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Franchise entrepreneur Jim Abrams made his mark locally in the home services field, where he built a $200 million company in 10 years.
But that triumph could be scrawny compared to Abrams' next franchise venture: physical therapy.
The plan, says Abrams, is to build a nationwide network of physical therapy centers under one brand, Fyzical, that can grow — quickly and in large scale — through franchising. Fyzical is a unit of Sarasota-based BizZoom, a private-equity firm Abrams founded in 2012.
Abrams previously ran Clockwork Home Services, which grew into one of the largest privately owned firms in Sarasota-Bradenton under his leadership, with $215 million in annual sales at its peak in 2008. Toronto-based Direct Energy bought Clockwork in July 2010 for $183 million.
Abrams, like Clockwork and several career stops before that, is once again all about supersized goals when it comes to Fyzical. “I'm really excited about this idea,” says Abrams. “I think this could be the biggest business I've ever done. I have some very ambitious plans.”
That plan starts with Florida, where Abrams hopes to have 50 Fyzical franchise locations open and running in the state by mid-2014. He further intends to have 1,000 franchises within a decade, when he projects Fyzical will hold a 10% market share of the nationwide physical therapy industry. That kind of growth, says Abrams, would give Fyzical a $3.2 billion grip on what's currently a $32 billion industry.
“It sounds like a lot,” says Abrams, the Business Observer's 2008 Entrepreneur of the Year for leading the growth at Clockwork, “but that's only two (locations) a week.”
Abrams' ambitions go even deeper than the mere Fyzical side of the operation. He also seeks to build a corporate headquarters and campus for Fyzical clients and their families, akin to a Canyon Ranch-like tourist destination.
That project could cost $10 million to $15 million, Abrams says — an investment that doesn't include the $1.7 million BizZoom has already staked on Fyzical. The campus, says Abrams would include a spa; a holistic health center; a physical therapy floor; a nutritional restaurant; and a fitness center that focuses on full-body exercise, not only muscle building.
The project is only in the conceptual stages, but Abrams is serious enough that he's already scouted for land in one of three places: downtown Sarasota, Lakewood Ranch and Venice.
Abrams even tried to move forward on the campus and headquarters project in another way late last year, when he considered buying Warm Mineral Springs in North Port. A popular tourist destination that had more than 120,000 visitors last year, the springs, in south Sarasota County, are jointly owned by the city of North Port and the county. But the governments are in a dispute over the future of the property, and Abrams couldn't make much headway in preliminary negotiations.
Overall, the Fyzical plans are certainly grand. But Abrams has proven several times over he can build big brands quickly, from the weight loss industry to mutual funds.
“Jim has a unique ability to look at a business from a long-term standpoint,” says Terry Nicholson, an executive at Clockwork who joined Abrams at Fyzical. “He has always been a visionary.”
Healing path
The drive behind Abrams' big goals with Fyzical is mostly based on market need and the fast-growing baby boomer demographic projections. But there's also a personal experience side.
Abrams had some pain in his right knee in 2005, when he was 58 years old. One doctor recommended Abrams have surgery on the knee, and possibly his hip.
But another doctor suggested physical therapy, which Abrams says he knew little about. What Abrams did know was the pain was so bad he had trouble sleeping, and his son had to drive him everywhere. Abrams also gave up swimming in Siesta Key waters, long a favorite activity.
A physical therapist ultimately put Abrams on the path to healing, an experience that stayed in the front of his mind. “The future,” says Abrams, now 66, “is people will go to physical therapy before they go to surgery. It's all about getting information (first.)”
Abrams also discovered the nationwide physical therapy industry is competitive, yet fragmented. A report from market research firm IBISWorld says there are more than 90,000 physical therapy businesses in the country and the industry, on average, has grown 4.5% a year since 2008. That growth rate is expected to continue at least through 2016.
The reasons for the national growth projections are clear — though so too are the threats.
“Industry growth will continue to be boosted by the aging population of baby boomers, as health conditions result in greater demand for physical therapy,” the IBISWorld report states. “Health care reform will give more individuals access to insurance coverage, resulting in increased demand for industry services. However, the threat of Medicare caps and reduced reimbursement rates will place pressure on profit margins.”
At least one other company besides Fyzical sees opportunity in a national growth strategy. That firm, Houston-based U.S. Physical Therapy, operates more than 400 clinics in 42 states, including 14 in Florida. It has Gulf Coast locations in Clearwater, Englewood and Largo.
U.S. Physical Therapy, publicly traded, has grown steadily over the last four years, from $201.4 million in 2009 revenues to $244.4 million last year. Still, Abrams points out even a company like that, which is big for the industry, barely hits 1% of total market share.
Abrams, moreover, says he's well versed in the industry's competitive forces and Medicare-infused regulatory challenges, and he isn't scared. “I learned a long time ago that you don't create customers,” says Abrams. “You simply gain your share of customers.”
Full circle
The strategy to gain those customers at Fyzical will look a little like Clockwork.
That's because Abrams believes, just like he did in home services in the early stages of Clockwork, that there's a lack of top-of-mind awareness in the physical therapy industry. Says Abrams: “There are huge opportunities for consumer-branded marketing.”
Clockwork, for example, brought catchy jingles and marketing slogans to the plumbing, electrical and air-conditioning industries. The company even appeared on an episode of “The Apprentice,” the NBC business-reality TV show, in May 2010.
Nicholson points out, however, that Clockwork also worked because the company meticulously trained franchisees on a set of business principles, from customer service to monitoring expenses. “We weren't going to be able to tell them a better way to fix a water heater,” says Nicholson, “but we could show them how to run a business.”
That's the goal with Fyzical. Abrams and his team seek to convert existing physical therapy centers, where they can teach the Fyzical business operations way. That covers topics such as recruiting and meeting payroll — things that aren't normally taught in college physical therapy programs. One Fyzical location opened recently, a converted traditional center near Doctors Hospital of Sarasota, and a second local location is pending.
The crux of the Fyzical physical approach, the company says, is to combine medical- and science-based therapy and fitness. The centers, say Fyzical marketing documents, will have more than 40 pieces of state-of-the-art physical therapy equipment. Fyzical also has underwater treadmills and heated therapy pools to “take the pain out of recovery.”
The son of a World War II veteran, Abrams says he never expected to get into the physical therapy industry. Yet it's somewhat of a full circle move for Abrams, a Detroit native, considering his first large-scale franchise venture was another health industry business: Weight Watchers. That was in the mid-1970s, when, from southeast Michigan, Abrams ran a Weight Watchers franchise operation that grew to other states, Canada and Mexico.
Abrams' other major franchise success, before Clockwork, was with The Mutual Fund Store, now one of the largest investment adviser firms in the country. His post-Clockwork business ventures, before Fyzical, include a downtown Sarasota restaurant, Duval's New World Cafe, and commercial real estate.
But Abrams is confident Fyzical will be his next great company. “I can't think of a business I've been more excited about,” says Abrams, “going back to Weight Watchers.”
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