We have a lot of these great clusters, and when they put their funds together, that you can put an impact in that market that, quite frankly, is uncompetable compared to anybody else. All those independents in that local market, because if you have 30 or 40 units all contributing to that local marketing spend, what you can spend that on is very different than if you’re a sole practitioner trying to market to your clinic. So I think there’s a lot of some really exciting things that will be coming down the pike, and we’ll get more details as we go forward. And I also think it’s just that focus on our lapsed patients and focusing on making the patient experience better so that we can keep that patient longer could have huge implications for us.
I mean, if you think about the last seven or eight years, we’ve always been so focused on new patients and really haven’t spent the time we could have on that lapsed and on trying to extend the time for that patient to stay with us. So there’s some real opportunities, I think, to really focus on, quite frankly, the improvement of the bottom line. What you should be hearing is we are highly focused on improving unit economics on that clinic level. We know we’ve had some challenges with higher costs on labor over the last several years. We know we’ve had some issues with new patients. And so it’s really incumbent upon us as a franchisor to stay laser like focus on improving those unit economics for our franchisee and of course, our corporate units as well.
Jeff Van Sinderen: Okay, appreciate you taking my questions and best of luck.
Jake Singleton: Thank you very much.
Operator: And our next question comes from CJ Dipollino from Craig-Hallum Capital. Please go ahead with your question.
CJ Dipollino: Hey, guys, CJ Dipollino on for Jeremy Hamblin. Wanted to ask a quick question about sales and marketing. Looks like it was down about 1 million sequentially from Q3 to Q4. Could you give a little color on that drop and then maybe how we should think about it into the New Year?
Jake Singleton: Sure. I think you’ll see that normalized. As we tried to put it in the commentary a little bit through the first three quarters of 2023, we were running a little bit hot in terms of our overall plan spend for the year in sales and marketing. So Q4, you just saw some of that normalize. As we think about our national marketing fund, the goal is to really spend that entire pool each period. And so when you’ve kind of accelerated some of your expenses into the earlier parts of the year, you kind of see a natural step back in Q4. So really, I think you’re just seeing the timing of that play out quarter-to-quarter through 2023. So as we get back into 2024, I think you’ll see that normalize again into the quarter-by-quarter cadence. Where that typically falls as Q2 and Q3 are usually a little bit heavier, Q1 and Q4 are a little bit lighter.
Peter Holt: I think it’s also important to always remember is that the bulk of the marketing that takes place in the franchise system. And certainly in our case, is that local store marketing, which is completely off our P&L. And so yes, we have NMF that runs through the P&L, but it’s really that local store marketing that each of those franchisees are spending, on average, $3,000 or more a month, is where you’re seeing the real spend in our franchisees as it relates to marketing.
CJ Dipollino: Okay. Very helpful. And then just one more on the P&L. Thinking about G&A moving forward, it looks like in 2022, 2023, it jumped up to about 69%, 70% of sales. How would you think about that moving forward in 2024?
Jake Singleton: Yes. Again, I think the overall, with the refranchising strategy we expect to see the overall G&A burden reduce considerably for the consolidated organization. Again, the timing of when we can start to reduce that G&A is really predicated on the timing of those refranchising transactions. So as we move through 2024 and 2025 and we begin to execute on the refranchising, all of the clinic level G&A costs will come off the books and then we’ll begin to curtail the outside the 4-wall overhead as well as the corporate unallocated overhead we expect those to reduce as we move through. And that’s really the critical focus of management, understanding that for that strategy to work we’ll have to curtail the G&A expenses accordingly, and we’ll stay focused on that.
CJ Dipollino: Okay. Very helpful. Thanks guys and best of luck.
Peter Holt: Thank you very much.
Operator: And our final question today comes from Thomas McGovern from Maxim Group. Please go ahead with your question.
Thomas McGovern: Hey guys. So real quick, I wanted to touch back on some of that employee retention. So based on my industry research, I’ve seen a lot of Articles suggesting that there is going to be a fairly considerable reduction in skilled medical professionals over the coming years. So maybe if you could just go into a little bit more color on some of your plans to keep doing attractive and keep that retention rate high?
Peter Holt: No. It’s a great question. There’s no question because our doctors are at the core of our business. Without doctors in chiropractic, we have no business because that’s obviously the core of what we do. And that we are very much focused on working with the schools and working with associations to make them aware of The Joint, and why we are a good place for them to either become a franchisee if they have the resources or come and work for us. If you just look at the overall market, doctors of chiropractic there’s 16 accredited schools in the United States today that graduate doctors of chiropractic. It’s usually about a 3.5-year program, and those 16 schools graduate roughly between 2,400 and 2,500 doctors a year.
