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This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.

Here is a situation that plays out across Florida all the time. A dentist gets a letter of intent on a Tuesday and by Thursday has mentally spent the money. A dental service organization — a DSO, one of the regional roll-ups that has been buying up general and specialty practices across the state for the better part of a decade — offers a number that is a real multiple of collections, a chunk of it in cash at closing and the rest in rollover equity and an earnout tied to the next three years of production. The accountant says to have a lawyer look at the LOI, not because anyone thinks there is anything to look at. With these deals, there is always something to look at.

The thing about selling a dental practice in Florida is that it is two transactions wearing one set of clothes. There is the business deal — the price, the cash-versus-rollover split, the earnout, the working capital — and there is the regulatory deal, which is the part that decides what the business deal is even allowed to look like. A DSO cannot simply buy your practice and own it the way a strategic buyer buys a manufacturing company. Florida law will not let a nondentist own the clinical practice. So the deal gets restructured around that wall, and the restructuring is where founders lose value they did not know they were holding.

Why a nondentist cannot just buy your practice

Start with the statute that shapes everything else. Under , no person other than a licensed dentist — and no entity other than a professional corporation or limited liability company composed of dentists — may employ a dentist in the operation of a dental office, control the use of dental equipment while it is being used to provide care, or interfere with a dentist’s clinical judgment. The stated purpose of the section is to keep a nondentist from influencing the exercise of a dentist’s independent professional judgment. This is Florida’s version of what other states call the corporate-practice-of-dentistry doctrine, and it is the reason a DSO does not, and cannot, simply take title to your practice.

What the DSO buys instead is the non-clinical half. The clinical practice stays in a professional entity owned by a licensed dentist — sometimes you, sometimes a designated affiliated dentist the DSO works with. That professional entity then signs a long-term management services agreement with the DSO, under which the DSO provides everything that is not the practice of dentistry: the real estate, the equipment, the billing, the HR, the marketing, the purchasing, the back office. The DSO earns a management fee. The economics of the deal — the value you were promised — flow through that management agreement and through whatever equity you roll into the DSO’s parent, not through a clean sale of the practice itself. The same statute requires that any arrangement under which a nondentist provides a dentist with equipment or materials must include a provision expressly preserving the dentist’s complete care, custody, and control of the practice. That clause is not boilerplate. It is the seam holding the whole structure together.

Where the structure quietly moves your value

Once you see that the deal is built around the management agreement, the negotiation points reorganize themselves. First, the management fee is the real price of admission, and it is the part of the documents founders read last. The headline purchase number gets the attention, but the management fee — how it is calculated, whether it is a fixed percentage of collections or a cost-plus arrangement, whether it can be adjusted, and how it interacts with your earnout — determines how much of the practice’s future cash actually reaches you versus the platform. An earnout measured on practice profitability is measured after the management fee comes out. If you do not negotiate the fee, you have not negotiated the earnout.

Second, the rollover equity is not the cash. DSOs love rollover because it aligns you to the platform and because it lets them pay a smaller cash number at closing. But rollover equity in a private, sponsor-backed parent is illiquid, junior to whatever debt the platform carries, and exits on the sponsor’s timetable, not yours. The drag-along and the liquidity mechanics in the equityholders’ agreement matter as much as the multiple. Founders routinely treat the rollover as if it were a deferred cash payment. It is not — it is a bet on someone else’s roll-up.

Third, the clinical-control language cuts both ways. The statute requires that you, as the licensed dentist, keep clinical control. That is your protection while you remain. But it is also the DSO’s headache, and well-drafted management agreements will push every non-clinical lever — scheduling intensity, staffing budgets, supply choices, the patient-experience metrics that feed your earnout — as close to the regulatory line as they can. Read the agreement for where “non-clinical efficiency” starts to squeeze the clinical practice you are still legally responsible for, because your license is on the line even after the controlling economics are not yours anymore.

The diligence items that decide the number

Three pieces of diligence drive a dental deal more than founders expect, and all three are worth getting in front of before the DSO’s team does.

The first is patient records and the obligations that travel with them. Florida dental records carry retention requirements, and a practice’s records are both an asset and a liability — they are the continuity of the patient relationships the buyer is paying for, and they are a compliance exposure if they have not been kept and secured properly. HIPAA sits on top of the state retention rules. A DSO’s diligence team will test how records are stored, how they migrate to the platform’s systems, and whether the consents and notices support the transfer. Sort this out early; a records problem discovered late becomes a price problem.

The second is the associate dentists and their non-competes. The value of a multi-provider practice is partly the providers, and the DSO is buying the expectation that they stay. Florida enforces non-competes under section 542.335, and a sale-of-business context generally supports longer and broader restraints than a bare employment contract would — but only if the agreements exist, are signed, and are drafted to survive the transaction. If your associates are working without enforceable restrictive covenants, the buyer either discounts for the flight risk or makes signing new covenants a closing condition that you have to go ask your associates to accept. Neither is a conversation you want to be having for the first time at the eleventh hour. The retention and restrictive-covenant package is part of the deal architecture, not an afterthought.

The third is the lease and the equipment. Most practices operate in leased space, and most leases require landlord consent to assignment or to a change of control. Because the DSO structure keeps the clinical entity in place and layers a management agreement on top, the parties sometimes assume the lease is undisturbed — and sometimes the lease’s change-of-control language says otherwise. The equipment, similarly, may be subject to financing liens or maintenance contracts that do not transfer cleanly. These are the unglamorous items that move closings.

How the money actually lands

When the structure is built right, the working capital and indemnity mechanics decide what you keep. The purchase price gets adjusted for working capital at closing, and in a practice that runs on receivables and pre-collected treatment plans, the definition of working capital and the target peg are real money. The working capital target is a negotiated number with consequences, and a practice with a lot of unearned patient deposits needs that handled deliberately. On the back end, the indemnity package — the caps, the baskets, the escrow, the survival periods — governs what the DSO can claw back if a records problem, a billing problem, or a licensing problem surfaces after closing. The cap architecture is where a seemingly seller-friendly deal can quietly turn, and a selling dentist should understand the four numbers that bound post-closing exposure before signing, not after.

The takeaway

A DSO offer for a Florida dental practice is rarely a simple sale, because section 466.0285 will not allow it to be one. The transaction reassembles itself around the wall between clinical ownership and non-clinical management, and the value you were promised flows through a management agreement and a stack of rollover equity rather than through a clean transfer of the practice. Negotiate the management fee as if it were the price, because economically it is. Treat the rollover as the speculative instrument it is. Get the records, the associate non-competes, and the lease in order before diligence starts. Do that, and the structure that protects your license can also protect the number you sell for.

Our Fernandina Beach office works with dentists and specialty-practice owners on DSO and private transactions throughout Florida, from Jacksonville down to Coral Gables and Miami.

If you are a Florida dental practice owner weighing a DSO letter of intent and want a second read before you sign, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.