The Joint Corp at 25th Annual Consumer Growth Conference: Strategic Shift to Franchising

On Monday, 09 June 2025, The Joint Corp (NASDAQ:JYNT) presented at the 25th Annual Consumer Growth and E-Commerce Conference. The company unveiled a strategic pivot towards a fully franchised model, aiming to enhance profitability and streamline operations. While the shift promises long-term growth, short-term challenges include consumer uncertainty affecting new patient acquisition.

Key Takeaways

• The Joint Corp is transitioning to a fully franchised model to improve clinic operations.
• The company expects increased profitability by 2026, surpassing previous EBITDA ranges.
• A $5 million stock repurchase program is in place, supported by a strong balance sheet.
• The Joint is focusing on a pain relief marketing strategy to attract new patients.
• The company anticipates operating 1,950 clinics in the U.S. in the future.

Financial Results

• Corporate clinics generated nearly $71 million in gross sales last year.
• The Joint anticipates $10 million in additional gross sales this year from pricing actions.
• System-wide gross sales reached $530 million in 2023.
• The company expects to exceed the $10-12 million adjusted EBITDA range by 2026.
• The Joint holds $22 million in cash with no debt and has initiated a $5 million stock repurchase program.
• Franchisees enjoy high-teen EBITDA margins, with clinic opening costs between $200,000-$250,000.

Operational Updates

• Transitioning to a fully franchised model, The Joint aims to exit 2025 as a pure play franchisor.
• 93% of corporate clinics are under active LOI for sale to franchisees.
• 90% of franchisees operate multiple clinics, with 30% being chiropractors.
• The company is targeting multi-unit, multi-brand franchisees for expansion.
• The Joint envisions a potential for 1,950 clinics in the U.S.

Future Outlook

• Strategic initiatives include acquiring new patients, extending patient lifetime value, and optimizing pricing.
• The focus is on increasing clinic profitability through higher revenue per clinic.
• The company aims to retain patients longer and ensure fair pricing for services.
• Attracting sophisticated franchisees with access to capital is a priority.
• The Joint plans to have a different overhead profile by 2026.

Q&A Highlights

• The company is confident in attracting and retaining chiropractors despite static school outputs.
• There is a growing trend towards embracing chiropractic care at a secular level.
• Short-term consumer market uncertainty is impacting new patient acquisition.
• The Joint is positioned as a low-cost alternative to traditional chiropractic care.

Readers are encouraged to refer to the full transcript for more detailed insights.

Full transcript - 25th Annual Consumer Growth and E-Commerce Conference:

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: Well, good afternoon. Thank you all for joining us. This my name is Brian Nagel. I’m a senior equity research analyst here at Oppenheimer covering consumer growth and e commerce. This is our twenty fifth annual Oppenheimer consumer growth and e commerce conference.

I’m very appreciate all of your attendance. So I’m pleased to have with me, with us the next or next presenting company, The Joint, and, two of the company’s executives, CEO, Sanjeev Rasdan and, CFO, Jake Singleton. So, gentlemen, thank you for joining us.

Sanjeev Rasdan, CEO, The Joint: Thank you, Brian. Appreciate you having us here.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: Absolute. So we’re gonna structure this as a, informal fireside chat where I ask questions and the management team of the joint answers the questions. To the extent there are questions from the audience, just send them through the chat, and I will make sure to work them into our conversation. So I thought, gentlemen, I thought we start just for, you know, maybe investors listening that are not as familiar with The Joint. If this wanna talk of this, kinda give an overview of of of the company and and and strategic positioning of of of the organization.

Sanjeev Rasdan, CEO, The Joint: Absolutely, Brian. Let me start by sharing that we we go by the joint corporation and we do business, as the joint chiropractic. We are a chain of national chain of chiropractic clinics, very mission driven. We were established in the year 1999. And our mission is to improve the quality of life through routine and affordable chiropractic care.

We do that through the close to a thousand clinics that we now have across 41 states across The US. And what sets us apart is this very unique patient proposition that we have. You can come to The Joint without an appointment. We’re open weekends. We’re open evenings.

All our locations are very retail next to, daily needs drivers. Your patient treatment plan is portable geographically no matter where you go. You can be treated at any of our clinics. And we’re incredibly affordable relative to chiropractic care elsewhere. What I mean by that is we are a recurring revenue model.

85% of our revenue comes through membership plans. And the cost per adjustment that our patients pay is either lower than or no more than the co pay that they might land up paying elsewhere at their regular chiropractor. So we are a self pay only completely cash based business and that proposition makes us super unique. It’s so unique that we are larger than our top 10 competitors put together and then some. In fact, no other competitor has been able to replicate our model at any meaningful scale.

The size of the business so that you understand this is over $20,000,000,000 By that I mean the chiropractic care business in The United States, right? Out of that 20 plus billion dollar business, we operate in the self pay or cash pay business which is somewhere in that 45% of that market. So let’s call it 8 and a half billion dollars. And there’s another $12,000,000,000 that is reimbursable or insurance based. So huge overall business size with Secular Wind.

So that’s what the the patient proposition is. In terms of the investor proposition for our franchisees, we are a predominantly franchise model. Our franchisees can open a clinic for as little as anywhere between $200,000 to $250,000. Average clinic volumes are $600,000 So pretty respectable or pretty handsome sales to investment ratio, which makes it very attractive for our franchisees. So, yeah, that’s a little bit of really high level overview about us.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: That’s very helpful. So, you know, you’ve been a your company has been a regular, attendee at our conference. We appreciate that. I mean, one of the biggest shifts, you know, as I as I researched, you know, did my work ahead of this is that you’ve really you’ve really you’ve changed to a franchisee model. You know, and you you mentioned that, Sanjeev.

So maybe you wanna discuss that here, you know, how from a business standpoint you have that shift to franchisee model has evolved and maybe some then Jake can jump in with some of the financial implications of that.

Sanjeev Rasdan, CEO, The Joint: Absolutely, Brian. So for context, I joined The Joint, just over seven months ago. And I took the opportunity to assess the situations, spoke to a wide variety of our stakeholders, understood the industry. And what became very apparent to me that we are best served by pivoting to a fully franchised model. We currently have 25 corporate clinics.

We’re in the process of selling all of them to other franchise operators. And 93% of those corporate clinics are at the moment under active LOI. So we are actively in the process of refranchising them. The thinking behind that or the why is that essentially two things. One is that we believe that franchise operators are going to be able to do a better job than us of operating these clinics.

We think they’re gonna be closer to the business. These 125 clinics are geographically dispersed. We’re breaking them up into about five bundles and then having distinct operators pick or selling these to regional operators who I think are gonna be closer to these businesses, be able to run them therefore more effectively. So I think it’ll help us run better clinics and get fresh capital into the system. And these operators are going to want to grow over time.

The second thing that it allows us to do as a corporation is to essentially completely restructure our overhead. As we get to a pure play franchise model, it allows us to really reshape our overhead and emerge in a much more profitable way coming out of refranchising. And Jake, I know you may want to add to some of that color.

Jake Singleton, CFO, The Joint: I think that’s the critical piece of the equation. Know, if you’ve seen our financials recently, either our annual report from q four the q one, you know, then presented with the discontinued operations presentation. Right? So we’ve taken a lot of that corporate segment and carved it out into that discontinued operations. And so now you’re starting to get the semblance of, you know, how the business will trend as we get to that pure play franchise.

I would say the things that you, you know, that that may be missing in that historical look back is, you know, the influx of revenue. So last year, those corporate clinics did a little under under $71,000,000 of gross sales for those operating clinics. Right? We won’t get a % of that pass through, but we’ll now get, you know, the royalty structure that comes from that. And so that historical look back is missing that revenue topside.

In addition, we’ll continue to rationalize the G and A cost as we, you know, conclude these larger transactions. So you’ll see that G and A profile come down quite a bit as well. And what we’ve said is we expect, you know, as we go into 2026, it will be a more profitable company than we’ve been for the last three years. Right? Last three years, we’ve kind of been in this $10.11, $12,000,000 adjusted EBITDA range.

And we think as we get into 2026, that we’ll have the ability to do more profit than that.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: And so how long is the the transition going to take from here?

Sanjeev Rasdan, CEO, The Joint: So we we believe that we shall be exiting 2025 as a pure play franchisor. That is our intent. That’s what we’re working through. And as we enter 2026, we are we have a high degree of confidence that we will be entering with a very different overhead profile.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: It is as you look at the talk about who your your typical franchisee is. Is it in in in within your know, think you mentioned, Sanjeev, we have a thousand locations at this point. Are there are there are there are there there franchisees with multiple locations or is it typical single operator, that kind of thing?

Sanjeev Rasdan, CEO, The Joint: Yeah. This is the beauty of our model. So we as the end of last quarter, we had nine sixty nine locations. 90% of our franchisees are multi clinic franchisees. So, that makes it quite exciting for us.

30% of our franchisees are doctors of chiropractic. Which is great because these are folks who know the business, clearly, build their own practices and are deeply committed to our mission. The good news is 70% of our franchisees are actually not doctors of chiropractic. You don’t need to be a doctor of chiropractic to be a franchisee. These are folks that are entrepreneurs that hire or employ doctors of chiropractic.

There’s several of our franchisees that have eight, ten, 15, clinics. Our largest franchisees have somewhere in the vicinity of 45 to 55 clinics. And then we’ve got a very significant amount in that, I’d say, 10 to 15 range. So broad spectrum franchise concept. Going forward, I think it is our intent to bring on, continue to bring on franchisees that are multi unit, multi brand operators who, are more sophisticated in terms of their, operating philosophy and their ability and access to capital whilst also continuing to encourage single or or multiunit doctors of chiropractic who might want to come and build a business with us.

So we will continue to have a two pronged approach.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: So as investors now with the news the new structure, they’re taking quickly taking shape. How should we think about the, you know, the the unit growth prospects for the company going forward?

Sanjeev Rasdan, CEO, The Joint: Brian, when we, assessed the business or I certainly took a look at the business earlier this year, we are at nine sixty nine like I said. In our estimation based on the data that we have available to us, we think there is a runway for nineteen fifty clinics in The United States alone. So a lot of white space still to be built. Clearly, there is there’s some work to be done that will allow us to unlock that growth. I think the single biggest thing that will drive that is even more profitable clinics, right?

So the more the stronger profitability we we create, I think the more our franchisees are incented to grow and build these clinics. The operating, model is quite simple. The single biggest cost level at clinic level is cost of labor. And so the best way for us to drive franchisee profitability is by pouring more and more revenue into the box. So I’ll give you some color to that.

It takes, like I said, anywhere between as little as $200,000, 2 hundred and 20, 2 hundred and 50 thousand dollars at the outer to open a new clinic depending on which part of the country you’re in. Our average clinic volumes are roughly $600,000 right? And at those volumes franchisees are making EBITDA margins in the high teens. So this is a pretty profitable clinic level business. As we grow those volumes to a stronger number and get our any a new clinic opening to those mature sales faster, that’s what we’re working on.

I think these these clinics start to become even more, compelling for franchisees. So that’s what we’re working on. Our revenue driving plan, if I pivot from here to share a little bit of that with you Brian, what will make these clinics more profitable is very simple. We’re looking at it in in three ways. We have a plan to bring in new patients.

We have a plan to extend the life of the patients with us, the lifetime value. And we have a plan to make sure that they’re paying fair value or fair price, if you will. Okay. If that’s okay, I’ll sort of just give you a quick

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: Please.

Sanjeev Rasdan, CEO, The Joint: Explanation of that. In terms of bringing new patients into our model, what we’re doing is pivoting our external messaging or our advertising towards a pain centric message. Eighty percent of our patients come to us when they are in some kind of dealing with aches and pains. Our historic messaging to our patients has been around ongoing wellness. And wellness is the core philosophy of chiropractic, but the trigger that brings them into the doors of The Joint Chiropractic is pain.

So we are pivoting on the messaging. Our messaging is going to be much more pain focused and therefore we will have a sharper positioning externally around pain. Once they become patients, we shift that messaging around wellness and help them understand how, using chiropractic care regularly is really important for your ongoing health and longevity. So I think that’s just, one pivot that we’re making. The second thing we’re doing is amplifying that message by shifting our marketing dollar spend from bottom of the funnel to middle and top of the funnel.

What that helps us do is build more brand awareness, therefore driving over time more organic leads into our clinics which typically come at a much lower cost and bring in more new patients. And the third thing to bring in new patients is search engine optimization. We found, as I’m sure other businesses have, that this SEO landscape changes almost every six months. Instead of only Google that was used previously, right? People are now using TikTok or Reddit or Instagram as search engines.

And so we’re optimizing that for ourselves. So those are the three things, sharper message around pain, more middle and top of the funnel spend, and search engine optimization to bring new patients in. Once they’re in, we are working on extending their lifetime value. We’ve just soft launched a new mobile app which we’ve not had previously. And we’ve got plans to improve what we’re calling patient facing technology.

These tech innovations like the app, what they allow us to do is to have over time a one on one relationship with our patients. So the average patient stays with us for about seven months. As we speak to our patients directly through the chat feature in the mobile app, we believe that we can share with them stretches that they should be doing at home, connect with them on treatment plans that the doctors laid out for us, send them nudges to come back to the clinic when their adjustments are due. So by doing all of the above, even if we can extend their their the span of time they stay with the brand by a week, we believe that that is extremely meaningful to us. So that’s the making the patient stay longer.

And the third component of how we’re driving more revenue into our clinics is through dynamic revenue management. The last time we took meaningful pricing was in March of twenty twenty two. There’s been a significant inflation in our model since then, which we have not been able to offset through productivity or pricing. And as a result, clinic level margins have eroded. So our plan is to in the balance of this year, take some pricing actions which are relevant and meaningful and at the right price point that our patients can afford.

And that we believe will also really help to alleviate some of the profit short term profit pressure or profit erosion that has happened at clinic levels. So those are the three big drivers of revenue. I think the cost structure other than that is pretty stable. We are not seeing any ongoing labor inflation, and this will help us really strengthen those clinic economics.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: That’s very helpful. So I know other similar models I’ve studied. The question I wanna ask is, is there are there enough do do you have enough chiropractors out there? Or is that is that is that a limiter to your growth?

Sanjeev Rasdan, CEO, The Joint: Thankfully, we have not had that been a limiter to our growth. With that said, I think the chiropractic output from chiropractic schools in The US has been fairly static. The annual, output from chiropractic schools or the graduates, if I may call them that, is somewhere in that 10,600 to 11,300 chiropractors a year. So there’s definitely, and that number, that range hasn’t changed for the last decade or so. So we are quite uniquely poised to be a employer of choice just given our scale and stature in the industry.

Our model takes away from the chiropractor the things that they do not enjoy doing. For example, working with insurance companies or administration and tons of paperwork and we allow them to actually do stuff that they enjoy. In other words, spending the most time with their patients. The average chiropractor at The Joint will do 50 adjustments per day. The average chiropractor in The US will do a hundred adjustments in the entire week.

So chiropractors love serving patients, taking care of patients. They will do much more of that at The Joint exponentially more than they might at a local practice. So that’s why we feel that that has not been a challenge for us at the moment. We’ve also built tremendous amount of bridges and relationships with all the large and influential chiropractic schools in The US. We have presence on their campuses.

We work directly with those schools on a variety of different ways including aids and grants and scholarships and just lunch and learns and preceptorships which is the equivalent of an internship at a chiropractic school. We’re just working very collaboratively to make sure that our proposition is clear to chiropractic students and that we present the compelling opportunity that that it is to come work for The Joint.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: So, Sanjeev, you talked about the pricing the pricing adjustments. I mean, I I know that’s something you’ve discussed in your recent quarters. Just maybe you can elaborate further in the adjustments you’ve made then. Jake, if you wanna jump into it, how how the this is the financial implications for the company.

Sanjeev Rasdan, CEO, The Joint: Yeah. So let’s go back to the problem that we’re having. Right? So and and therefore, the solution will start to to have more context. The cost of chiropractors and the reception staff that we have that we call wellness coordinators, that started spiking, around the time of COVID.

It had been on a steady trajectory. 2020, ’20 ’20 ’1, we found that there was a significant inflation of their wages. As a result of that, I was alluding to earlier, the unit level EBITDA or clinic level EBITDA was impacted. And this was because our franchisees and us were neither able to offset that wage increase through pricing. We did not, make an effort to do that and neither were we able to find any productivity to offset those inflationary pressures.

So then the question is why were we not able to do pricing? I think we were caught in a paradigm. So let me explain what the pricing model of The Joint is. Eighty five percent of our patients are on a membership plan or a recurring revenue plan. Depending on what part of the country you’re in based on the local demographics, cost and per month is either $69 70 9 dollars or $89 The vast majority of our clinics are on the $79 per month wellness plan which gets you four adjustments with your chiropractor every month.

That’s the construct of the model. You then have a couple of other price points like a walk in only price point which is $55 per adjustment and a initial visit which is $29 where you get a full exam and an adjustment for just $29 to make sure that we can get people into our funnel. Previously, when somebody was taking pricing at one of our clinics, they jumped $10. So from 69, you went up to 79 or 79 to 89, which is very substantive. You’ve got to be incredibly thoughtful and we would do it maybe once every two or three years.

What we’re pivoting to now is a dynamic revenue management model where we’re testing multiple price points. So what I mean by that is, if you’re at 79, we’re testing a price point taking you from 79 to 82 instead of taking you from 79 to 89. And we believe by taking pricing in $2.03, $4 instruments, increments, I beg your pardon, it gives us the license to take pricing more frequently without becoming a burden on our patients and therefore essentially minimizing any impact of pricing to demand, right? So that’s how we’re thinking about it. We’re literally in the process of either concluding some tests or initiating some others.

And we believe that as a result of what we’re learning, we will be able to take some thoughtful and purposeful pricing in the second half of the year. Jake, I’ll turn that over to you.

Jake Singleton, CFO, The Joint: Yeah. On our our q four call, you know, as we were putting out guidance for the year, you know, it’s a similar question asked in terms of what the contribution would be. We’re estimating this year that it’ll be around 10,000,000 of, you know, incremental gross sales just through the influx of pricing actions. So if you take you know, last year, we did 530,000,000 of system wide gross sales. Right?

So on a same store basis, you know, you’re really adding, you know, somewhere between a point or two in terms of potential influential comps, right? As Sanjay mentioned, those are all a lot of those actions are just starting to come into play in the second half of the year. Right? So we haven’t really seen any of, too much of that tailwind because we haven’t made some of those larger, pricing actions. Those will go into effect in July.

So more to come on that space, but that was kind of our overall target.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: And as you’re as you’re as you’re doing this well, and, again, I I wanted to ask a bigger question on the consumer too. So this will, you know, kind of work together with that. Because I guess the first question I’ll ask more from a micro standpoint is what type of elasticity have you seen? As you’ve adjusted prices, has that impacted demand? And then the bigger picture question I have, and I think you’ve just you’ve discussed this in the past more when I’m asking for an update, is this the susceptibility of The Joint to your broader consumer, you know, broader consumer issues spending issues probably.

Sanjeev Rasdan, CEO, The Joint: Perhaps I start answering that, Jake, and you can jump in and add some more color. I think let’s start right at the top. We are finding that more and more patients are embracing chiropractic care right at the top at a secular level. Last year alone at The Joint, we brought in close to a million new patients into The Joint. A third of those patients, so almost three hundred and fifty thousand were absolutely new to chiropractic itself, the profession.

So what we’re finding is that there’s secular trends towards embracing chiropractic care, which is consistent with what you may be seeing in, you know, in popular culture, media, people talking about noninvasive healthcare options in terms of investing in modalities like chiropractic or professions like chiropractic, which are seen to be overall wellness drivers. And with trends towards anti aging, longevity, health and wellness, I think we’re benefiting from those secular trends. I think I’d start there. The second thing is, as you now kind of get into 2025, right, and say, with everything that’s happening in the marketplace and the consumer dynamic, how is that impacting us? We do think that the uncertainty in the consumer markets and the consumer dynamics is having some impact on our ability to bring in new patients in the short term.

We’re seeing some softening there And, it’s definitely having an impact. We don’t think this is a long term impact, but we certainly are seeing, the impact of that, like I said, to our ability to bring in new patients. We are not seeing a drop off of existing patients as a result of that. The patients that are already with us are continuing to stay with us at the same rate that they were previously. So there is some impact.

The average patient that comes to us have a household income of somewhere between $50,000 and $105,000 So they are in that susceptible range to chiropractic care. And therefore, there’s a degree of when they have uncertainty, new patients may run the risk of potentially, you know, delaying seeing a chiropractor till their pain becomes you know, something that has to be treated. The good news is also because most people come to us in pain, there’s only so much and no more that you will delay seeing either a doctor or a chiropractor for your pain. And invariably we find that it is relatively more inexpensive and more effective to see a chiropractor than it may be to go see your personal physician or however else people may choose to get their care. So over time, think we think that that has it is not a long term risk to us, but we’re certainly seeing some impact in the near term on new patient generation.

Jake, anything you’d add to that?

Jake Singleton, CFO, The Joint: No. I think you I think you covered the high points. You know, we are taking a, you know, a pretty conservative testing approach. Right? Making sure that the the pricing increment increments that we’re trying to push out there and especially how they fit in our pricing mix.

Right? We don’t wanna push people away from our recurring revenue products. We’re just being very mindful and and thoughtful in the way that we’re going about it before, you know, rolling it out to the wider system.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: And from a pricing standpoint, again, just, you know, as we’re talking about throughout the conversation, I mean, you are you are you are generally a low pry lower price alternative. Correct?

Sanjeev Rasdan, CEO, The Joint: That is absolutely right. I think the average adjustment at the joint is somewhere in the $20 range, or early twenties, by all means. And I think when we compare that with what our patients are paying elsewhere, so the point of comparison becomes what would they pay their local chiropractor, we’re significantly lower than that. Oftentimes we are lower than the copay that they may have for their chiropractic care And at worst, we’re equivalent to the co pay that they’re paying. So it’s a very compelling, proposition in terms of price value.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: I know our time’s gonna run down here. So I did just want to conclude, I guess this will probably be for you, Jake. Just, you know, just the capital the capital needs of the business. I mean, how how you from a maybe just talk about that. I mean, especially now with this transition going on to franchise franchise model.

Jake Singleton, CFO, The Joint: Yeah. I think, you know, I think that’s the the next great question for us. Right? If if you look at our q one financials, you know, we had 22,000,000 of cash on the books and we have no debt. Right?

So incredibly proud of the balance sheet that we have today. As we go through the franchising effort, we expect, you know, proceeds to come in from the sale of those 20 plus clinics that remain out there. So with that combined, we were able to put forth, you know, a pretty robust capital allocation strategy, had some great conversations with the board. As some may have seen on Friday, we announced $5,000,000 stock repurchase program that’ll go in place here very shortly. So, you know, continuing to make sure that we’re, you know, returning value to shareholders.

And I think it’s a signal that we have confidence in, you know, our long term growth strategies, our cash positions, and then how we’re gonna conclude these refranchising efforts. So I think we feel good about it.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: Well, gentlemen, I appreciate the time. Thank you for participating again. Congratulations on the ongoing efforts here.

Sanjeev Rasdan, CEO, The Joint: Thank you so much for having us, Brian. And, yeah. It was great to be here. Thanks. Bye now.

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