7 Small Franchises That Are Growing Fast

1. Medi-Weightloss Clinics
Headquarters: Tampa, Fla.
Locations: 92 through May 31, with 100 expected by the end of the year.
Obesity in the U.S. states is growing at an alarming rate. According to the CDC's National Center for Health Statistics, approximately one-third of U.S. adults are obese.

The trend may be alarming, but it provides ample opportunity for businesses with programs and services that can help consumers lose the weight. Consumers spend roughly $150 billion on weight loss products and services every year.

Medi-Weightloss Clinics is a physician-supervised weight-loss program expanding nationwide. Whereas such companies as Weight Watchers(WTW) and Jenny Craig play up the role of their food products in weight loss, Medi-Weightloss Clinics touts its "90% program/10% supplement" model, according to Andrew Cox, the company's senior vice president of business development.

Under a physician's care, patients are given a full health consultation, program outline and weekly lessons on behavioral change. The process also includes weekly injections of an appetite suppressant and vitamin energy boost.

"We're teaching them in today's fast-paced environment what to eat and how to eat and portion control on a real food diet," Cox says.

From a business standpoint, the model is attractive to physicians -- the program does not take insurance, and revenue streams have dwindled at physicians' offices hardest hit by HMO acceptance.

"The cost of running a practice is high, and malpractice has skyrocketed," Cox says. That leads some physicians to seek ways to add non-insurance based services.

"We market [our franchises] primarily to physicians," mainly OB/GYNs, he says. "Any subspecialty that has a significant patient base." (Owners that are not physicians need to partner with one.)

Medi-Weightloss Clinics' franchises are already in 22 states, Cox says.

The initial buy-in is $178,500, of which $53,500 comes back in medical capital equipment and ancillary supplies and marketing. Cox says the total investment is roughly $350,000, including working capital, center build-out and furniture and fixtures. Average annual revenue at a clinic is about $800,000.

"The return on investment is very attractive," Cox says. "It's a very strong cash business."

For the clinics to be successful, educated and experienced staff is important, but success also relies on how well the parent company can support its franchisees, which includes strong IT systems, Cox says.

"We've been very successful with Medi-Weightloss because we have a very sound protocol [allowing us to be in] some areas that we didn't think we'd be in," he adds.