Highlights

Apollo Clinic could be a great opportunity for you to be a part of a bold and historic chapter in Indian healthcare. As you will realize, the project is an extremely attractive investment proposition. Apollo Clinic will have consultation services like General Medicine, Gynaecology, Paediatrics and Cardiology through a team of full-time physicians and visiting consultants available for General Surgery, Dentistry, Gastroenterology, Urology, Dermatology, and Orthopedics along with counselling services in areas like Diet and Nutrition along with Hospital Information Centre and lab being operated by AHLL

Project Cost

Each Apollo Clinic has an area requirement of 4000 sq. ft. carpet space and a Project Cost of Rs 2.5 – 2.75 Cr. The Project cost includes investment in Medical Equipment, Interiors and Furniture, Civil Modification, Air Conditioning, Electrical , Information technology (Hardware and Software), Lease Deposit ( if the premises are taken on rent), Preliminary and Pre-operative expenses, Working Capital Margin, Contingency Funds and License Fees to Apollo. The project is ideally funded on a 1:1 Debt Equity ratio. The debt has been taken for a period of Four years with a one-year moratorium on principal payment. Adequate amounts have been budgeted for infusion of fresh capital into the project over a period of Five years, for which duration the projections have been made. Apollo Health and Lifestyle has also tied up with State Bank of India (rate of interest 12%-15%) for project funding.

 

Q. What are the revenue streams in a Clinic? And what is the overall profitability?

 

The Clinic will derive its income broadly from the following services: Consultation including counseling services Diagnostic Services Preventive Health Check Programs Dental Services Treatment room Others (Telemedicine, doctor @home, referrals etc) The Clinic is expected to generate revenue through all of the above sources. It is also expected that there will be a large degree of cross-referrals between various revenue generating streams. In the first year of operation, the Clinic in India can expect to generate between Rs. 15 million to Rs. 20 million, depending upon the facilities that are provided.

Q. What does Apollo Health and Lifestyle Limited charge as fees?

 

AHLL charges an ‘Initial License Fee’ at the time of signing the Agreement . This license is valid for a period of Five (5) years, which is the tenure of the License Agreement. As royalty fee, AHLL will charge a percentage of the gross
turnover of the clinic , which will be payable on a monthly basis.

Q. Will AHLL or AHEL make investment (even a token amount) in these Clinics?

Since the chain of Apollo Clinic is being set up on a franchise basis, the franchisee will be responsible for the entire investment. Where requested, AHLL will assist the franchisee in arranging term loan from a bank. However, neither AHEL nor AHLL will not make any investment in the clinic. It will also not give any guarantee to the lender.

Q. What will be the relationship between existing Apollo hospitals, Apollo Clinic?

While every Apollo Clinic will be an independent entity, both the entities will benefit from the common brand building and similar exercises. Also, the Clinic can benefit from being able to refer customers for high end diagnostics as well as tertiary or in-patient care to the Apollo Hospitals. At the same time, the Clinic will gain from referral income while retaining the customer. The goodwill of all these facilities shall automatically come to you through Apollo brand name. Specific association with any or all of these entities, shall be based on local market conditions and business needs.

Q. If an Apollo clinic is set up in a city where a full-fledged Apollo hospital already exists, will it not mean unnecessary competition within the same organization?

Apollo Clinic shall focus on primary healthcare. We do not perceive any competition from the existing Apollo facilities which are mostly secondary and tertiary care facilities. Secondly, no two Apollo facilities would be operating in the same territory as any other Apollo facility. In fact, such facilities would create synergy in terms of referrals.

Q. What will be the name of the Clinic? Can the name be altered or modified?

Every clinic will be called “Apollo Clinic”. No deviations are allowed. The name and signage has been standardized and no deviation, beyond AHLL’s stated guidelines, will be permissible.

Q. What is the growth plan for the Clinic? Can I ever own an Apollo franchised hospital?

Currently our focus is on primary healthcare as it is an area with tremendous unexplored and unutilized potential. The growth of clinics is envisaged in terms of geographical expansion or/ and sub-franchising as also through introduction of additional facilities like CT Scan, dentistry etc. However, we cannot rule out the possibility of setting up hospitals at a later stage with the Apollo Group.

Q. How are the physicians going to be associated with the Clinic?

The Clinic will have a Consultant General Medicine, Pediatrician, Gynecologist and a Cardiologist. These physicians will form the core team, but besides the Consultant General Medicine, all other specialty doctor will not normally be on the full time rolls of the Clinic. Apart from them, the Clinic will have a group of visiting consultants from various disciplines like General Surgery, Orthopedics, Endocrinology, Urology etc. The Clinic will also have a Radiologist and a Pathologist on its full time roll. The hours of employment may however be decided based on the local conditions. The Consultant General Medicine will take care of the preventive Health Checks programs too. All other doctors will be consultants.

Q. How would doctors and technical staff be recruited? What will be AHLL role in this?

The method of employment of doctors would vary from city to city. AHLL will assess the financial implications on the business and recommend full time employment, revenue sharing based association or any other method that is considered appropriate. Good technical staff is adequately available in the market. AHLL shall help in recruiting such all key staff by designing advertisements, conducting interviews, and short listing.

Q. What would be the profile of a typical Clinic Manager?

The professional manager should preferably be an MHA with excellent managerial skills, marketing acumen and a flair for customer relationship management. He would have about 7-8 years of work experience, preferably in a primary healthcare facility. Doctors in administration may also fit the profile.

Q. How many people do I need to employ to run the Clinic operations?

Typically staffing requirements in India vary between 20 to 25. Actual staffing could vary depending on a number of variables including the number of facilities set up and the number of floors occupied by the Clinic.

Q. Are the locations for opening an Apollo clinic restricted? Can the clinics be set up anywhere in India or abroad?

AHLL has prioritized certain cities based on Market Surveys conducted for the establishment of new clinics. Some of these cities are being considered for implementation in the first phase itself. Other cities shall be covered in the second and third phase.

Q. What are preventive health-checks and how important are they?

Preventive health-checks are checks performed on individuals to determine the stat of their health by carrying out a series of diagnostic tests. Preventive healthcare is catching up in bigger towns and cities. There is already a lot of corporate business in this area. We intend to popularize the maxim of “Prevention is better than cure” through our marketing programs. Very soon, with the entry of private insurance companies, preventive health checks will become a norm. Insurance companies would certainly prefer paying for pre-insurance health checks than settling large hospitalization bills. Secondly, while allotting an insurance policy to anybody, insurance companies would rather have an institution like Apollo certifying the health of a prospective customer as against an individual.

Q What is the basic concept behind setting up Apollo Clinic?

It isn't very often that a member in a typical Indian family requires hospitalization. More often than not, someone in the
household needs to visit a physician, who prescribes certain diagnostic tests at times and some medicines most of
the times. The basic concept behind setting up Apollo Clinic is to be able to address all such needs in a
comprehensive manner. The Clinic will essentially have three key components: Consultation Services,
Comprehensive Diagnostic Services and also Round the Clock Pharmacy - all under one roof. In addition, Apollo
Clinic also places a lot of emphasis on preventive health checks.

Q What does setting up a Clinic on a Franchisee basis entail?

Franchising, today is one of the most common business models which has been adopted by some of the most well known
brands. In the US, more than 65% of the service industry revenue is achieved through 'franchised' outlets.
Even in India, it has had significant success with established companies like NIIT, Aptech, SSI, Archies, VLCC,
Shahnaz Husain, Lakme etc. A franchisor supports the entrepreneur (the franchisee) with its brand name and also through
vast industry/business knowledge. As a result, a typical entrepreneur has best of both the worlds, the satisfaction of
running his own business and the support of a well-known large organization.
Setting up a clinic on a franchisee basis requires entering into an arrangement with Apollo Health and Lifestyle
Limited as the Franchisor. AHLL will provide the technical know-how and the franchisee will operate the business.

Q Who is an ideal franchisee for setting up the Clinic?

Consistently superior quality of services is the cornerstone to ensuring success of the Clinic. AHLL therefore selects
each franchisee with utmost care. A proper due diligence is carried out before finalizing a franchisee.
An ideal franchisee will have the following characteristics:
- He will have a prior track record of running a successful business venture.
- He should be able to devote full time or a significant amount of his time to the clinic.
- He will have a social standing, enjoy good reputation and exhibit integrity.
- He will be genuinely interested in the healthcare sector.
- He will strictly abide by the guidelines given by AHLL.
- Individuals looking purely for quick returns or productive utilization of their idle space or building are not necessarily the right candidates and are likely to be discouraged.

Q What are the formalities involved in selection of a Franchisee for 'Apollo Clinic'?

Depending upon your conviction about the project and AHLL's assessment about your ability to successfully take it
forward, a MOU would be signed between AHLL and your group. At this point, you would need to pay License fee.
This would be followed by a Due Diligence conducted by AHLL to assess your financial capabilities. You would also
need to form a Private Limited company to establish and operate 'Apollo Clinic'. Once this process has been
completed, AHLL will sign a License agreement with your company to officially nominate you as a Franchisee for
'Apollo Clinic'

Q The best brand in healthcare. A workable business model. A good location. Success is guaranteed, right?

Wrong. The most important ingredient for success is the franchisee himself. His managerial ability, interest in
healthcare and extent of personal involvement in the business determines the success of 'Apollo Clinic'. Which is
why, as in all franchise businesses, we have extraordinary performers, average performers and non-performers.

Q How long would it take to start operations from the time of signing the Franchisee Agreement?

The time taken from signing the Agreement to commencing operations depends to a large extent on a few critical
factors like, the selection of a suitable site, tying up the finances and completing licensing requirements. Also, the
time required for constructing ground up clinics is typically longer than that required for establishing clinics in existing
buildings. We have in the past opened a Clinic within sixty days from commencing work. If there are no major issues,
it is easily possible to commence operations within a time frame of 8-10 months from the date of agreement.

Q Can I form a partnership venture with other business partners for taking Clinic franchisee?

You can decide to partner with anyone else for taking the Clinic franchisee. However, AHLL will assess each person
individually before signing the agreement. It is also to be noted that the Franchisee Agreement is signed with a limited
liability company only. Change in partners/shareholders after the signing of the agreement is restricted by the terms
of the agreement.

Q Can a franchisee only be an investor? If I put up funds and agree to a different sharing pattern, is AHLL willing to manage the business? Else, can I appoint a professional manager to run the business?

No

Q What is required in order to set up a Clinic?

The Clinic will require an area of about 4,000 sqft at ground floor level and should preferably be close to a large
residential area. The area will vary according to the number of specializations being planned.
It is envisaged that the Clinic will be on leased/rented premises. However, franchisees may also consider
constructing a separate building, or purchasing existing buildings.

Q How is Apollo Clinic different from similar establishments run by doctors in my neighbourhood?

You can feel the difference between Apollo Clinic and other similar establishments right from the moment you enter
the clinic. The ambience is designed to provide an experience which is most comforting to the customers. Our clinical
as well as non-clinical procedures have been developed after research by a team of specialists from within the Apollo
Hospitals Group. Consultants are selected for the Clinic after being interviewed by a panel of doctors from the Apollo
Group. In addition to all of this, Apollo Clinic can enhance its business through referral arrangements with Apollo
Hospitals throughout the country.

Q What are the medical equipment that the Clinic uses to provide diagnostic services?

Given below is an indicative description of the medical equipment in the Clinic:
Laboratory: Bio Chemistry (auto analyzer), Hematology (Cell counter) and Microbiology
Radiology: X-ray, Ultrasound
Cardiology: ECG, Colour Doppler and Treadmill
Pulmonology: Spirometry
Dentistry
In addition, the Clinic has a Treatment Room which provides simple services like dressing, suturing etc. It is however
not equipped to provide any emergency services.

Q Can the Clinic provide for high-end equipment, for e.g. a CT Scan?

The 'base' model of the Clinic does not contain any high-end equipment. However, depending on the local needsupply
gap and the availability of adequate space, we have included other facilities in a number of Apollo clinics.
Some of the equipment or services that can be considered include CT Scan, Endoscopy Services and etc.

Q What are the value added services that Apollo Clinic provides?

The Clinic also offers tele-medicine facilities. These are for use not only by the consultants practicing in the Clinic, but
also by other physicians as well. While its acceptance is likely to be gradual, we expect such a facility to give the
Clinic a competitive edge.
Apollo Clinic also provides interface with other Apollo Hospital group entities to enhance resource utilization. The
Clinic also offers a number of health check packages. In addition, a number of camps have been developed for
implementation at the Clinic, with well-established protocols along with Hospital Information Centre.

Q What is telemedicine? How does it help the Clinic?

Telemedicine provides the Clinic access to specialists and super-specialists who are located at different parts of the
world. This is done using audio-visual devices that connect consultants in one facility (in this case the Clinic) with
specialists and super-specialists in another facility. Doctors and customers in the Clinic have the option of consulting
these specialists and super-specialists online without incurring the cost of travel, and within a short span of time. The
end result is an expert opinion from a specialist with much less cost. The Clinic benefits by providing additional valueadded
services to its customers at minimal costs. Currently, the network is extended to consultation with Apollo
facilities at Delhi, Chennai, Hyderabad, Kolkata and Ahmedabad.

Q What does Apollo Health and Lifestyle Limited do for the franchisee?

The relationship between Apollo Health and Lifestyle Limited and the franchisee is modeled on best international
franchising systems. As the franchisor, AHLL will provide all support for setting up and later running the Clinic.
The overall scale of operations will ensure that the franchisee enjoys excellent cost competitiveness - both during
implementation stage and later during operations.
Given below is a brief description of AHLL's support services to be provided to be franchisee:
- Site selection Do's & Dont's
This is first step of project development, and is the most crucial element of Clinic setup and utmost care should be
exercised in choosing the right place for the Clinic. A set of Do's and Don'ts to be kept in mind while looking for a
suitable site for the Clinic
- Architecture & Interior Design
AHLL has developed a comprehensive manual incorporating all possible design features to take care of all types of
sites (of any size, shape, location, etc).However Based on the manual, AHLL's in-house design team prepares the
layout plan for each Clinic.
- Project Execution including Appointment of Contractor
Standardized construction (flooring)/ engineering (air conditioning, electrical, sanitary fixtures etc) materials are
negotiated with leading suppliers/ manufacturers to get the most competitive pricing.
- Project Financing
Based on a study of the local need-supply scenario, AHLL will assist in preparing a Project Report and also assist the
franchisee in mobilizing financial resources (in the form of debt), where specifically requested by the franchisee.
- Selection and Procurement of Medical Equipment
The franchisee is provided with the list of recommended medical equipment from AHLL. These equipment have been
selected after exhaustive negotiations with leading suppliers and have the best configuration and prices. The
franchisee need not reinvent the procurement process. The equipment package includes adequate warranty and after
sales service features.
- Selection and Training of Personnel
AHLL has a highly structured system for selection and training of medical, para-medical and other
administrative/support personnel in a Clinic. AHLL is also directly involved in -
- Screening of key positions in the Clinic,
and a panel from Apollo Hospitals is involved in conducting interviews for all key positions in the Clinic.
A 10 day training session is conducted by the Apollo team, for the administrative and technical staff at the Clinic.
Refresher training and upgrades are provided to the employees on a periodic basis.
- Clinic Management Software
AHLL has an exclusive basis, Clinic Management Software. This comprehensive software address all medical and
non-medical functions of the Clinic. The software is implemented by AHLL/IT partners , and the Clinic staff will also
be trained by AHLL/IT partners .
- Local sales support
AHLL's marketing executives will train the franchisee's sales personnel in sales and promotion of the Clinic. They are
actively involved in developing product and pricing strategy and also the pre-launch activities.
- On-going Service Quality Training & Monitoring
AHLL will carry out periodic medical and service quality audits of the Clinic function, which help in maintaining and
improving service quality standards of the Clinic. This includes regular clinical and non-clinical audits, developing
standard operating procedures and checklists, and assistance in implementing service quality. AHLL also sets and
monitors monthly revenue targets for the clinics.

Q What all locations are available for franchisee?

- Andhra Pradesh
Guntur, Kurnool, Rajahmundry and Vijayawada
- Telangana
Nizamabad and Warangal
- West Bengal
Kolkata: Badabazar, Howrah and Shakespeare Sarani
Other Locations: Asansol Burdwan, Haldia and Kharagpur
- Orissa
Bhubaneswar, Cuttack, Rourkela and Sambalpur
- North East
Aizwal, Gangtok, Guwahati, Imphal, Jorhat, Silchar and Shillong
- Bihar
Bhagalpur, Gaya, Muzafarpur and Patna
Jharkhand
Bokaro, Dhanbadh, Jamshedpur and Ranchi
- Uttar Pradesh
Agra, Allahabad, Ghaziabad, Kanpur, Lucknow and Varanasi
Madhya Pradesh
Bhopal, Indore and Jabalpur
- Rajasthan
Ajmer, Jaipur, Jodhpur, Kota and Udaipur
- Punjab
Jalandhar, Ludhiana, Mohali and Patiala
- Kerala
Ernakulam, Kollam, Kozhikode, Palakkad and Thrissur
- Tamil Nadu
Madurai, Pondicherry, Salem and Tiruppur
- Goa

Q What are the revenue streams in a Clinic? And what is the overall profitability?

The Clinic will derive its income broadly from the following services:
Consultation including counseling services
Diagnostic Services
Preventive Health Check Programs
Dental Services
Treatment room
Others (Telemedicine, doctor @home, referrals etc)
The Clinic is expected to generate revenue through all of the above sources. It is also expected that there will be a
large degree of cross-referrals between various revenue generating streams. In the first year of operation, the Clinic
in India can expect to generate between Rs. 15 million to Rs. 20 million, depending upon the facilities that are
provided

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