How to Recognize Unethical NDAs & Red Flags When Buying a Dental Practice

How to Recognize Unethical NDAs & Other “Red Flags” When Buying a Dental Practice

Some dental practice transitions companies use the NDA document to overreach its actual intent, a practice that can create problems for individuals buying a dental practice. The NDA could include a written attempt to a) establish an exclusive relationship with prospective buyers or b) put unethical conditions on a buyer as a requirement to learn more about potential dental practice opportunities. It is important for you as a practice purchaser, associate, or buy-in/partner candidate to understand and recognize a few matters that could become “buyer beware” red flags:


Confidentiality/Non-Disclosure Agreements are valid legal documents.

NDAs are designed by attorneys and are meant to protect the sensitive financial and private business documentation of dental practice owners and sellers. It is normally required that you sign the agreement prior to your review of practice-related documents and information related to entering into a dental practice purchase, association, or partnership.

The NDA agreement you sign is a valid legal document, so read it closely and understand all it entails and requires of you. If something seems out of the ordinary, question it, as you may ultimately be responsible for complying with the contents of the agreement. You should be signing the NDA to agree that you will keep all information related to the inquiry (sensitive or not) confidential. This is reasonable. You should not be signing in agreement to anything else.


Look out for yourself, and hire legal representation if you prefer.

Unless you’re hiring someone to specifically represent you, you must look out for yourself and protect your interests. While our entire Henry Schein PPT team takes pride in creating fair transactions with fair documentation, not all “transition specialists” operate in the same manner.

Look closely at financial statements and documentation from the transition broker. Has he or she provided you with a complete set of statements, a clean, reasonable pro forma (not projection), and a full set of statistics on the practice and how it runs? Or are you left guessing?

Some NDAs also seek to limit your access to legal representation. During the process of buying a dental practice, you should never be required to relinquish your ability to engage competent advisors. While this may come at an additional cost to you, proper advice or representation can be invaluable, saving you from costly mistakes.


Not all dental practice “specialists,” “experts,” or “brokers” are alike.

This is important to remember when you’re buying a dental practice. Quality transition specialists and experts represent quality transition opportunities. Not only is the practice documentation clear, but it is consistent and professional. Further, documentation should be complete and provided in a timely manner. True specialists will have collected and reviewed documentation up front to establish price or value, long before a practice is available for sale on the market. Specialists are complete and thorough and do not compromise their work or integrity.

The term “expert” should include specialists, too. These are industry leaders who have proven their expertise in practice with a track record of successful transitions. They have earned a reputation in their industry through hosted public speaking engagements and third-party published writings. Experts and true specialists are also involved in the communities they serve, building a reputation of trust amongst their peers and, most importantly, their clients. Additionally, they surround themselves with other top minds and resources. These professionals are dedicated to providing you with a smart and successful transition when buying a dental practice.


Contact A Henry Schein Professional Practice Transitions Professional

Have a question about selling, buying or transitioning a dental practice? Contact us online and have a Henry Schein Professional Practice Transitions Expert help take the stress — and emotion — out of selling or buying a dental practice.

Henry Schein Professional Practice Transitions, Inc. is a national leader in dental practice transitions. A subsidiary of Henry Schein, Inc. they provide expert guidance for selling and buying dental practices, assessing partnership and associateship opportunities, and performing dental practice appraisals and valuations.