How do therapist revenue splits work when you buy a physiotherapy clinic?
A revenue split is the agreement under which a therapist keeps a share of what they bill and the clinic keeps the rest. When you buy a clinic, read each written split, ask whether it carries over to you, compare it with what was actually paid, and avoid changing the terms right after closing.
Many physiotherapy clinics pay some or all of their therapists a share of the billings rather than a fixed wage. The split is often what keeps those therapists at the clinic, and it shapes what the owner earns. A buyer takes on those arrangements along with the rooms and the equipment, so each one deserves a careful read before closing.
What a written split usually covers
Start with the share each side keeps, then look at the details around it. Ask who pays for supplies, equipment and admin support, and whether those costs come off before the share is worked out. Look for terms on notice before leaving, and on whether a departing therapist may approach the clinic’s patients. Some arrangements are only a handshake, which is a finding in its own right.
Whether the agreement carries over
The answer depends on how the deal is structured and on the wording of each agreement, so ask your lawyer to read them. Ask the seller which therapists would stay with a new owner, and speak with them if the seller allows it. A split that can end on short notice gives the buyer less certainty than one with a longer commitment.
Changing splits after closing
A new owner may want different terms, but a change soon after closing is a common reason therapists leave, and their patients may follow. If a change matters to your plan, raise it with the seller early and decide how to handle it before you commit. Keep the therapists informed about who is buying and what will stay the same.
Check the paper against the payments
Ask for the written agreements and the payment records side by side. If what was paid differs from what the paper says, find out why, and who agreed to it. Whether a therapist counts as an employee or a contractor is a question for your accountant and your lawyer. Do not assume the label in the agreement settles it.
Related reading
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Due diligence
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Canada Revenue AgencyGovernmentRestrictive covenant
- 03Business Development Bank of CanadaGovernmentWhat is Cash Flow
- 04Business Development Bank of CanadaGovernmentWhat is the operating profit margin?
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