Letter of Intent Template for Buying an Optometry Practice

Parties and Practice Identification

Identifies the buyer entity, the selling optometrist or practice entity, and the specific practice being acquired — including the legal name under which it operates, its physical location, and any doing-business-as names used in patient communications or insurance credentialing.

💡 Confirm whether the seller operates through a professional corporation, a standard LLC, or as a sole proprietor — this has direct implications for state corporate practice of medicine compliance and how the deal must be structured. If the seller has multiple clinic locations, specify which locations are included in this LOI and whether any are excluded.

Transaction Structure

Defines whether the deal is structured as an asset purchase or equity purchase, and enumerates which specific assets are included — typically patient records, optical inventory, equipment, the practice name, phone numbers, website, insurance contracts, and lease rights — while explicitly listing any excluded assets.

💡 Asset purchases are standard in optometry acquisitions and preferred by buyers for liability insulation. Sellers sometimes push for equity sales for tax efficiency — particularly when personal goodwill is a significant portion of value. Clarify early whether accounts receivable are included or excluded; most SBA lenders will not finance receivables, and excluding them simplifies the deal while reducing disputes about collectability.

Purchase Price and Valuation Basis

States the proposed total purchase price, the valuation methodology used to arrive at it, and how the price may be adjusted based on findings during due diligence — including adjustments for inventory levels, equipment condition, or changes in active patient count.

💡 Optometry practices in the lower middle market typically trade at 3x–5.5x EBITDA. Sellers with strong optical dispensary revenue, high private-pay percentages, and modern OCT or digital refraction technology command multiples at the higher end. Always define 'active patient' explicitly — the industry standard is a patient who has visited at least once in the trailing 24 months — and include this definition in the LOI to prevent disputes during due diligence.

Deal Financing Structure

Outlines how the purchase price will be funded, including the anticipated SBA loan amount, buyer equity injection, seller note or earnout, and any contingencies related to financing approval.

💡 SBA 7(a) financing is the most common structure for first-time optometry practice buyers at this revenue level. Most SBA lenders require the seller note to be on full standby for the first 24 months of the loan. Sellers should be made aware of this restriction upfront to avoid surprises at closing. If the seller is resistant to a seller note, consider increasing the equity injection or negotiating an earnout tied to retained patient revenue in year one.

Seller Transition and Employment Agreement

Specifies the post-closing role of the selling optometrist, including duration of continued clinical work, compensation structure, scheduling expectations, and any flexibility provisions — critical for patient retention and managed vision care credentialing continuity.

💡 The seller transition period is the single most important risk mitigation tool in an optometry acquisition. A seller who departs within 60 days of closing can trigger significant patient attrition — often 20–35% of the patient base. Many managed vision care plans, including VSP, also require the departing OD to remain credentialed and active during a transition window. Push for a minimum 12–24 month commitment. Sellers concerned about loss of freedom can be offered flexible scheduling and reduced hours after month 12.

Non-Compete and Non-Solicitation

Defines the geographic radius and duration of post-sale restrictions preventing the seller from opening or working at a competing optometry practice and from soliciting patients, staff, or insurance relationships.

💡 Non-compete enforceability varies significantly by state — some states such as California impose strict limits on enforceability. Engage a healthcare attorney in the practice's state before finalizing these terms. Buyers should also include non-solicitation of insurance contracts and payer relationships, not just patients and employees. Sellers who intend to continue practicing in a non-competing specialty or geography should request carved-out exceptions in advance.

Due Diligence Access and Timeline

Grants the buyer a defined period to review financial records, patient data, insurance contracts, equipment condition, lease terms, staff agreements, and regulatory compliance documentation before being obligated to proceed.

💡 For optometry practices, the most critical due diligence items are: active patient count validation against the practice management system, insurance contract transferability confirmation with each managed vision care plan, and equipment condition reports. Request an independent equipment appraisal for any diagnostic technology older than 7 years. Also request a payer mix analysis — if any single plan represents more than 25% of revenue, the contract transferability risk is material and should be a deal condition.

Exclusivity and No-Shop Provision

Prevents the seller from soliciting or entertaining competing offers from other buyers during the agreed exclusivity window, giving the buyer a protected period to complete due diligence and secure financing.

💡 A 60–90 day exclusivity window is standard for optometry acquisitions in this size range. Sellers may push back on exclusivity without a meaningful earnest money deposit — consider offering a $10,000–$25,000 good faith deposit, refundable upon material misrepresentation by the seller, to secure seller commitment. Avoid agreeing to exclusivity periods shorter than 60 days if SBA financing is involved, as lender processing alone can consume 30–45 days.

Confidentiality

Obligates both parties to maintain strict confidentiality regarding the existence of the transaction, patient information, financial data, and proprietary practice information — both during and after the negotiation period.

💡 HIPAA compliance is non-negotiable in optometry transactions. Patient records reviewed during due diligence must be handled under a Business Associate Agreement (BAA) or through a de-identified data process. Engage a healthcare attorney to establish an appropriate due diligence access protocol before any patient data changes hands. Failure to comply with HIPAA during the due diligence process can expose both parties to regulatory liability.

Conditions to Closing

Lists the specific conditions that must be satisfied before the buyer is obligated to close, including financing approval, satisfactory due diligence, lease assignment, insurance contract transfers, and key employee retention.

💡 Insurance contract transferability is often the most underestimated closing condition in optometry deals. VSP, EyeMed, and Spectera each have distinct credentialing and transfer processes that can take 60–120 days. Initiate these discussions with payers as early as possible in the due diligence period. If a major payer refuses to transfer contracts, negotiate a revenue holdback or price adjustment rather than walking away — in many cases the buyer can re-credential independently within 90 days of closing.