Key Takeaways for Atlanta Dentists
- Most DSO buyers ask sellers to remain clinically involved after closing for a negotiated work-back period, often 2 to 5 years. Shorter terms can be realistic when the seller reduces personal production before going to market.
- The stay-on agreement functions as a contract term. Its major provisions are negotiable before the letter of intent (LOI) is signed: duration, compensation, early-exit rights, disability carve-outs, noncompete scope, and how it ties to any earnout.
- Atlanta sellers can gain leverage by running a competitive multi-buyer process. An auction-style process among vetted DSO and private buyers can create meaningful negotiating power on work-back terms.
- Private doctor-to-doctor sales usually involve a shorter transition of roughly 4–8 weeks, with the full purchase price paid at closing. DSO deals often defer 20–49% of headline value as earnouts and involve years of associate-level employment.
- McLerran & Associates provides sell-side advisory services that help Atlanta dental practice owners design competitive processes and negotiate stay-on terms across both DSO and private-buyer paths.
Discuss your potential work-back terms with McLerran & Associates.
The Work-Back Agreement and Why It Feels Locked In
The work-back agreement, also called a stay-on, employment transition agreement, or post-close employment agreement, sets out what the selling dentist does after closing. It typically addresses duration, clinical schedule, compensation structure such as base salary and production percentage, equity vesting, administrative duties, and how the stay-on connects to earnouts and holdbacks.
In most DSO transactions, the stay-on appears as a condition of the deal rather than a separate side agreement. The buyer often will not close without it, so the term can feel fixed. In practice, the contract remains open to negotiation. The stay-on exists because the buyer pays a premium for patient goodwill and clinical continuity and wants the seller present during integration. That need for continuity creates room to negotiate how much continuity the buyer receives, for how long, and at what cost to the seller, until the LOI is signed.
Informal industry guidelines can add to the confusion. Some frameworks suggest that a selling dentist should remain for a set period to support patient retention or follow a multi-year ramp, peak, and wind-down arc. These guidelines are informal rather than binding. They are not legal mandates and are not codified by the Georgia Board of Dentistry or any other regulatory body that oversees dental practice sales in Georgia. They reflect buyer preferences that can sound like requirements when repeated often.
The corporate-practice-of-dentistry framework in Georgia sets the legal backdrop. Under O.C.G.A. § 43-11-47, the clinical entity must be owned and controlled by Georgia-licensed dentists. DSOs therefore operate through a management services agreement (MSA) structure rather than direct ownership. That structure influences how documents are drafted, but it does not dictate how long the seller must stay on. The stay-on length remains a contract term that the parties negotiate.
See a full overview of how to sell a dental practice to a DSO in Atlanta.
Key Negotiation Levers in the Stay-On Agreement
Once sellers understand that the stay-on is a contract term, the next step is to focus on which terms can move. Every lever below is one that a sell-side advisor can negotiate on the seller’s behalf. Competition among buyers creates the leverage to shift these terms. A seller speaking with only one DSO has limited leverage. A seller running a structured process among multiple vetted buyers has far more influence.
Duration. The stay-on period can shorten when the seller has already reduced personal production before going to market. Examples include working fewer clinical days and building reliable associate coverage. A clear plan for who will remain clinically active and how patients will be informed lowers perceived buyer risk and supports a shorter commitment. A seller who still produces most of the practice’s revenue personally usually faces stronger pressure for a longer term.
Compensation. Post-close pay usually shifts from owner distributions to a percentage of production or collections. Compensation commonly runs 25 to 30 percent of collections in general dentistry DSO deals, which can reduce income compared with pre-close owner earnings. Both the base of the formula and the rate are negotiable. Production-based compensation is generally more favorable to the seller than collections-based compensation because it is not reduced by denied claims or write-offs.
Early-exit rights. Sellers benefit from clear terms on what happens to earnout payments and rollover equity if the buyer terminates them without cause during the work-back. Without this protection, a seller who is let go early can lose deferred compensation through no fault of their own. Negotiated windows, defined notice periods, and buy-out provisions that spell out the financial consequences of early departure in either direction are often achievable when the LOI is negotiated carefully.
Disability, death, and retirement provisions. Standard death and disability carve-outs usually state that the noncompete and employment obligation end if the seller dies or becomes disabled. These provisions should appear explicitly and should address what happens to unvested equity and unpaid earnout in those situations.
Noncompete and nonsolicit scope. DSO buyers often propose noncompetes at 25 or more miles and 7 or more years. An industry-defensible range for sellers is 5 to 15 miles and 2 to 3 years. Georgia’s Restrictive Covenants Act is relevant. For a covenant signed by someone selling a material part of a business, Georgia presumes reasonable the longer of 5 years or the period during which sale payments are being made. As a result, the noncompete tied to a DSO sale can extend longer than an employee noncompete. Sellers should negotiate the scope with dental-specific legal counsel.
Earnout linkage. DSO earnout provisions tied to post-close production targets can add 5 to 20 percent of additional value. They also introduce measurement risk when buyer-side operational decisions affect the metrics. Sellers often seek pro-rata provisions so a near-miss on an EBITDA target still pays most of the earnout. They may also request later start dates that account for integration disruption and non-interference language that prevents the buyer from undermining the earnout through its own decisions. These protections are most realistic when negotiated into the LOI.
Explore 2026 DSO deal structures and outcomes in the Atlanta market.
See the 4-phase DSO transition timeline for Atlanta dental practice owners.
Review your stay-on options with an Atlanta-focused advisor.
DSO Stay-On vs. Private Buyer Transition in Atlanta
The contrast between a DSO work-back and a private doctor-to-doctor transition can be one of the most significant choices an Atlanta seller faces. The table below highlights how these paths typically differ on four terms that often matter most: duration, compensation, equity, and exit flexibility.
| Attribute | DSO Affiliation | Private Doctor-to-Doctor Sale |
|---|---|---|
| Typical Duration | 2 to 5 years as a clinical associate | McLerran’s private doctor-to-doctor walk-away sale typically involves a ~4–8 week work-back before the seller exits |
| Compensation Structure | Associate salary, typically 25–30% of collections for general dentistry | Full purchase price paid at closing, with no ongoing production-based employment obligation in most cases |
| Equity / Rollover | Roughly 10–40% of deal value often taken as DSO equity, usually illiquid until a future recapitalization, with 20–30% common | Typically a straightforward asset purchase with cash proceeds paid at close and no rollover equity |
| Exit Flexibility | Limited, because early departure can affect earnout payments, equity vesting, and potential breach claims | High, because the seller usually exits after a short transition with no ongoing financial obligations tied to performance |
The headline purchase price in a DSO deal can exceed a private-buyer offer for practices with strong EBITDA. DSOs can offer 20 to 40 percent more on headline price for practices with EBITDA above $250,000. At the same time, 20 to 49 percent of that headline may be deferred as an earnout or holdback, and the seller often commits to years of associate-level employment. A private buyer usually pays the full agreed price at closing with no deferred consideration. The better path depends on the seller’s financial goals, timeline, and comfort with ongoing clinical work, so a side-by-side comparison built on actual numbers can be helpful.
Compare DSO and private equity paths for Atlanta dental practice sellers.
Early Departure: Contract Terms That Shape the Outcome
The contract sets the financial consequences of leaving before the work-back ends, which makes exit provisions a central negotiation point.
Leaving before the work-back term ends can trigger several outcomes, and many of them can be shaped during LOI negotiations:
- Earnout forfeiture: Early departure can affect unpaid earnout consideration, especially when the earnout ties directly to the seller’s continued clinical production.
- Equity clawback: DSO associate agreements often include clawback provisions that recapture part of the upfront payment if the dentist leaves early. Unvested rollover equity may also be forfeited.
- Breach of contract exposure: When the employment agreement lacks a negotiated early-exit right or buy-out provision, leaving before the term ends can expose the seller to breach claims.
- Noncompete activation: In dental practice sale agreements, the noncompete start date depends on the trigger in the contract. It may run from closing, from the end of employment, or from another event, which can extend the practical restriction.
Sellers can address these issues directly. They can request clarity on what happens if they leave early, how compensation is structured, how any earnout behaves after departure, and how far and how long the noncompete runs. Disability and retirement carve-outs, without-cause termination rights, and defined buy-out provisions are often most achievable at the LOI stage, when seller leverage is strongest.
Atlanta Market Dynamics and Seller Leverage
Atlanta ranks among the most active dental acquisition markets in the country. DSOs concentrate in growing metros such as Atlanta, where demographic trends support practice growth and practices can command a premium over rural and slow-growth markets. The Atlanta metro added nearly 62,000 people from 2024 to 2025, third in the nation by numeric growth, and buyer demand across general dentistry, orthodontics, pediatric dentistry, and oral and maxillofacial surgery remains strong.
That level of buyer interest can translate into leverage for Atlanta sellers on both price and work-back terms. Competing DSO and private-buyer processes can help sellers negotiate duration, compensation, autonomy, restrictive covenants, earnouts, and exit rights. A seller who approaches a single buyer with no competitive process has limited room to move these terms. A seller who runs a structured, multi-buyer process often has more influence across the full package.
McLerran & Associates’ Atlanta office, led by Matt Sutton, provides local sell-side support and market knowledge across Atlanta practice types, from high-producing general dentistry practices inside the Perimeter to specialty practices across the broader metro. That local presence, combined with national buyer relationships, can help create a genuinely competitive process for Atlanta sellers.
Learn about the DSO landscape for Atlanta dental practice sellers.
How McLerran & Associates Supports the Decision
McLerran & Associates is the nation’s largest dental-specific sell-side M&A advisory and brokerage firm and runs both private-buyer and DSO paths in roughly equal measure. That balance allows McLerran to prepare a side-by-side view of value: what the practice may command in the private-buyer market and what it may command in the DSO market, based on a CPA-led, diligence-grade EBITDA analysis that buyers can review in detail.
From that starting point, McLerran typically runs a structured, auction-like bid process among a vetted pool of qualified buyers, often generating around 10 offers over roughly 45 to 60 days. That competition can create leverage to negotiate the work-back on the seller’s terms, including shorter duration, stronger compensation, defined early-exit rights, disability carve-outs, and earnout structures that protect proceeds even if performance lands slightly below target.
The firm’s track record reflects this approach, with roughly 2,000 successful practice sales, approximately $2 billion in closed transaction volume, more than 10,000 practices evaluated, and a transaction rate of roughly 85 to 90 percent. McLerran works exclusively on the sell-side, so its incentives align with the seller.
For Atlanta sellers, the local point of contact is Matt Sutton, who leads McLerran’s Atlanta office. Owners who have not yet chosen between DSO and private-buyer paths may also find value in the McLerran M&A Summit (October 29–30, 2026), a dental-only educational event designed for owners who want to understand their options before committing to a path.
See how long it typically takes to sell a dental practice to a DSO in Atlanta.
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Frequently Asked Questions
Do I Have to Keep Working After I Sell My Atlanta Dental Practice to a DSO?
In most DSO transactions, the buyer asks the selling dentist to remain clinically active for a defined period after closing. This arrangement is often called a work-back, stay-on, or employment transition agreement. The duration commonly falls in a multi-year range and depends on buyer type, practice characteristics, and negotiation. The obligation exists because the DSO pays a premium for patient goodwill and clinical continuity and wants the seller present during integration. The stay-on remains a contract term, so duration, compensation, exit rights, and related provisions can be negotiated before signing.
Can I Negotiate a Shorter Stay-On?
Many sellers can negotiate a shorter work-back when the practice already runs less dependently on the owner. Examples include reduced owner chair time, strong associate coverage, and a clear patient transition plan that lowers perceived continuity risk. A seller who still produces most of the revenue often faces pressure for a longer commitment. Running a competitive process among multiple buyers can also help shorten the term, because buyers who want the deal may accept more flexible stay-on provisions. The LOI stage usually offers the most leverage for these discussions.
Do Informal Industry Guidelines About Staying On Apply to DSO Sales?
Some sellers hear references to informal guidelines suggesting that a selling dentist should remain for a certain period to support patient retention. These guidelines do not appear in Georgia law, are not codified by the Georgia Board of Dentistry, and do not function as fixed terms in regulatory frameworks. They reflect buyer preferences based on real concerns about patient attrition when a seller leaves quickly. In practice, DSO work-back terms vary widely, and the actual duration in a given deal comes from negotiation rather than a fixed rule of thumb.
What Happens If I Leave Before the Work-Back Ends?
The consequences depend on the specific employment agreement. Common outcomes of early departure include loss of unpaid earnout payments, clawback of unvested rollover equity, potential breach of contract exposure when no early-exit right exists, and activation of the noncompete based on the trigger in the agreement. These outcomes are shaped by the contract rather than by default rules. Sellers who negotiate early-exit rights, defined buy-out provisions, disability and retirement carve-outs, and without-cause termination protections before signing have clearer expectations about the cost of leaving early.
How Does the Stay-On Differ If I Sell to Another Dentist Instead?
A private doctor-to-doctor sale usually involves a shorter transition. In McLerran’s walk-away sale structure, the seller typically remains for roughly 4 to 8 weeks. During that time, the seller introduces patients to the new owner, supports staff continuity, and hands off referral relationships. The new owner assumes operational responsibilities immediately after closing. There is usually no multi-year employment obligation, no earnout tied to post-close performance, and no rollover equity. The full purchase price is generally paid at closing, although headline valuations may be lower than those available from DSOs for practices with strong EBITDA.
Conclusion: Treat the Stay-On as a Negotiated Term
Atlanta dental practice owners reviewing a DSO term sheet or LOI with a multi-year work-back requirement are looking at a negotiable financial term. Duration, compensation, early-exit rights, disability provisions, noncompete scope, and earnout structure can often be shaped before documents are finalized.
Sellers who tend to achieve stronger outcomes on these terms usually run a competitive process with multiple vetted buyers, a side-by-side valuation across DSO and private-buyer markets, and a sell-side advisor who treats the work-back as a central negotiation point. McLerran & Associates follows this approach across roughly 2,000 successful practice sales and approximately $2 billion in closed transaction volume.
Owners who already have a DSO term sheet in hand, or who see a transition on the horizon, can benefit from understanding work-back options before signing.
Connect with McLerran & Associates about your Atlanta practice transition.
