot business if it's gonna hurt my cash cow Invisalign do you think that's what they did or was it a good strategy looking at it now do you think he was played the correct strategy
Floss Dental Group: I think it definitely increased my Attero sales but also alienated alienated a lot of dentists even a lot of orthodontists now so I'm not sure I don't know the numbers well enough but I've thought about it a lot I just don't know the numbers well enough to see if it was a good move or not but personally I think it was a bad move yeah I am
Howard: yeah I I thought that was bizarre I mean again it's like it's like not opening up a great location because you could know in the real estate you know I mean I mean sometimes the best location you're not gonna be able to own and if you're we were set in yourself where you're not gonna undo that so so is it Invisalign a big part of your success or clear aligners I should say
Floss Dental Group: I would say so I think that's part of what we get when we somebody joins our brand partner just like I mentioned for historic movies like the number two provider and then comparing that why that significant is the most we had was like 20-something offices when you've got these big giant DSOs or these other groups that are a lot larger than us but we've just done more clear aligner therapy historically in the past
Howard: so this is that from superior marketing I mean how do you how do non orthodontists become number one in that design
Floss Dental Group: I think it's just what we call our new experience and dentistry bring in bringing the patient in our new patient workflow taking an ortho models and ortho pictures in everybody and just talking about talking about their issues at hand and seeing what they want to do with their issues and then that's been working yeah basically but putting everybody through the through the process and a presenting clear aligners for everybody is pretty much we believe pretty much every patient can benefit from clear aligners almost if they have straight teeth then we move on okay
Howard: so we talked about these I going public we're Danaher just spend off in beast I love the name because in Vista the the sticker stock is nvs and and n sta so you you know you remember in Vista you know sorry just like the other one is a x-ray for ben-hur but um but what do you what do you attribute I forgot where he's going with that question where was I going with that question public we've talked about that but I think our business model is it is it set up to go that route because every how people sell off is like they group all the offices together and they saw their sign for 10 to 12 XE but
Floss Dental Group: uh but we're not even owning the office we're just providing the support and the trademark agreements franchising really so then but we're not grouping we're not owning those together so unless something changes in the foreseeable future we're not going public anytime soon yeah but
Howard: is that is that your exit strategy down the road I mean is that where you want to be someday no we're gonna keep on with the owner-operated model and best that's our niche that's our as Damian alluded
Floss Dental Group: to we think we have the best besides Invisalign in the dental market floss as a dental office we're kind of biased and think our branding and our name is the best in
Howard: the industry well that was the fastest hour I think I've ever done I'm trying to think was there anything that you I would have asked that I was a smart enough to ask I mean is there any anything else that you wanted to talk about you know really
Floss Dental Group: basically for me it's just you know we've got a new ownership group we're heading in a totally new direction and we're looking we're working with what has made this brand successful and and I tell you what you know we got two dentists and a franchise developer here and you know I wouldn't want to go to battle with anybody else so you know I think the main thing is just so we got a whole new leadership team moving forward so so so back to the expensive stuff the high technology you like the CB CT you use the I Tarot are you said what is your CB CT oh you have prexy onon offices Praxian yes prexy and CB CT who's your 3d printer started off with the form - um I just got the newsprint ramped row and then might pick up another one that's a little bit more accurate for models but form twos are our workhorse so prexy in for the CBT and and then form - for the 3d printing and what do you what are you printing um with a 3d printer models or digital so we have our digital designer so when we say somebody needs a step or I do guided surgery take the CBC T take the digital interrupts can combine those together and we need to do a backup or the guided surgery or even got it okay
Howard:I knew where I was going with Invisalign I was saying we talked about the Invisalign going public last week but the other one was smiles direct Club so do you think smiles direct Club will have a material impact on your Invisalign business
Floss Dental Group: I think it's actually a great eye-opener to some of the casual public that maybe wasn't looking at clear aligner therapy in the past I have patients every day that asked me about it that I talk about Invisalign with they asked me about smile direct Club and I tried to tell them what the difference is and at the end of the day you know they're consumers they will make their own decisions I smile to rent clubs here to stay I don't think they're going anywhere anytime soon but it's opened up the doors to a lot of patients that maybe have not thought about clear line of therapy in the past and in and hopefully you know they we get to a point where we can you know we can service them as well and you know give them their clearances whatever maybe but don't know that's everything happen in that situation
Howard: well you know III I've already lived through that rodeo I mean I remember when clear choice came out all the periodontist and oral surgeons were all up in arms and all mad they thought I was gonna kill their business and then they come to Phoenix Arizona and do like eight trillion dollars where the television advertising in 30 minute infomercials and every other day some of your patients have been going to you for 30 years to come in and say do you do that tell me I just saw that on TV for so the marketing raised this for everyone and the one thing I'm always wondering about is when these orthodontists are all upset about smiles direct club it's like well first of all dissect their business model they're cheaper why because they're not gonna see them every month they throw out 80% of the cases they just want the class 1 molar class one canine 5 6 millimeters or crowding max they're not gonna take staffs on a 12 year old and try to tell you what she's gonna look like at 18 and do bicuspid extractions or they're just taking the low-hanging fruit and they're saying you know we're gonna save money instead of seeing you every month we're gonna see you one time and give you all your trays and I was gonna worked on us like well why can't you do that I mean I mean if I go to the muffler shop they have a economical muffler a premium muffler and a supreme muffler I mean so do you see in the future that you might when when Chrysler came out with a minivan when when they came out in a minivan you know how many years Chrysler was the only deliver of a minivan with Lee Iacocca one year you know what the other 11 car companies did the next year they all rolled out a minivan they like that thing they say Wow ugly you're selling a lot of them looks like people want a big boxcar and then next year Chrysler had no advantage of the minivan so I'm like okay well if smiles direct club can go public and Heartland and Aspen can't and you're an orthodontist here a board-certified orthodontist I don't know I would think this could have some intellectual impact on your own business model do you think there will be any impact on a business model or are they just gonna throw down their crowns and walk out of the room I think there'll be some impact but you know it to me honestly and a lot of people don't like my opinion I think small direct Club being out there is actually not a bad idea no dentists orthodontists it creates more awareness at the end of the day it's more awareness for people that for patients that potentially have malocclusions that have never thought about it before and hopefully they don't you know smile to run clubs not feeling out there there's bytes there's candid there's a bunch of other ones that are starting to hit market and so you know
Floss Dental Group: I have patients in my office that they asked me about smile direct club that we've never talked about it clear line a therapy in the past before and so their eyes have been open because they see the commercials literally everywhere on every TV billboard you know mobile vans you name it they're there so I think that the ESC orthodontist up in arms because they're saying how can they practice dentistry without a license but in my opinion maybe not happy with what most people think about it
Floss Dental Group: I think it's great because it's opening up doors to you know to oh and my last ran
Howard: I've seen it in my own backyard is smaller Club has like five locations the entitled orthodontists they're just screaming arms want to go to the society pass laws put them out of business because they think competition is bad and while they're saying competition's bad inside their own body right now white blood cells are killing foreign invaders because they're competing for the same resources that you're eating and so competition is it every level of biology from eukaryote to a prokaryote to inside your own body and then when I see the orthodontist who or Mormon would stay home Weiss with five kids you know what they're doing they're gonna smiles drug club and bringing them cookies and candy trying to get 80% of the cases that those guys don't want and they're just well and they're saying and don't say that on your TV show because they don't want anyone else doing us so competition that's why immigrations great because when your country is not doing well and you don't let your people move out to another country that's a red flag something's wrong and if someone wants to move here from the other side of the world that that's always been the best idea so no restraint of immigration and unlimited unbridled competition is what's given us everything from the pyramids to landing on the moon you know mean so if you're if you're against competition and you're against immigration then I really wish you would just not tell anybody and or or leave because I think what this is gonna do and by the way I own or that I own or 'the town magazine and website so you know it really pisses off a lot of my customers as i say this but my gosh use this opportunity and to go think about this go for a walk in the woods and when you come out of there you could be taller than the trees and on that note I'll just say to you guys it was an honor for you to come on the show it was an honor to share your brand how do they contact you if they are thinking about a Foss franchise
Floss Dental Group: they can email me at Damian at floss dental comm that's D am i en at occidental comm and we can pick up the conversation there and you also have you go to floss dental comm forward slash franchise that that's a neat link I really enjoyed reading that what's the floss dental we Stokes calm oh that's just one of our other practices oh that's just that that's just an individual location yes okay so I'm delete that and then the floss dental franchise what if they go to floss dental comm ford slash franchise what are they gonna see there yeah you say bunch of information about the discovery process and the services the branding and also my contact information they could fill out a form as well and we can get in touch with them right away and
Howard: you guys know where Beeville is yeah oh my god it's actually the exact center of the universe four out of five of my grandchildren are there I'm there all the time when will you put a flaw shtetl in B though when you're ready Howard it's on the big board now so I got I got embarrassed my grandkid you know what I'm not gonna say who it was because it might get back to him but they you know what they asked me last time I saw him they said as soon as the mom walked out the room he goes what's the worst guest word ever and I said the worst cuss word in the world you can't it's so bad you can't even say it and he was just drooling what is it what is it I said it's supercalifragilisticexpialidocious and he spent the entire day trying to learn that word gentleman next time I'm in Beeville I'm gonna roadtrip down and see you guys thank you so much for coming on the show and I hope you do deliver I would love to get a James Pham on the show and your your dental CPA because if the only thing you learned from this program today is to learn use Omar Virgie just just use a dental CPA that only doesn't seem all my friends like I got a friend that owns a 11 waffle houses they only use CPAs that only do waffle houses I mean I mean there isn't a CPA that thinks eats lives breezin - and and I asked the stupidest question I said why do you think waffle house is better than Denny's oh my god I got a three-hour lecture on how to make a waffle I mean they're serious as a heart attack so the success is complicated it's not easier everyone in figure out so get yourself a dental CPA and surround yourself with people that can help you gentlemen thank you so much for coming on the show today