Freedom Dental Partners has positioned itself as a stand-out competitor in the DSO field by providing unique options for dentists looking to join an organization.
The Montclair, N.J.-based company recently announced that it has generated more than $44 million in wealth for dentists so far in 2024 after closing on 13 deals in Ohio, Virginia, Massachusetts, California and Wisconsin.
After being founded in March 2022, Freedom Dental Partners has grown to support more than 250 dental practices in 42 states.
Founder and CEO Avi Weisfogel recently spoke with Becker's to discuss the DSO's growth, future goals and operating model.
Editor's note: Responses were lightly edited for length and clarity.
Question: How would you describe Freedom Dental Partners' growth this year? What are you most proud of?
Avi Weisfogel: The growth has been truly incredible. This company started in 2022 and we've worked with about 350 practices, some of which we've helped find exits with other DSOs, but that's a small part of what we do ... This has been my message since I started to really understand the DSO space. Why sell to a DSO when you can become the DSO? We see these deals happening all the time, and when these deals happen and private equity comes in, dentists make a smidge, the corporate people make a ton, and that's how that typically goes. So if the dentist makes, let's say, slightly more than they were going to make by selling, they feel good about it, but in the end, what they really could be making is astronomical. So we've started putting together what we'll call a dental partnership platform. We put a bunch of dentists together. We partner them together, we form a full on structure, and that structure then acts like its own DSO. That structure stays open for as long as needed to acquire more practices, just like any other platform would, and eventually goes out to the market. These platforms [typically] have, let's call it $10 million-$12 million of EBITDA to start. The one we did called Rising Tides has nearly $11 million of EBITDA, and now they're working together as one structure. It's really neat.
You see such camaraderie and friendship born out of these. I graduated from dental school in 1998. I practiced until 2014, and I always thought dentistry was kind of a lonely profession, everybody just kind of out for themselves. This changes the game. You get friends, you're going at this with people, you're strategizing and you're all out looking for the betterment of your structure together, rather than just the "me." We talk about that "me" to "we" shift all the time.
We're about to launch three more platforms, one in the Midwest, one in Texas and one in California. This is what we love to do, this DPP model, and dentists are absolutely loving it because they're really given that opportunity and chance to become their own DSO, to be part of making decisions and not just, "Hey, I'm going to sell to a DSO, and their rules become my rules."
Q: Freedom Dental Partners recently announced that it has generated more than $44 million in wealth for dentists so far in 2024. How did the company achieve that?
AW: DSOs tend to look at dentists as dentists. There's some amazing entrepreneurial minds out there. I don't just want a dentist. If there's a guy who's an entrepreneur, by all means, bring that entrepreneurial spirit here. So between finding really amazing deals on practices and real estate and then turning those into deals, that's how we're creating wealth. So somebody may own a practice, and that practice goes into one of our platforms, but alongside working with us, we may help them find another four or five practices with real estate attached where, for the most part, the real estate becomes a very quick flip for them where they can actually sell the real estate, sometimes even the day of. We'll find a deal with a practice and a building attached to it, and on the very day we close on that practice, we've already sold the building to somebody else for a hefty profit. Again, dentists [are] making significant profit on these deals. So when we look at the total wealth creation there, I think we're very creative with it.
I don't really see many other DSOs offering these opportunities because I really do think DSOs want dentists to be dentists, and we want them to be whoever they are. So if you just want to be a dentist, by all means, put your practice on a platform and go ahead and just do dentistry, but if you want to grow, it's so much easier to grow as part of a platform than it is solo. When I was a dentist and I first started getting financed, it was easy. Then the mortgage crisis happened, banks became tighter, and you weren't just able to borrow money by a phone call ... Now there's a lot that goes into loans, and so dentists can't just borrow to buy practices, however, platforms typically can. So you get the ability to grow, not just yourself, but you're growing your structure. We don't really ask dentists to sell their practice to a DSO. We ask them to trade the equity in their company for equity in the DSO platform.
Q: What sets Freedom Dental Partners apart from competitors?
AW: We have multiple options for you. Some people come in through Freedom and say, "Listen, I don't really want to hang out for that long. I'd rather just find the right deal for me," and we also have people who could never sell their practice to a DSO because their practices are not good enough. We can work with them a little bit to get them into one of our platforms, or we have people in the Freedom network, other dentists who will partner with these guys and say, "Hey, let's work together on this. Let's build this up together, and then we'll have options." So we have more options than anyone out there, and it's probably why we grew as fast as we did.
Q: What other priorities or goals do you have for the rest of 2024?
AW: The DSO market is obviously there, and it's a big deal, but we also believe there comes some times where the model needs a shift ... [the DSO market is] run by business people, and dentists are just typically dentists who are doing the dual job of running the business and being the dentist. The majority spend 95-98% of the time as the dentist, so 5% as the business person. We really see that as a tougher spot to compete, so we're allowing these guys to compete. We're saying, come on in. We can all do this together.
We do have partners we work with over at Aligned Dental Partners, they're great people. We work with them on some of these platforms as well. We feel exactly the same. Let's help dentists become what they really could be here. Somebody is going to end up making a lot of money on most of these dental practices. Our view is the dentist should be the one making it.
I have more respect for dentists and how they make money than anything because I know how hard it was. It's a stressful job, and while some people may love doing dentistry, the business is still difficult and it's shifting ... We think we have great answers for most people. We can't help everyone, but in the end, we could do things to at least improve your business. We tend to get creative and find ways for people to help. So for example, if someone comes to us and they have a million dollar practice and a DSO doesn't want them, we're probably going to help them buy two more $1 million practices where every DSO would want them. But in the end, our goal is to get them to one of our platforms and let them really experience the growth.