Internal working concept · June 2026 · Confidential

Davidson Dental Appraisals & Sales — Deal & Platform Concept

One asset, three seats. The DDAS acquisition, the Farooq collaboration, and the operator succession plan — viewed from ownership, from Steve's chair, and from David's.

What's changed in this version (for anyone working from a printout)

June 10 · 2:15 PM MT

  • Core/overflow line — assessed, happy medium settled: the test is source, not volume. Steve-originated Alberta business stays core at 60% at any volume, up to the existing ~$550–600K comp cap (≈1.75× baseline — consistent with the $400K cap he's already seen). Platform-originated business and the East Coast are overflow from dollar one (Farooq collab ~10% of our net; East Coast 40–50% after travel). The 1.25× line (≈$650K) is kept only as the tie-breaker for ambiguous/co-originated deals — a pure volume cut would have paid 60% on Farooq deals in slow years and clawed Steve's own deals to 10% in hot ones.
  • Maritimes reclassified as overflow: outside the 60% pool; our net splits with Steve ~40–50% after travel & accommodation, with worked math.
  • New — East Coast travel fund: a capped $10–15K/yr business-development travel budget (flights home + accommodation) as a deal sweetener.
  • New — Steve's baseline financials: 2022–23 disclosures added to ground the thresholds.

June 10 · 12:15 PM MT

  • New — Maritimes & East Coast: "Chapter two" section on Steve's tab (originate from back home, back-end runs remotely), plus a growth-arm card and an open decision on timing/licensing. Economics: our net splits with Steve ~50/50, after travel and direct deal costs.
  • New — Post-close rollout sequencing (this tab): how to introduce the Farooq collaboration after closing — close clean → deliver promises → reopen the conversation Steve already had → pilot two Lane 2 deals → formalize — with honesty guardrails.
  • New — Steve's cut of the collaboration (this tab): his core book stays at 60% untouched; Farooq is pitched as overflow support, and Steve earns ~10% of DDAS's net share on overflow deals, with an optional post-step-back trailer.
  • Removed: Steve's son-in-law as a successor candidate (Steve tab) — he's out.

June 10 · ~10:00 AM MT

  • Inside Farooq's playbook: appraisal product, fee philosophy, $2M floor, portfolio endgame — distilled from his materials.
  • Two-lane model: pipeline mapped to Lane 1 (DDAS-led, sub-$2M) vs Lane 2 (co-brand); sandbox split now applies only to Lane 2, with an honest dilution note at today's pricing.
  • "One relationship, stacked fees" exhibit: ~$153K per transaction + ~$19K/yr recurring vs ~$69K today.
  • Alberta scenario engine: market stats and an interactive 5-year model with four presets (Steve today → Aggressive).
  • New growth arms: deal-closing services, disability insurance (David gets LLQP), WM piggyback (Farooq's $15M ≈ $100K/yr precedent), startup/build & procurement (beat-the-quote 50/50), consulting/dashboards, portfolio sale process.
  • David's tab: insurance licence track and personal recurring book added.
  • Correction: pipeline total is $412K, not $422K (Westmor = $40K at 4%).

The thesis: Davidson's brand and Alberta relationships + Farooq's appraisal engine and service stack + an operator we develop (David) = the dominant dental transaction platform in Western Canada. Steve gives us 3–5 years of brand continuity and mentorship; Farooq gives us execution quality that wins clients in a single meeting; David gives us a way to own the operating layer without founder time.

How the pieces fit

DDAS (Davidson)Brand · listings · Steve's relationships · showings
Farooq / ADA CPAAppraisals · due diligence · lawyers & banks · deal execution
Closed dealsCo-branded appraisals · fee split · larger average fees
EcosystemAdvisory · insurance · real estate · investment arm
The moat is not the brokerage. It's the relationship network — every closed transaction creates a dentist who trusts us at the most important financial moment of their career. Each service arm is a monetization layer on that trust.

The two engines, side by side

6 deals
Steve's current pipeline
$412K total commissions
~$69K
Steve's avg fee (≈3.0% blended)
Small deals, thin pricing
6 + 14
Farooq: closed YTD + pipeline
$1M+ in Q1 alone
~$250K
Farooq's historical avg fee
~3.5× Steve's per deal
The gap is the opportunity. Farooq wins clients in one meeting by showing how his appraisals and process differ — and his appraisals genuinely are better. Plugging Davidson's deal flow into Farooq-grade pricing, packaging, and extra services is the single fastest value lever we own.

Inside Farooq's playbook (from his materials)

The appraisal product

40-page institutional-grade reports: clinic profile & photos, capacity analysis, patient & procedure analytics, normalized financials, three forecast scenarios (no-growth, growth, 50% partnership) and four valuation methods (EBITDA multiple, revenue multiple, DCF, asset value). This is what wins listings in one meeting.

The fee philosophy

Value-creation framing, not commission framing: work fees (~$30K) plus success fees tied to outcomes — e.g. 0.75% on financing raised, 10% of interest savings, 25%-of-uplift commission structures. He quantifies the value he creates, then prices against it.

The $2M floor

Farooq targets practices worth no less than ~$2M. He structurally ignores the volume end of the market — small GP practices, hygiene clinics, associate buy-ins. That end is Davidson's bread and butter.

The portfolio endgame

His Portfolio Sale Process: bundle 25–30 committed clinics and sell at 11.5–12x EBITDA vs. 7.5–8.5x standalone — a 50–60% valuation arbitrage to DSO/PE buyers, with PowerDent360 powering due diligence. A brokerage network like ours is exactly the feedstock.

Two lanes, no turf war. Four of Steve's six pipeline deals sit below Farooq's $2M floor — the books barely overlap. The model is segmentation, not competition: Lane 1 — DDAS-led (sub-$2M practices, buy-ins, transitions; David's training ground; DDAS keeps 100%). Lane 2 — co-branded ($2M+ practices: DDAS originates, Farooq's engine executes, fee split). Lane 3 — later: portfolio process across the combined network for the step-change exit multiple.

Steve's pipeline (current), mapped to lanes

#PracticeLocationAnnual productionEst. value*RateCommissionLane

*Illustrative at 125–160% of production (Farooq's own standalone benchmark); actual value depends on EBITDA and practice specifics.

Deal economics sandbox — the Farooq collaboration

Co-branded deals: who earns what?

Applied to Steve's current pipeline ($13.7M production) for illustration. DDAS keeps 100% of Lane 1 deals (sub-$2M, $3.7M production); the split applies only to the two Lane 2 co-brand candidates (Three Hills + DSG, $10M production).

2.5% — discount broker3.0% — Steve today6.0% — full-service premium
30%50% — Farooq's floor as executor65% — Bronco keeps as originator today
DDAS
Farooq
Total fee pool (pipeline)
DDAS total (Lane 1 + Lane 2 share)
Farooq share (Lane 2 only)
DDAS uplift vs. today's $412K solo
The Bronco precedent is our benchmark. Bronco gets Farooq the meeting and does showings; Farooq does the valuation, the pitch, the lawyers, the banks — and currently keeps only 35% (~$300K across a handful of deals). He's trialling 5 deals and says it has to go to ≥50% after. Translation: origination is worth 50–65% of the fee, and that's exactly the asset Davidson + David bring. We can offer Farooq a better partner than Bronco — recurring co-branded flow, real back-end leverage from our team, ecosystem cross-sell — and still keep the originator's share.

Read the defaults honestly: at today's 3.0% pricing, splitting Lane 2 is dilutive on the existing pipeline. The collaboration only pays through what Farooq actually brings — premium pricing (move the first slider toward 4–5%: full-service appraisal packages justify it), higher win rates on listings, and bigger average deals. That's the bet, stated plainly.

One relationship, stacked fees

The anatomy of a single $2.5M practice sale once the full shelf is live — versus the ~$69K average fee Steve earns today:

Transaction fees

Brokerage commission4% full-service rate (gross, before any Lane 2 split)$100K
Deal-closing servicesLawyer & bank coordination, lender competition — or folded into a premium commission$20K
Disability / buy-sell policyFirst-year commission, David licensed$3K
Equipment & fit-out procurementBuyer-side reno/upgrade: beat-the-quote, 50/50 savings split$30K
Per transaction~$153K

Recurring fees (annuity layer)

Wealth management trail~$1.2M sale proceeds referred @ ~0.6% — Farooq's precedent: $15M client ≈ $100K/yr~$7K/yr
Practice consulting & dashboardsThe PowerDent360 pattern Dmitry already runs internally — sold to the buyer post-close~$12K/yr
Per relationship, compounding~$19K/yr
~2.2x the fee per transaction, plus an annuity that never existed before. And the buyer of the practice becomes the next decade's client — consulting, insurance, eventual resale. The relationship monetizes on both sides of every deal.

Alberta market & growth scenarios

~1,600
Dental practices in Alberta (est.)
~11% of Canada's ~15,000
~$2B
Annual AB clinic revenue (est.)
From $18B national market
60–100
Ownership transitions / yr (est.)
~4–6% annual turnover
5% → 20%
DSO penetration, Canada → US level
Consolidation tailwind for deal flow

Scenario engine — platform revenue at run-rate

Pick a preset or set your own assumptions. Network effect = more deals and bigger deals: Slade's clinics, Farooq's 500+ client base, and PowerDent360 surface listings Steve never saw.

4Steve today: 630 (≈⅓ of AB market)
$1.5Mnetwork pushes this up$5.0M
2.5%Steve today: 3.0%6.0%
60%blend of Lane 1 (100%) + Lane 2 (split)100%
Run-rate revenue (steady state, Y5)
…of which recurring at Y5
Share of est. AB transitions (~80/yr)
Platform revenue per relationship
Transaction revenue (ramped)Recurring revenue (accumulating)

Ramp assumption: 50% → 75% → 90% → 100% of run-rate over Y1–Y4 as David scales and the Farooq channel matures. WM trail and consulting accumulate (each year's referrals stack on the last). Alberta market figures are estimates for sizing only.

Acquisition structure (as proposed to Steve)

At close

$150K cash

Paid at initial closing — locks the deal, gives Steve day-one liquidity.

Years 1–3

60% of gross fees — on the book Steve originates

Steve & Lisa keep running the business and draw 60% of gross fees on Steve-originated Alberta business — his book and pipeline, at any volume — up to the absolute comp cap (~$550–600K/yr, raised to accommodate the pipeline). Platform-originated business and the East Coast are overflow, paid via overrides instead. Our team absorbs appraisal production, DD, and execution. DSG deal carved out at 75/25 given Steve's pre-deal origination work.

Years 4–10

Performance-based installments

Sized off avg Y1–3 uncapped earnings: 55 / 45 / 35 / 25 / 20 / 15 / 10%. Share sale → LCGE shelter for Steve & Lisa. PV at prime (4.45%): base ≈ $550K, growth ≈ $675K, stretch ≈ $800K.

Strong Y1–3 performance on Steve's core book flows directly into his payout — and collaboration overflow pays him an override on top (see Steve's cut below). Aligned incentives without paying 60% on revenue the Farooq engine creates.

Rolling out the Farooq collaboration — post-close sequencing

The purchase stands entirely on its own — we'd buy DDAS with or without Farooq. The collaboration is a growth initiative layered on after close, and Steve has already met Farooq once when we floated the idea. He didn't object; we just never followed up. So this is a follow-up, not a reveal.

Closing · day 0

Close clean

The purchase agreement is negotiated and priced on its own merits — no Farooq linkage in the documents, the pricing, or the conditions. If Steve raises Farooq before close, answer plainly: the idea we floated a few years ago is still on the shelf, nothing is agreed, and it changes nothing about his deal. Sequencing is fine; misrepresentation is not.

Months 1–3

Deliver the promises first

Operate exactly as the framework described: our team absorbs appraisal production, DD, and execution; the pipeline (incl. DSG at 75/25) closes cleanly; comp flows on schedule. Nothing new is introduced until the things we already committed to are visibly true. Trust before change.

Month 3–4

Reopen the conversation Steve already had

Framed as continuity: "Remember when we sat down with Farooq a few years back? Now that the dust has settled, we'd like to pilot what we discussed then." Frame Farooq as overflow support — capacity for deals beyond the existing book's size and volume, not a replacement for anything Steve does today. Bring the economics in writing — including Steve's ~10% override on our net — and the framework we sent him already said it: "any future co-branding with Farooq's firm would be a later conversation." This is that conversation, on schedule.

Months 4–9

Pilot two co-branded Lane 2 deals

Davidson-led, client-facing under the DDAS name; Farooq's appraisal engine works inside the cover. Full transparency with Steve on the split, the pricing uplift, and the win rate. Let the math make the argument — overflow deals pay him an override on business that otherwise wouldn't exist, while his core book and 60% comp stay untouched.

Months 9–12

Steve's verdict, then formalize

If the pilot worked, Steve has personally earned more from it. Formalize the playbook, set the standing split, and open the next chapter — including the Maritimes option if he wants it.

How this stays honest: the purchase never depends on the collaboration; the prior Farooq meeting makes this continuity rather than surprise; the branding commitment is kept literally (DDAS leads everything client-facing, co-branding appears only inside Lane 2 appraisal documents — exactly what the framework reserved for "a later conversation"); and Steve's economics only improve, demonstrated in writing. The test for every step: it has to survive full daylight. If a step only works because Steve doesn't see it, change the step — not the disclosure.

Steve's cut of the collaboration

Core

Core = deals Steve originates, at 60%

The 60% comp and installment mechanics apply to everything Steve originates in Alberta — at any volume — up to the absolute comp cap already drafted (~$550–600K/yr ≈ 1.75× his baseline revenue). A hot year on his own book never bumps him to override rates. Source, not volume, draws the line — consistent with (and better than) the $400K cap framing he has already seen.

The overflow

~10% of our net on collab deals

Farooq is pitched as overflow support — business the platform originates (Farooq's channel, our network, PowerDent360 leads) from dollar one, plus the East Coast territory by definition. That business sits outside the 60% pool; instead Steve earns ~10% of DDAS's net share (total fee less Farooq's cut). Example: $3M deal at 4% = $120K fee; 50/50 with Farooq leaves us $60K; Steve clips ~$6K on business that otherwise wouldn't exist.

The lock-in

Post-step-back trailer

Optionally, the override survives his step-back on deals sourced from relationships he originated — extending his pension-style tail. Turns Steve into the collaboration's long-term advocate instead of its monitor.

Why source beats volume (the happy medium): a pure 1.25× revenue cut misfires in both directions — it pays 60% on Farooq-channel deals in a slow year, and claws Steve's own deals down to override rates in a hot one (deadly optics given the pipeline he's bringing, and inconsistent with the comp cap we already raised to let that pipeline flow). So: the primary test is source — Steve-originated Alberta business is core at 60% up to the absolute cap; platform-originated business and the East Coast are overflow from dollar one. The 1.25× trailing-revenue line (≈$650K) survives as the tie-breaker for ambiguous or co-originated deals: below it, ambiguity resolves in Steve's favour; above it, to overflow. Attribution is recorded per listing at intake and reconciled monthly — a registry, not a debate. One decision remains: overflow revenue shouldn't feed his Y1–3 installment base — the override is his participation; otherwise we pay for the same dollar twice.

People & roles

Owners

Slade & Dmitry

Capital, strategy, M&A, governance. Not in the deal-flow day-to-day. Slade: leadership & growth calls. Dmitry: structure, finance, capital deployment.

Execution engine

Farooq (ADA CPA)

Appraisals, valuation, due diligence, lawyer/bank coordination. Initially a fee-split collaborator with co-branding; long-term structure (JV, merge, cross-equity) deliberately deferred.

Brand & mentor

Steve (+ Lisa)

Runs DDAS for 3–5 years, keeps the name on the door, trains the successor. Min 18-month commitment; step-down at his pace.

Operator partner

David Tumbach

Starts part-time (evenings — when tours happen anyway) while keeping his full-time role. Learns under Steve + Farooq, takes on deals, becomes partner and ultimately runs DDAS.

Bench

Zeph / Viran

Technology and investment arms once the transaction platform is producing cash and relationships.

Growth arms

Now

Brokerage & appraisals

Co-branded, Farooq-grade. The core fee engine.

Now

Buy-ins & successions

Smaller transactions — David's training ground, volume builder.

Now

Deal-closing services

Lawyer & bank coordination per transaction — $15–25K fee or folded into a premium commission. Farooq's lender-competition playbook (7 lenders, 40+ calls) is the template.

Next

Insurance (disability-first)

David gets LLQP-licensed. Disability, buy-sell, key-person — every transition surfaces the need. Offered across both books; Farooq takes an origination cut on his channel.

Next

Wealth management

Two feeders, one trail. Every practice sale creates investable proceeds — and, bigger, our own ~30 dentist clients can move their portfolios to Farooq's WM (and likely their tax/bookkeeping with them). Even a partial shift of a 30-client book is a large recurring annuity — his precedent: one $15M client ≈ $100K/yr. We originate; Farooq's licensed platform delivers.

Next

Startup, build & procurement

Slade's equipment pricing extended to clients — new builds, renos, upgrades. Two models: flat planning/procurement fee, or beat-the-quote with 50/50 savings split. Reps get the aggregated volume; we get the pricing.

Next

Practice consulting & dashboards

Playbooks + the dashboard pattern Dmitry already runs on our own operations. EBITDA improvement → higher valuations → bigger exit fees.

Next

Maritimes & East Coast

Steve's chapter two: originate back home in Atlantic Canada under the DDAS brand, with appraisals, DD, and closing run remotely by the Farooq engine and our team. Underserved brokerage market, aging owner base. Treated as overflow outside the 60%; our net splits with Steve ~40–50%, after travel & accommodation.

Later

Real estate

Dental buildings, sale-leasebacks; ~$20M partner capital at 7–8% target.

Later

Investment arm

Internal capital first; family-office trajectory.

Later

IT services

Internalize → externalize as managed services.

Later

Analytics (PowerDent360)

The intelligence layer: exit-readiness and valuation scores feed DDAS deal flow.

Later

Portfolio sale process

Farooq's 11.5–12x bundling play, fed by the combined client network. The step-change exit for clients — and for us.

Open decisions

Long-term structure with Farooq
Start with fee-split + co-branded appraisals, no exclusivity — mirroring his Bronco trial. Decide in 12–24 months between: ongoing JV, merging DDAS-Alberta operations, or cross-equity. Deferring this is deliberate: we'll know far more about deal flow, who originates what, and David's trajectory.
Bronco channel overlap in Alberta
Bronco (ex-Patterson, built 150 clinics) feeds Farooq meetings in the same geography. Is Bronco a competitor channel, a parallel channel, or a future acquisition for us? Need to map territory and referral-source conflicts before co-branding broadly with Farooq.
When does David get equity, and in what?
Sweat-equity into DDAS OpCo is cleanest; options: phantom units during apprenticeship → real units at full-time conversion. Needs to coexist with whatever the Farooq structure becomes.
Reciprocal fee flows with Farooq
The relationship is becoming two-way: we pay him on Lane 2 brokerage; he pays us on insurance and procurement sold into his book; both clip the WM trail. Each flow is individually simple, but the net needs a clean, auditable schedule before volume builds — otherwise every deal becomes a negotiation.
Adopt Farooq's fee philosophy at DDAS?
Steve prices at flat 2–6% commissions; Farooq prices work fees + success fees against quantified value created (e.g. 25% of uplift above a baseline multiple). Migrating DDAS toward value-based pricing — at least on Lane 2 and advisory work — may be worth more than any volume growth. Needs care: Steve's clients chose him partly for simplicity.
Governance (still the biggest unresolved item)
HoldCo above all vs. per-venture JVs vs. ADA CPA staying fully separate. Needs legal/tax analysis before the Farooq relationship deepens past fee-splitting.
Maritimes timing & licensing
When to pilot (likely year 2+, after the Farooq collab is proven in Alberta), and what provincial licensing applies — practice sales that include premises or leaseholds can trigger real-estate/business-brokerage licensing rules that differ across NS/NB/PEI/NL. Also: does the East Coast book eventually feed David, a local hire, or stay Steve-sized by design? And the split mechanics — 50/50 of our net after travel/accommodation and deal costs (shared cost discipline), vs. a lower flat share (40–45%) with costs on us (simpler statements).
Focus discipline
The standing risk is too many opportunities, not too few. Phase 1 = brokerage/appraisals + buy-ins + David's development. Everything else waits until the core engine runs without founder time.

Steve's seat: keep running the business you built, under your name, with a team behind you — get paid well for the working years, then get paid for the business itself, structured so growth during your runway flows straight into your payout.

The baseline — Steve's own numbers (2022–23 disclosures)

~$530K
2022 billings (per Steve's email)
$500–550K
Fiscal 2023 range (Sept 30 YE)
$88.5K
Normalized EBITDA, FY2022 (16.7%)
Comp normalized at 40% of revenue
~$338K
Combined T1s — Steve $192K · Lisa $146K
These disclosures anchor the deal math: the absolute comp cap (~$550–600K/yr ≈ 1.75× baseline revenue), the 1.25× tie-breaker line (≈$650K/yr) for ambiguous deal attribution, and the standalone-FMV calibration (~$550K) behind the installment targets. Everything we propose is benchmarked against numbers Steve gave us himself.

The shape of the transition

At closing

$150K cash payment

Up front, day-one liquidity. Locks the deal in.

Years 1–3 · working phase

Steve & Lisa run Davidson Dental — 60% of gross fees

Compensation for the work, not the sale. Our team absorbs appraisal production, due diligence, and deal execution so Steve's time goes to clients and to mentoring a successor. Minimum 18-month commitment; beyond that, step-down at his pace — stay three years, stay ten.

During the working years

Successor development

The one ask: bring a successor up to speed so the business outlives the transition. David Tumbach is our candidate — evenings and showings first, then deals.

Year 4 onward · payout phase

Performance-based installments through Year 10

Sized by what the business actually produced in Years 1–3 — the average sets the base. Year 4 is the largest installment (55% of base), stepping down each year after. Share sale, so most of it shelters under Steve and Lisa's LCGE.

Indicative 10-year economics (base case)

Working compensation (Y1–3)Cash at close + purchase installments
~$783K
Working comp, Y1–3 (base case)
~$685K
Close + installments, Y4–10 (base)
~$1.47M+
10-year total — before any growth uplift
5% growth case ≈ $1.50M; co-branded flow pushes higher
The growth kicker is real, not theoretical. Stronger appraisals and back-office capacity help Steve win and close more of his own listings — and every extra core-book dollar in Y1–3 raises both his 60% comp and his Y4–10 payout. Collaboration overflow is additive on top: an override on deals that wouldn't otherwise exist.

The pipeline, handled

PracticeLocationCommissionTreatment
In-flight deals close cleanly inside the structure; the DSG transaction (~$140K, ~⅓ of a year's revenue) is carved out at 75/25 in Steve's favour, recognizing his pre-deal origination work.

What changes, what doesn't

Stays the same

  • Davidson Dental Appraisals & Sales name and branding — his name is the brand in Alberta; we have no interest in changing that
  • Steve's client relationships and the way he runs his book
  • Lisa's role, at her current level and on her own timeline

Gets better

  • Behind the Davidson name: institutional-grade 40-page appraisals (four valuation methods, full forecast scenarios) that win listings in a single meeting
  • Appraisal production, due diligence, and execution come off Steve's plate
  • Overflow deal flow from the collaboration pays him an override — money on business that wouldn't otherwise exist, with his core book untouched
  • A broader shelf for his clients — financing, insurance, wealth management, equipment procurement — deepening relationships during the very years his payout base is set
  • A successor in the building means he can step down without the business stepping down
  • Share-sale structure → LCGE for both Steve and Lisa

Chapter two — back home in the Maritimes

An option, not an obligation: for the later working years — or whenever he's ready — Steve originates from the East Coast and lets the machine do everything else.

Why it works there

Atlantic Canada has roughly 1,000 dental practices (est.) with an aging ownership base and almost no dental-specialty brokerage — sellers default to generalist business brokers or get approached directly by DSOs. A trusted dental-only name, carried by someone from home, travels well.

How it runs

Steve does what only Steve can — relationships, listings, seller hand-holding — from his home region. Everything heavy is already remote by design: appraisals, due diligence, financing, and legal coordination run through the same Farooq-engine back-end that serves Alberta. Local showings can lean on a part-time local associate as volume builds.

What it does for Steve

A working chapter on his own geography and his own terms — closer to home and family. East Coast deals are overflow — outside the 60% pool entirely: after the back-end's cut and direct deal costs, we split our portion with Steve at ~40–50% — travel and accommodation come off before the split. It extends his earning runway without extending the Alberta grind.

Sweetener

East Coast travel fund

Steve already flies home often — make it part of the deal: a capped $10–15K/yr business-development travel budget (flights, accommodation) for trips that pair family time with prospect work — target two or more seller conversations per funded trip. Receipted, reviewed annually, sunsets at his step-back. Total cost ~$30–45K over the working years — trivial against the deal, but it lands as "we pay for your trips home" and gets him working the East Coast network early.

East Coast economics (concept): example — $2M practice at 4% = $80K fee. The back-end (Farooq's engine and/or our team) takes its share, say 40% → $48K to DDAS. Travel and accommodation are real in a four-province territory, so the split should come after direct deal costs: $48K less ~$8K travel/accommodation = $40K pool → ~$20K to Steve. Splitting profit rather than revenue keeps the headline at 50% while making cost discipline a shared interest; the alternative is a lower flat share of our net (40–45%) with costs on us. To be settled at pilot. One boundary to keep clean: exploratory/BD trips draw on the travel fund; deal-execution travel nets against that deal's pool — never both for the same trip.
Pilot-sized by design: start with one or two listings through his existing East Coast network, no quota. One homework item before launch: provincial licensing for business brokerage (and any real-estate component of practice sales) differs across NS/NB/PEI/NL and needs a quick check.

David's seat: a partner-operator track into a business that already has clients, a brand, and a mentor — start part-time while keeping the day job, learn from the two best people in the market, and grow into running (and owning) the platform.

Why this works around a full-time job

Evenings are the job

Practice tours and showings happen after 5pm — dentists can't show their office while patients are in chairs. David's constraint is actually the industry's schedule.

A live mentor window

Steve has committed to 3–5 working years with successor training as an explicit part of his deal. This window is the whole opportunity — it won't exist later.

Back-end is covered

Farooq's team handles valuations, due diligence, lawyers, banks. David's ramp is relationships and deal management — not technical grunt work from day one.

A lane with no traffic

Farooq won't touch practices worth under ~$2M — and that's most of Davidson's book. David's training ground (small practices, buy-ins, transitions) has zero channel conflict with the senior partner in the ecosystem.

The track

Phase 1 · months 0–12 · part-time

Apprentice

Shadow Steve on showings, listings, and client meetings (evenings/weekends). Sit in on Farooq-side appraisal reviews to build valuation literacy. Own logistics on 1–2 small deals end-to-end. Keep the full-time job — this phase is deliberately additive.

Phase 2 · year 1–2 · transitioning

Deal lead + licensed

Lead smaller transactions: hygiene practices, associate buy-ins, transitions — the volume end of the pipeline (Edge, Glad Smiles, Westmor-sized deals). First per-deal economics. Parallel track: complete the LLQP and get life & disability licensed — insurance is the most natural cross-sell in every transition, and it becomes David's first personal recurring book. Decision point on going full-time as flow justifies it.

Phase 3 · year 2–4 · full-time partner

Operator & partner

Runs DDAS day-to-day as Steve steps back. Equity participation vests in. Manages the Farooq relationship at the deal level; owns the listing pipeline.

Phase 4 · year 4+

Managing Director, DDAS

The seat Steve built, professionalized: 15–20+ transactions/yr target, team underneath, founders at the strategy level only. Comp architecture in the $200–500K+ operator range the platform is designed around.

What David learns, and from whom

From Steve

  • The Alberta dentist network — introductions with a warm handoff, not a cold start
  • Listing origination: how practices come to market and why sellers choose a broker
  • Showings, seller psychology, managing both sides to a close

From Farooq's engine

  • What a genuinely better appraisal looks like — 40-page reports with four valuation methods and full forecast scenarios — and how to sell with it in one meeting
  • Deal execution: due diligence, financing, lawyer/bank choreography
  • The full-service pitch: appraisal + sale + tax + transition as one package

Economics concept (to be refined together)

Phase 1

Per-deal participation

Defined share of DDAS's fee on deals he works — paid for contribution, not hours. Low risk while employed elsewhere.

Phase 2–3

Profit share → equity

Graduating profit share as he leads deals; sweat-equity or phantom units converting to real DDAS equity at full-time commitment.

Phase 4

Partner economics

Meaningful ownership stake in DDAS plus MD compensation. Aligned with the platform's "hire operators, not employees" principle.

Parallel

The insurance book

Once licensed, every deal David touches can carry a disability or buy-sell policy — first-year commissions plus renewals that are his recurring revenue, growing with tenure. The channel extends to Farooq's 500+ clients (with an origination cut back to Farooq), so the book scales beyond DDAS's own deal flow.

The honest pitch to David: this is not a job offer — it's a chance to apprentice into a fee-generating business with a retiring founder, a ready pipeline, and an execution partner already proven at $1M+/quarter, at near-zero career risk because the ramp fits after 5pm. The equity is earned, the path is explicit, and the ceiling is the MD seat of the dominant dental M&A platform in Western Canada.
What we need from him now: 5–8 hours/week of evenings, a commitment to the 12-month apprentice phase, and a read on his appetite for the full-time jump in year 1–2 so we can sequence Steve's step-down honestly.

One engine, two territories, three equal partners. BC stays 100% Farooq's. Everything outside BC runs through ExpansionCo — owned in equal thirds by Farooq, Slade, and Dmitry. He licenses his appraisal / PowerDent / CPA engine in; we bring the brand, origination, an operator, and capital. He's paid two ways: a flat 10% on the services he owns or brings, plus a third of the profit. Nothing else.

The structure

BC — hisCPA · PowerDent · 500+ clients · 100% Farooq
+
Engine, licensed inAppraisals · PowerDent · CPA · portfolio process
ExpansionCoAll non-BC · owned in equal thirds
We bringBrand · origination · operator · capital

How the money flows

Top-line revenueactive service lines, run-rate$4.24M
− Vendor & delivery costs($1.28M)
− Producer & specialist compSteve 40%, David, Ideh — paid off the top($0.74M)
− Farooq origination feeflat 10% on his services($0.26M)
Profit pool$1.96M
÷ three equal shares$0.65M each

The whole deal in two rules

1 · Equal thirds. ExpansionCo is owned one-third each. Slade and Dmitry take no salary — only their distribution. Every cost, including producer pay, comes out before the split, so all three fund it proportionally.

2 · Farooq's 10%. A flat top-line fee on the services he owns or brings — appraisals, PowerDent, wealth, coaching into his book, and his bookkeeping/tax practice. The high-cost pass-through lines (equipment, builds) carry none; clinic IT is a simple cross-referral, outside the model.

What each seat earns — indicative run-rate

$914K
Farooq — 10% fees + ⅓ profit
+ ~$504K to his co for delivery (arm's-length)
$652K
Dmitry — one-third
$652K
Slade — one-third
$600K
Steve — 40% producer
→ $375K as it steps to 25%
$60K
David — insurance producer
$80K
Ideh — BC build delivery

Figures illustrative at run-rate. Play with the live numbers in the Farooq structure tab →

Producer comp — built to decline

Steve starts at 40% — the market rate for a senior producer sourcing his own deals. It steps to 25% — the rate for recruits handed leads, brand, and platform — as origination shifts to us. Tie the step-down to origination moving to the platform, not the calendar: keep him at 40% on what he still brings himself, 25% on platform-fed deals. Same "source, not volume" logic already in his tab.

Why Farooq says yes

It's accretive — he loses nothing

  • Keeps BC, 100% — clients, practice, brand on home turf, untouched
  • Keeps the engine — PowerDent, appraisal IP, the CPA licence all stay his
  • Gets paid twice on his own work — the 10% fee plus a third of the upside

And he gains a business he can't build alone

  • Alberta + East Coast deal flow he doesn't have to originate
  • A real operator (David) and a capital partner, without diluting BC
  • New arms — coaching, insurance, procurement, bookkeeping — sold across both books
Before papering — three things to pin down. (1) Define "profit" precisely — struck before or after corporate tax and overhead. (2) Set an arm's-length rate card for Farooq's company on the lines it delivers, so that cost can't be inflated against the shared pool. (3) Tie Steve's 40%→25% step-down to origination shifting to the platform, not a fixed date.

Farooq's seat: the question isn't "how much of his business do we buy" — it's how we get equity-grade upside and protection on his engine without buying into BC or fronting much capital. The answer is geographic. BC stays 100% his baby. Everything outside BC — Alberta now, the East Coast next — sits in a vehicle we co-own and govern, into which he contributes his engine under an exclusive licence rather than a sale. Capital stays light, the seat is real, and the rug-pull is closed by contract, not by cap table.

The crown jewels are his — and that's fine. The appraisal IP, PowerDent360, the CPA practice, and his 500+ client relationships are the things that win listings in one meeting. We don't need to own them; we need exclusive access to them outside BC and a structure that captures the enterprise value we build on top. Trying to buy a piece of his core gets us a worse, Bronco-style deal — or kills it.

The deal in one screen — thirds + a 10% fee

The whole arrangement reduces to one structure. ExpansionCo is owned in equal thirds — Farooq, Slade, Dmitry. Costs come off the top (vendors, plus David & Ideh's pay); Farooq's company earns a flat 10% of top-line on the services he originates or owns; whatever profit remains is split three ways as distributions. Slade and Dmitry take no salary — only their third. Edit any revenue below to see how it lands.

Two ways money reaches Farooq, kept separate. (1) A 10% origination fee off the top-line of the services he brings or owns — appraisals, PowerDent, wealth, coaching into his book, and his bookkeeping/tax practice. (2) His one-third of the profit that remains. The high-cost pass-through lines (equipment, builds) carry no fee — 10% of their top-line would eat most of the margin. Where his own company does the work (appraisals, PowerDent, WM, bookkeeping), it is also paid for that work at an arm's-length rate, shown separately so the three-way split stays clean.

Service-line model — live & editable

All figures $K/yr at run-rate, illustrative. Toggle a line on/off, change its revenue, or flip whether Farooq earns his 10% on it. "Direct cost %" is vendor/COGS — and, on the lines his company runs, his arm's-length delivery pay.

OnServiceDoerRev $KDirect cost %Farooq 10%?Line profit
Paid before the split — off the topBasis%$K/yr
Producer comp — Steve now → David & recruits% of appraisals & brokerage
David — insurance (licensed producer)% of insurance
Ideh — clinic build delivery (BC)% of build — BC

Steve at 40% is the self-sourcing veteran rate; it steps to 25% as origination shifts to the platform and on recruits like David — type 25 to see the partners' uplift. Producer comp comes out of the shared pool, so all three owners fund it proportionally.

Farooq — fee + ⅓ ·
Dmitry — ⅓ distribution
Slade — ⅓ distribution
Profit pool (after fee, costs, David & Ideh)
Farooq
Dmitry
Slade

Plus to Farooq's company for delivery on the lines his team runs (appraisals, PowerDent, WM, bookkeeping) — arm's-length, so set a rate card so it can't be inflated against the shared pool.

Why Farooq's bar is taller than a third. His 10% fees sit on top of his equal third — that gap is the rainmaker premium, funded two-thirds by Slade and Dmitry. It is fair while his origination is the engine; if the unpaid operating load shifts to your side, revisit either the fee or the thirds. Still to define for the lawyers: whether "profit" is struck before or after corporate tax and overhead.
Outside the model — clinic IT. Farooq runs his own IT company, so IT isn't a JV line. Instead it's a simple reciprocal-referral understanding: he pushes our Calgary Wide IT offering to his clients, we keep that relationship and revenue. No fee math, no split — just cross-promotion. Deal-closing is likewise gone as a line; it's part of the brokerage fee, not a standalone service.

The recommended frame — one engine, two territories

BC — his babyADA CPA · PowerDent · 500+ clients · 100% Farooq, untouched
+
His engine, licensed inAppraisals · DD · PowerDent · portfolio process — supplied as a service
ExpansionCo (JV)Everything non-BC · co-owned · we govern
We bringDDAS brand · origination · David as operator · new arms · capital
Why a vehicle and not just a contract: a co-owned ExpansionCo captures the enterprise value of the whole non-BC build (not just a per-deal margin), gives a true board seat, and is the cleanest home for the new arms. Farooq licenses his stack to it and is paid to execute inside it; we contribute the brand, the deal flow, the operator, and the arms he doesn't have. DDAS feeds it. The growth arms live here.

The control question, reframed

Slade can have his 50/50 — or even control — but be precise about control of what. Once you separate the business we're building together from Farooq's existing business, Slade's 50/50 and Farooq keeping BC stop being in conflict.

We control — and should

  • The ExpansionCo vehicle and its governance
  • The DDAS brand and client-facing identity
  • Territory origination (Alberta, East Coast)
  • David as the operator we develop
  • The new arms — coaching, procurement, insurance

We own the brand, the relationships, the operator, the capital. This is the legitimate 50/50-or-control seat.

He controls — 100%, untouched

  • PowerDent360 and the appraisal methodology / IP
  • ADA CPA — the regulated accounting practice
  • His 500+ existing BC client relationships
  • The entire BC market

Demanding equity or control here is unrealistic and poisons the deal. We license access; we don't buy the engine.

The real worry — Slade's bandwidth vs. Farooq's speed. Farooq pushed his business forward solo and moves fast; the risk is that shared control makes him hostage to a part-time partner. Fix it by separating governance control from operational authority: owners hold the board and a short list of reserved matters (capital, new territories, new arms, sale); everything else is delegated to Farooq's engine + David as managing operator. Then add a speed valve — anything off the reserved-matters list proceeds without sign-off, and reserved matters carry a deemed-consent deadline (no response in X business days = approved). Control on paper, no bottleneck in practice.

The structures, ranked

#StructureWhat it isCapitalOur seatVerdict
1Territorial JV — ExpansionCoCo-owned NewCo owns all non-BC activity; Farooq licenses his stack + executes as a serviceLightEquity + boardRecommended frame
2Per-arm economics inside the JVEach arm ring-fenced with its own split reflecting who drives it (don't force one ratio across all)LightEquity by armLayer inside #1
3Exclusive master-services + reciprocal non-competeNo shared equity; exclusivity both ways. The legal moat — or the fallback if he won't share equityLightestContract onlyMoat inside #1 / fallback
4Cross-equity into his BC businessesMinority stakes each wayHeavyMinorityDefer (12–24 mo)
The build: Option 1 is the frame, Option 2 sets the economics inside it, Option 3 supplies the protective clauses. Option 4 — buying into his core — is capital-intensive, drags in the BC business we've agreed is his, and is already deferred elsewhere in this deck. Park it.

Per-arm ownership & economics

Different arms have different natural owners — so don't force one split across all of them. This is how 50/50 stays fair to both sides even when contributions differ by arm.

ArmNatural leadWhyTerritoryIndicative lean
Appraisals & Lane-2 executionFarooqHis IP, his engine, his qualityNon-BCFarooq-weighted
Brokerage & originationUs (DDAS)Brand, relationships, DavidNon-BCUs-weighted
Clinic-ops coachingUs (Dmitry)Our edge; runs into BC tooIncl. BCUs-weighted, fee-split to F on his book
Procurement & equipmentSladeEquipment pricing leverageNon-BCUs-weighted
Clinic design & buildUs (Slade + Ideh)Capital + build management; heavy associated costAB now, BC w/ IdehUs-weighted, small Farooq feeder
360 PowerDent (AB rollout)FarooqHis product; we resell & co-build the new versionAB (his IP)Farooq-weighted fee, shared AB margin
Calgary Wide ITUsClinic IT via Calgary Wide ITCalgary / ABUs-weighted, small Farooq feeder
Insurance (disability-first)DavidHis LLQP book; F clips origination on his channelBoth booksDavid's book
Wealth-management trailFarooqHis existing WM arrangementBothShared trail
Splitting by arm rather than a single blended ratio is what lets each side feel the structure is fair — Farooq leads where the engine is his, we lead where the brand, capital, and operating edge are ours.

Cross-fee pricing — recommendations & rationale

The principle: pay for the scarce input the counterparty actually contributes on each deal — execution labour, owned IP, or a relationship — not a flat percentage of the headline. This is exactly why "the same % both ways" breaks down: an hour of appraisal work and a warm procurement intro are not worth the same, even on identically-sized deals.

Type 1

Execution labour

Someone's people spend hours — appraisals, DD, bank/lawyer choreography, build delivery. Price = cost of delivery + fair margin. As the work insources to us or automates (salaried staff + AI), the fee should fall toward true marginal cost, not stay pinned to deal size.

Type 2

IP & product

An owned asset does the work — PowerDent. Price = product licence / rev-share, owner keeps the majority because they carry the build and maintenance cost. This is the one arm where the fee runs to Farooq.

Type 3

Relationship & leverage

Value comes from who you know and how much you buy — Slade's procurement relationships + Sierra Dental's scale. Price = a finder's fee on the introduction. There's no labour to compensate, so the reciprocal is deliberately thin.

ArmWhat the counterparty bringsTypeRec. cross-feeTrajectory
Appraisals & brokerageFarooq: the appraisal + (today) full deal executionLabourStart 50%Declines to ~15–20% (appraisal only) as David takes over
Deal-closing servicesFarooq: bank/lawyer playbook & coordinationLabour15%→ near 0 as David runs it himself
Clinic-ops coachingFarooq: referral into his BC bookReferral10–15%Flat — delivery + IP are ours
InsuranceFarooq: referral into his 500+ channelReferral15–20%Flat — David holds the licence & book
ProcurementFarooq: referral only — value is Slade's relationships + Sierra scaleRelationship~10%Flat — finder's fee, not a labour split
Clinic design & buildFarooq: referral; delivery is ours/Ideh'sLabour + capital~5%Thin feeder; margin is in delivery (see below)
360 PowerDent (AB)Farooq: his product & ongoing devIP / product50–60% to FReverse flow — we keep reseller margin + co-dev equity
Calgary Wide ITFarooq: referral; vendor deliversPass-through~10%Most revenue passes to the IT vendor
Buying group (later)Farooq: referral — value is scaleRelationship~10%Flat — same logic as procurement
Wealth-management trailFarooq: holds the WM relationship/licenceLabour / IP (his)50%+ to FHis relationship — execution schedule applies

The four that need a specific call

The important one

Appraisals: a declining schedule, not a flat 50%

Farooq moving his Edmonton appraiser from 35% to 50% is fair — today he does everything but the showings, and that's worth roughly half. So start at 50% as David's training wheels: Farooq's team carries the deal, David shadows. But two forces pull the number down. First, David progressively takes the meeting, the pitch, and the bank/lawyer choreography — the expensive relationship work stops being Farooq's. Second, the appraisal itself is produced by salaried staff + AI, so its true marginal cost is low and falling. So step it down against capability milestones, not dates — e.g. 50% (Farooq runs it) → ~35% (David co-leads) → 15–20% (Farooq supplies the appraisal only). The endpoint isn't a negotiated share of the deal; it's cost of the appraisal + a fair margin. David earns each step-down by demonstrably owning more of the deal.

The reciprocity trap

Procurement & the relationship arms

This can't be symmetric with the labour arms. The procurement value is Slade's relationships and Sierra Dental's purchasing scale — there is no execution for Farooq to share in, so when he refers a client he earns a finder's fee (~10%), full stop. A future buying group prices the same way. Paying him an appraisal-style split here would be paying labour rates for an introduction — the clearest case where "same % both ways" overpays the passive side.

Not standalone

Design is bundled into the build

Clinic design isn't its own revenue line — it's priced inside the design-and-build package, so it carries no separate cross-fee. It's modelled as one "design & build" arm for that reason.

BC delivery

Builds & Ideh's compensation

Builds are high-revenue but thin-margin and delivery-heavy — the scarce input is on-the-ground project delivery, not origination, so any referral feeder stays small (~5%). In BC, Ideh runs the on-site work and the designer back-and-forth, so pay him as the delivery lead: either a per-project management fee or a share of the build's net margin (~15–25% of build profit), scaling up as he absorbs more of the designer coordination and reduces what's paid to outside parties. In Alberta, build delivery runs through a partnered construction company that invoices the group.

The throughline: every arm where the labour can shift to our side over time — appraisals, deal-closing, eventually some build coordination — should be priced as a declining schedule tied to who actually does the work, so we're not paying Farooq deal-size rates for capacity we've insourced. Arms built on his IP (PowerDent) or his relationships (WM) hold their value because we never take those over; arms built on our relationships (procurement, buying group) pay him only a finder's fee from the start.

Anti-rug-pull protections

Equity alone won't protect us — these clauses do. They belong in the licence/JV agreement regardless of which structure we land on. The fear — "he offers the same services outside BC without us" — is closed here, in writing.

Core

Territorial exclusivity

Farooq cannot offer appraisals / DD / PowerDent / portfolio-process outside BC except through the JV. The single most important clause.

Core

Non-circumvention & non-solicit

He can't take JV-originated clients direct, and we can't route around his engine to a competing appraiser.

Core

IP licence with teeth

PowerDent + appraisal templates licensed to the JV for the territory; the licence survives his exit and is assignable on a JV sale.

Continuity

Change-of-control + ROFR

If he sells ADA CPA / PowerDent, the JV gets a right of first refusal and the expansion contracts bind the buyer.

Alignment

Earned permanence

His economics vest with continued supply — he can't bank the upside and walk.

Insurance

Step-in rights

If he stops performing — or slows — the JV can replace the execution function and dial his share down. Protects against both a walk-away and a slow-down.

360 PowerDent — the pipeline we can't lose

PowerDent isn't just a service line — it's the funnel into clinics. Its exit-readiness and valuation scores surface owners before they list, feeding DDAS deal flow nobody else sees. Lose access and the platform loses its top of funnel — so beyond the general IP licence, PowerDent gets its own ring of protection: guaranteed access, our right to make it better, and automatic rights to every future iteration.

Access

Perpetual territorial access

An irrevocable, perpetual licence to deploy and resell PowerDent outside BC through the JV — surviving his exit, a sale of his company, or the end of the wider collaboration. The funnel can't be switched off.

Future-proof

Every version — including future ones

The licence auto-extends to each successor build, module, and rebrand. He can't ship a "PowerDent 2.0" outside the agreement and strand the JV on a frozen version — better iterations flow in automatically.

Build

Co-development & contribution rights

We fund and contribute to the roadmap (our AB rollout and improvements), and those contributions are licensed into the product. Source/data escrow or equivalent continuity so it survives even if his company doesn't.

Funnel

Our data & leads are the JV's

The clinic data and lead signals PowerDent surfaces in our territory belong to the joint business — the pipeline it generates is ours, not parked in his BC entity.

Why PowerDent gets its own clause set. The general step-in and ROFR clauses protect the deal; these protect the funnel. PowerDent is the lead-generation engine that fills the pipeline — so we lock in continued access, the right to keep improving it, and automatic rights to every better version, ensuring the thing that sources our clinics can never be pulled out from under the joint business. It stays a permanent asset of the JV, current build and future, regardless of what happens to the wider relationship.

Beyond access — co-owning the successor (v2)

A licence protects the funnel; co-owning the next generation captures it. The long game isn't just guaranteed access to today's 360 — it's a jointly-owned v2 / successor platform we help design and build, turning a tool we resell into an asset we own. We don't fund it with cash now; we contribute what we've already built and an operator's perspective Farooq's team doesn't have. This is a plan-and-position item, not a today item.

Our contribution

IP & perspective, not cash

We've already built an internal dashboard that's more useful operationally than 360's reporting. Add real clinic-operator design insight — what an owner actually needs to act on — coupled with the coaching arm. That IP and perspective is our equity contribution to a v2.

The hard part

The v1 minority-investor knot

360 has significant minority investors who funded it. We can't cheaply buy into that cap table, and a v2 can't simply siphon v1's value or customers — Farooq owes those investors a duty. Any successor must use genuinely new IP, license from v1 at fair value, or bring v1 investors along.

Cash-light

Contribute, don't cut a cheque

No big outlay today. Take founding equity in a v2 NewCo for IP + sweat (our dashboard, operational design, coaching-derived data); defer any valuation or buy-in of v1 rights until the platform throws off cash or a clean structure emerges.

Sequencing

Plan now, act later

Lock the intent now — an option / right of first refusal on the successor — and keep investing in our own dashboard so it carries standalone value and leverage. Revisit the cap-table mechanics once v1's investor picture and our build are clearer.

The honest guardrail. A v2 we co-own can't be a vehicle to strand 360's minority investors. The successor has to stand on new IP (ours + a fresh build), license anything it draws from v1 at arm's length, or offer v1's investors a roll-forward — so it survives daylight with them too. Farooq sits on both sides of this, so it goes to counsel before anything gets built. The asset we'd bring — a working operational dashboard plus the coaching-and-design loop — is real leverage: it means a successor can be better than v1 on the operator's terms, not just a copy.

Why Farooq says yes

The exclusivity ask only lands if the trade is obviously good for him. It is — he gives up the right to expand outside BC alone, which he hasn't done and can't easily do without origination and an operator.

What he gains

  • Alberta + East Coast deal flow he doesn't have to originate — his own deck shows origination is the expensive 1,400+ hour part of the process
  • Brokerage feedstock for his portfolio-sale endgame, which explicitly needs committed clinics — our network is exactly that
  • New revenue arms (coaching, insurance, procurement) sold into his 500+ BC clients, with him taking an origination cut
  • A real operator (David) and a capital partner — without diluting his BC core

What he keeps

  • BC, 100% — his clients, his practice, his brand on home turf
  • The engine — PowerDent, appraisal IP, the CPA licence all stay his
  • Control of his own pace in execution, via delegated operating authority
  • Reciprocal fees flowing back to him on insurance, procurement, and the WM trail sold into his book

The coaching arm — our independent engine

The one lever that runs into BC

Clinic-operations coaching is your clean value-add, and the only revenue flow that travels back into Farooq's home market — a foothold in BC economics without buying into BC.

Why it's strong

  • Pairs with PowerDent: the data diagnoses, the coaching treats — a natural upsell on every analytics client
  • Sold at an extra charge to clinicians & managers, fee-split with Farooq on his BC book (he originates, our team delivers)
  • Majority ours in the per-arm split — it's our edge, not his engine
  • Gives Farooq a reason to value the partnership beyond Alberta, deepening the lock-in

How it runs

  • Productized playbooks + the dashboard pattern Dmitry already runs internally
  • Coaching cadence with clinicians/managers; KPIs tracked in PowerDent
  • EBITDA improvement → higher valuations → bigger exit fees down the line
  • Phase 1, not "later" — low-capital, differentiating, earns our seat on the merits
The flywheel: coaching lifts clinic EBITDA → PowerDent proves it → the practice becomes a better brokerage listing and a stronger portfolio-sale candidate → the relationship monetizes again at exit. One client, stacked fees, on both sides of the border.

Sequencing

Step 1 · before papering

Agree the principle

BC is his; non-BC is shared in a co-governed vehicle; he licenses rather than sells. Land this verbally before lawyers — it's the whole deal in one sentence.

Step 2 · term sheet

Frame, splits, protections

ExpansionCo ownership + governance (reserved matters + speed valve), the per-arm economics, and the exclusivity / IP / step-in clauses. Keep the regulated accounting work inside his licensed entity — license the brand, process, and data, not the CPA service.

Step 3 · pilot

Prove it on live deals

Run the Lane-2 co-brand on the existing pipeline and stand up the coaching arm on a handful of clinics — including one or two BC PowerDent clients — to demonstrate the reciprocal flow before formalizing.

Step 4 · 12–24 months

Decide the long-term structure

Only once deal flow, origination attribution, and David's trajectory are known do we choose between ongoing JV, deeper merge, or cross-equity. Deferring is deliberate.

Open decisions

Does Slade accept "control of the vehicle, not the engine"?
The whole reframe hinges on this. If Slade insists on control or equity over PowerDent / ADA CPA itself, we're back to a deal that's expensive, capital-heavy, and likely unacceptable to Farooq. The pitch to Slade: you get your 50/50-or-control of the thing we're actually building together, delegated operations keep it fast, and we don't tie up capital buying a BC practice.
ExpansionCo split — 50/50, or weighted to contributions?
50/50 is clean and matches Slade's instinct, but it raises deadlock risk (hence the speed valve). A contribution-weighted split (recognizing brand + origination + operator + arms vs. the engine + IP) may be more defensible. Needs a rough valuation of each side's contribution.
CPA-licensing & regulated-service boundary
Accounting/assurance work likely must stay inside Farooq's licensed entity — so the JV licenses the brand, process, and data layer and buys the regulated service from ADA CPA at arm's length, rather than performing it. Confirm with counsel before structuring.
Brokerage & appraisal licensing across territories
Practice sales that include premises or leaseholds can trigger real-estate / business-brokerage licensing that differs by province — AB now, NS/NB/PEI/NL for the East Coast later. A quick jurisdictional check before each territory launch.
Bronco channel overlap in Alberta
Bronco already feeds Farooq meetings in the same geography. Map the territory and referral-source conflicts before we sign broad exclusivity — is Bronco a competitor channel, a parallel one, or a future acquisition?
Reciprocal fee schedule
We pay him on Lane-2 execution; he pays us on coaching, insurance, and procurement sold into his book; both clip the WM trail. Each flow is simple alone, but the net needs a clean, auditable schedule before volume builds — otherwise every deal becomes a negotiation.