says the former employee.
The ambition to grow the business via the franchise model might
have played a key role in the company's demise, says Jay Wolfson,
DrPH, JD, a distinguished service professor of public health at the
University of South Florida.
"I think that's where some of the breakdown began to take place,"
says Dr. Wolfson. "Expenses get high. Most people didn't know that
they didn't own their own assets such as buildings, land, equipment."
Within about 10 years, the company was in Tampa, Philadelphia,
Scottsdale, Oklahoma City, Cleveland, St. Louis and Cincinnati. All that
expansion came at a massive cost, including a recruitment effort for
the best physicians, specialists and staff. To grow, the company also
needed deals for office space and equipment that added to its expens-
es.
"We went from 100 employees to 1,200 in a very short time," says
the former employee. "As the company grew, so did expectations for
continued 10% to 20% growth year over year. The pressure was monu-
mental. When you build that level of volume without having a secure
foundation, without having the right staff with right expertise, things
get really troublesome very quickly.
"It was like building the roof before you've got a floor set," adds the
former employee. "We got a little too big for our britches."
This franchise model might have worked during the good days. But
when cash flow became a problem and the money from the banks
dried up, Laser Spine had no other moves to make and no assets to
fall back on, says Dr. Wolfson.
"When you're forced into bankruptcy and receivership and there are
no assets, what do you do?" asks Dr. Wolfson. "You stop the bleeding
completely. They had no choice. They had to close down."
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