Share Tweet He Paid Too Much for His Father-in-Law’s Practice. Now What? Is there any way to renegotiate this mess? Published 3 months ago on August 30, 2021 By Natalie Taylor Invision September 2021 Issue TOM REYES MET his wife Monica Ferland in optometry school. They married as third-years, attended different rotations through fourth year, and a week before graduation they found out that Monica’s father Gerald, also an optometrist, had received a diagnosis of terminal cancer. The couple were devastated by the news and concerned for the financial future of Monica’s mother. Monica’s career path was teaching at their alma mater but Tom was eager to see patients; in the blink of an eye it was decided that Tom would purchase Gerald’s practice. ABOUT REAL DEAL Real Deal scenarios are inspired by true stories but are changed to sharpen the dilemmas involved and should not be confused with real people or places. Responses are peer-sourced opinions and are not a substitute for professional legal advice. Please contact your attorney if you have any questions about an employee or customer situation in your own business. ABOUT THE AUTHOR NATALIE TAYLOR is owner of Artisan Eyewear in Meredith, NH. She offers regional private practice consulting and ABO/COPE approved presentations. Email her at [email protected] Ferland Eyecare was over 30 years old and Gerald had never taken on a partner or associate. Tom felt it was his duty as a newly minted husband and doctor to pay the full value of the practice, so Gerald hired a firm to come up with the final number. There was no possibility of a down payment, but both parties were comfortable with Tom writing a monthly check to Mrs. Ferland over the next 10 years. The Sunday after the paperwork had been signed, Tom invited two close optometry school friends over to see his new practice and share a bottle of champagne. “Boy, Monica’s dad didn’t do much in the way of updates the last 20 years, huh?” said Steve. “Yeah, this wallpaper and carpet are pretty worn,” agreed Tom. “I need to update the street signage too.” Advertisement “Yeesh!” exclaimed Evan. “These frames are really dated.” Evan had worked as an optician through school; Tom was relying on his input since that part of the business was largely foreign to him. “We counted about a thousand frames during the inventory, but only about 100 were purchased in the last two years,” said Tom. “They had a buying freeze thru COVID.” “You know that means you’re selling frames without warranties,” Evan said. Tom gave a quick nod, but that fact actually hadn’t occurred to him. “Can we see the exam rooms?” asked Steve. “Room,” corrected Tom. “Oh, nope. Nope,” Steve said, “You need two rooms, man. Maybe three.” The trio spent the next hour mapping out options for reformatting the office walls and layout. The friends were just leaving as Monica arrived, and the couple sat together in her father’s old office. Tom tried sharing the feedback from his friends, but her attention was divided; ever since the diagnosis Monica was constantly fielding calls and texts from family, her parents and her father’s medical team. “…going to take a lot of work. Monica?” Tom tapped her phone screen, breaking her gaze. Advertisement “I’m listening!” she said. “What are you saying, though?” “I think the practice was overvalued,” he sighed. “We’re going to need to put serious money into updates. I know time was a huge factor in getting the sale situated, but I think I overpaid… by a lot. Can we revisit the agreement?” Monica looked at him, aghast. “Tom. My father is dying.” Her eyes started to well up. “It was so painful for him to sell and now you want to pull the agreement apart?!” “No, no,” Tom said gently, embracing his wife. “I’m sorry.” The Big Questions What responsibility, if any, does the firm that initially valued the practice have in relation to Tom’s belief that the practice was overvalued? If you were Tom, would you continue attempts to renegotiate the agreement? Why or why not? Given that the practice is now Tom’s and changes need to be made immediately, what should he prioritize: frames, exam rooms, façade or something else? Why? Sarah B. Harrison, MI In this hypothetical situation, Tom is an idiot. This is 100% his fault. Who chose the person who “valued” the practice? Tom’s fault for doing no research. Once a contract has been signed, there’s not much he can do unless he wants to initiate a legal battle against the seller/family. Also, Tom and his colleagues sound very closed minded about the situation. There’s no problem with getting the business going with some outdated aesthetics. Start making some money, Tom, and worry about remodels later. Sheldon K. Lauderhill, FL This is a case where the money is staying in the family, going from one pocket into another. If the practice can support a reasonable income for a doctor while making payments to his mother-in-law, all is good. If the income cannot support the payout plus the finance charges for updated equipment, frames and leasehold improvements… the onus is on his wife to step in and resolve the situation. This bad deal is coming out of her pocket as well. The mother-in-law needs to realize that if he defaults, she may wind up with an unsellable practice and a single daughter. A strong incentive to renegotiate. Advertisement John M. Houston, Texas Tom should realize what is done is done and now turn to an outside management company to build for him a business plan that will make the necessary changes (if any). He bought a business. He may have overpaid, but it is a business and he now has an opportunity to turn it into a good investment. Tom should also understand that not only did he buy a practice, but he invested in his new family. At least he knows his overpayment is going to the family. Barbara M. Venice, CA The initial evaluator is a loser and you cannot do anything about the money spent on his poor work. Get over that and move on. I would put the business on the market with the deal that you have first refusal. Then you will find out what it’s worth. Let the mother-in-law know the value and let her sell it for that amount, or your monthly payments to her would be based on this new amount. Start by reorganizing the space, utilizing a young, clever designer who is local. Throw an opening event; give away fun small gifts. Invite all the local stores. What’s the Brain Squad? If you’re the owner or top manager of a U.S. eyecare business serving the public, you’re invited to join the INVISION Brain Squad. By taking one five-minute quiz a month, you can get a free t-shirt, be featured prominently in this magazine, and make your voice heard on key issues affecting eyecare professionals. Good deal, right? Sign up here. Related Topics:Featured click to Comment(Comment) Up Next State-Mandated Vaccinations Are Raising Unexpected Questions for This Practice Don't Miss For One Practice Owner, a Broken Marriage Means a Broken IT Systems Contract — and This Very Serious HIPAA Headache Natalie Taylor Natalie Taylor is an experienced optometry practice manager for Advanced Care Vision Network and a consultant with Taylor Vision. Learn more at tayloreye.com. SPONSORED VIDEO Shamir Glacier Plus Metaform: Stronger. Thinner. Lighter. It’s time for a new compromise-free lens technology that completely changes our concept of what's possible. Glacier Plus™ Metaform enables customers to enjoy strength and safety alongside the aesthetics of thin and light lenses. Now Available: The next technical revolution in the world of optics. You may like Optical Staff Have a Suspected Shoplifter on Their Hands. What Should They Do? State-Mandated Vaccinations Are Raising Unexpected Questions for This Practice For One Practice Owner, a Broken Marriage Means a Broken IT Systems Contract — and This Very Serious HIPAA Headache Promoted Headlines Recommend a Simple Solution for Your Patients’ Daily Dry Eye Challenges Alcon See What’s Possible with EssilorLuxottica 360 EssilorLuxottica Shamir Glacier Plus Metaform: Stronger. Thinner. Lighter. Shamir Lens Advertisement Latest Trending Videos Press Releases9 hours ago VSP Global Premier Program Partners with Optify Tools and Equipment17 hours ago Stumped on Holiday Gifts for Your Eye Loving Loved Ones? We Got You Covered! The Big survey18 hours ago Big Survey: Most ECPs Still Expect to be Working Past 65 Press Releases1 day ago Thomas Eye Group Announces Acquisition of Georgia Optometry Group Press Releases1 day ago SCSU, Eye-Kraft and Sand Celebrate DEED Workforce Grant Signing Photo Gallery2 weeks ago 16 Painfully Relatable Memes About Working Holiday Retail Sponsored Content2 weeks ago Shamir Glacier Plus Metaform: Stronger. Thinner. Lighter. Photo Gallery1 week ago 12 Images That Show Why Spectrum Eye Care in Hamilton, ON, Was Named One of (North) America’s Finest Optical Retailers Headlines4 weeks ago FDA Approves VR Headset for Amblyopia Treatment Headlines3 weeks ago Warby Parker Will Soon Have 161 Stores Sponsored Content2 weeks ago See What’s Possible with EssilorLuxottica 360 INVISION Podcast2 months ago INVISION Podcast New Season: Dee Talks With Dr. Diana Canto-Sims on the Challenges of Serving the Nation’s Largest Ethnic and Racial Minority Press Releases2 months ago Global Vision Campaign Seeks to Achieve 1M Vision Screenings and Eye Exams for World Sight Day Sponsored Content3 months ago Introducing the VariluxⓇ Challenge Press Releases4 months ago Sun Pharma Launches 4th ‘Dry Eye Gets Personal’ Video Campaign Advertisement SubscribeBULLETINS Get the most important news and business ideas for eyecare professionals every weekday from INVISION. Advertisement Most Popular Photo Gallery1 week ago 12 Images That Show Why Spectrum Eye Care in Hamilton, ON, Was Named One of (North) America’s Finest Optical Retailers The Big survey3 days ago So Overrated! ECPs Tell Us the Top 10 Things About The Profession That Don’t Deserve the Hype The Big survey1 week ago For ECPs, Vaccination Status is Still a Pain Point Sponsored Content4 days ago Recommend a Simple Solution for Your Patients’ Daily Dry Eye Challenges The Big survey1 week ago ECPs Offer Predictions for the ‘Next Big Thing’ in Optical Products Headlines2 days ago New Look Vision Acquires Luxury Optical Holdings Headlines1 week ago Distance Education Doctor of Optometry Program Planned as NECO Partners with Noodle Tools and Equipment17 hours ago Stumped on Holiday Gifts for Your Eye Loving Loved Ones? We Got You Covered!