Due diligence on a podiatry / chiropody clinic

A foot-care clinic’s financial statements will not tell you the one thing that most often determines whether a purchase actually works: whether the buyer can keep legally billing for everything the clinic bills for today. Due diligence on a podiatry or chiropody clinic needs to run that scope check first, then work through the orthotics lab relationship, referral concentration and client records that are specific to this sub-sector. Treat the scope check as a precondition to the rest of diligence, not one item on a longer list — there is little point auditing referral concentration in detail on a revenue base you may not be able to legally keep.

Verify scope against what’s actually being billed

Pull a breakdown of billed procedures over at least the past two years and check it, line by line, against what the incoming clinician’s registration and scope actually permit in the sale province. This is not a check you can outsource to a general impression of what podiatrists or chiropodists “usually” do — scope varies by province and, within Ontario, between the two professions specifically — so confirm it directly against the current billing detail, not the clinic’s own description of its services. Where the mapping turns up even a small share of revenue outside the incoming clinician’s scope, quantify it precisely rather than dismissing it as immaterial, since that figure is what belongs in any price adjustment or earn-out discussion, not a rough impression of the gap.

Review the orthotics lab agreement on its own terms

Request the actual agreement with the orthotics fabrication lab, not a summary of it, and check whether it transfers to a new owner automatically, carries exclusivity obligations, and on what notice either side can terminate it. An orthotics relationship that turns out to be informal, non-transferable or priced specifically for the outgoing owner’s volume is a second revenue line at real risk, and it is worth confirming directly with the lab, not just reading the paperwork.

Quantify referral concentration and client loyalty

Break new-patient volume down by referral source for the past two years and calculate what share comes from any single physician or diabetes clinic. Separately, ask how the recurring diabetic and geriatric client base is actually retained — is it booked through the clinic’s own recall system, or does it depend on patients personally trusting the current treating clinician. A client base loyal to a person rather than a system is a real risk to model into any revenue projection built around this deal. Where possible, ask the seller to help arrange an introduction to key referral sources before closing, since a referring physician who has never heard of the incoming owner is a referring physician who may simply stop sending patients.

Confirm any minor-surgery facility requirements separately

Where the clinic performs any minor-surgery procedures on-site, check whether the province imposes facility, equipment or sterilization requirements on top of the treating clinician’s own professional registration, since these can sit under a separate regulatory framework entirely. A clinic that has been operating this component informally, or that has let a facility certification lapse, is carrying a compliance gap that a straightforward college-registration check will not surface — ask specifically, and get written confirmation of current standing rather than assuming it if the clinic has simply “always done it this way.”

Client files and ongoing care plans

Confirm how patient files, and specifically ongoing diabetic foot-care plans, will actually transfer, including what consent is required from patients before their records move to a new owner. This is not a formality — a large share of the clinic’s recurring value sits inside those ongoing care plans, and a transfer process that stalls on consent issues can slow the clinic’s ability to keep serving its recurring client base right after closing.

Equipment and diagnostic tools

Confirm the age and condition of any diagnostic or treatment equipment, and, if the clinic performs any minor-surgery procedures on-site, whether the facility and equipment currently meet whatever separate requirements apply to that component in the sale province — these can sit apart from the clinician’s own professional registration and are easy to overlook if diligence stops at the college check.

The findings that actually end deals here

• The incoming clinician’s scope is narrower than what the clinic currently bills for, meaning services it earns from today cannot legally continue
• A concentrated referral source shows signs of not continuing after the transition
• The orthotics lab relationship cannot be maintained on comparable terms under new ownership
• A minor-surgery facility requirement has lapsed or was never properly obtained, exposing the clinic to a compliance gap the seller did not disclose