Buying an Existing Med Spa? Here’s the Structure Due Diligence Checklist

Most buyers evaluating a med spa acquisition run the numbers hard — revenue trends, margins, lease terms, staff retention — and treat the legal structure as a formality their attorney will “handle in closing.” That’s backwards. A practice with strong revenue and a broken structure is a liability you’re buying, not an asset. The financials tell you what the business has done. The structure tells you whether it can keep doing it after ownership changes hands.

Start With the Entities Themselves

Get clear, in writing, on exactly how the business is structured today: is there a separate professional entity, and who owns it? Is that ownership actually held by a licensed physician, or does it just look that way on paper? In a CPOM state, if the professional entity’s ownership isn’t clean, you may not be able to simply acquire “the business” the way you would a typical LLC — the clinical entity may need to change hands separately, under its own rules.

Read the Management Services Agreement Like a Contract, Not a Formality

If an MSO structure exists, the MSA is the document that actually defines the relationship you’re inheriting. Check whether the management fee is structured at fair market value or tied to a percentage of clinical revenue — the latter is a common compliance problem that can follow you into ownership. Check the term length, renewal terms, and what happens to the agreement if either entity changes hands.

You’re not just buying a patient list and a lease. You’re buying whatever compliance posture the seller built — or didn’t.

The Due Diligence Checklist

• Confirm the professional entity is owned by a currently licensed, actively practicing physician — not a license being used passively
• Review the MSA for fee structure, term, and assignability
• Request documented protocols, standing orders, and evidence of physician review — not just their existence, but their recency
• Ask for delegation records for every non-physician provider performing procedures
• Check for any open board complaints, payer disputes, or litigation tied to the clinical entity
• Confirm how patient records and consents will transfer, and whether that transfer itself requires disclosure to patients

None of this needs to slow down a deal that’s otherwise sound. It just needs to happen before you close, not after you discover a gap the hard way six months into ownership.

If you’re evaluating an acquisition and want a second set of eyes on the structure before you commit, that’s exactly where we start every engagement.