The Ultimate Guide to Starting a Costco Sublease

by Antonio Chirumbolo, OD, Drew Provost, OD, and Marinda Hofacre, OD
May 13, 2020
15 min read
980 views

A Costco sublease is a great opportunity for an OD looking to grow their business and clinical skills. Here’s how to get started!

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Corporate optometry offers dozens of different ways to practice optometry—from being an employed doctor in a full-scope practice, to managing a retail practice, to holding your own sublease, to name only a few! If you’re looking for an opportunity to grow both as a business manager and a clinician, the sublease model might be the best fit for you.

Costco offers a variety of options for doctors looking to sublease a practice. We interviewed two Costco optometrists and sublease holders to learn more about what makes this a great opportunity for new and experienced ODs, and how to get started with Costco!

Why Consider a Sublease?

There are several distinct advantages to the sublease model. Typically, subleases are ideal for those who desire independence and the flexibility that a private practice might offer, but with more business support, less financial risk, and fewer overhead costs.

For Drs. Marinda Hofacre, OD, and Drew Provost, OD, a Costco sublease was appealing for two main reasons: the Costco brand, and the chance to grow their business skills.

A sublease offers more control over your schedule and the kind of care you offer than an employed position—but also more work. For these optometrists, that was the right fit for their personality; they like being always busy and wearing many hats in the practice.

For a new OD who wants to gain clinical experience before jumping into management, this might be a more challenging task. But if you’ve got some patient care under your belt and are looking to make the next step in your career, a sublease might be the perfect opportunity!

When deciding whether a sublease is the right choice for you, there are key questions you should ask yourself:

  • How do you want your day to look?
  • How many days do you want to see patients?
  • How many patients are you comfortable seeing each day?
  • Do you like taking care of patients every day, or would you prefer to mix it up with business?
  • What do you want your lifestyle to be like?

Once you’ve answered these questions, you’ll be able to better understand if the sublease model is the right choice for you.

Why choose a Costco Optical Sublease?

If you’ve read this far, you’re seriously considering taking the plunge into buying a sublease. But why choose Costco?

For Dr. Provost, Costco was appealing for three reasons: reputation, cost, and autonomy.

“Costco has such a powerful reputation,” he says. “Costco has consistently been rated number one in consumer reports for their optical, and I knew that having loyal members and customers for the optical would translate into a thriving business for my optometry practice.”

Dr. Hofacre was drawn to Costco for similar reasons, and adds that the ability to offer cost-effective services was also a huge draw, as was the freedom to practice the way she wants. “I work somewhere where I can do exactly what I was trained to do, and nobody tells me how to do it. As an optometrist, it’s important to offer your patients the best care—so I really do enjoy my freedom inside Costco.”

Both Dr. Hofacre and Dr. Provost highlighted the autonomy offered by Costco to their subleasing doctors. “They don’t give you a laundry list of rules you have to follow,” says Dr. Provost. “I feel like this is my practice, and I get to run my practice how I want, whether it means scheduling, hiring, or marketing. Costco has provided me with a great foundation.”

Both doctors emphasize the high patient flow through their practices, and how much they love the fact that their location is easily accessible to many patients. It’s allowed them to build high-efficiency practices without sacrificing quality of care.

Getting Started with Costco Optical

The first point of contact with Costco when you’re ready to apply for a sublease is the Costco Corporate office. You can apply by sending Denise Brown Mogil, Director of Professional Services, a CV. Her contact is dmogil@costco.com. You can also reach out to the regional manager of that area. When a lease is available there is an interview process. You interview with the director, regional and the warehouse manager. It is a collective process to choose the best candidate for the location.

Dr. Provost started by getting in touch with the Costco Regional Manager in his area. “I had an initial phone interview with the regional manager, and at that point they told me they were considering many doctors for the sublease,” he says.

After the initial interview and a follow-up, he was moved to the second stage in the process, in which they reviewed a business plan for the sublease. “They gave me an idea of what their expectations were, and wanted to hear what my expectations were for the practice,” he says. “After that, I was told that I received the sublease allocation opportunity.”

The interview process was as much an interview of them as it was of him, he says. “We were both making sure that it would be a good fit. They obviously wanted to make sure that I was a competent doctor, but they also wanted to make sure that our mindsets and goals were aligned.” He says he felt that he was treated very respectfully throughout the application process.

This is the key part of the interview and application process at every level—making sure that everyone on the team is aligned to the mission and goals of the organization. Dr. Provost has spoken with over a hundred other Costco doctors over the last few years, in conferences or during professional education opportunities, and he says that’s what strikes him every time about his colleagues. Every doctor is focused on providing high-quality patient care and service.

What are the costs associated with starting a Costco sublease?

The Independent Optometrist is responsible for their computers, EMR system, internet and any additional diagnostic instruments that they may want. Costco provides state of the art equipment and Optos is now included in the lease. (new leases)

“We have a clean, modern facility,” says Dr. Provost. “The equipment you start with is state of the art, and then you have the chance to add technology as you see fit.” As the scope of practice moves towards the medical model, so too do Costco subleases. Doctors are able to add all the technology they like—within the physical constraints of an office, of course.

“We’ve added additional technology that allows us to offer a higher level of medical care, and that solidifies our relationship with our patients,” says Dr. Provost. “Which is beneficial for the practice, Costco, and the patients!”

Assembling your office and your team

As a Costco sublease holder, you have a lot of autonomy. However, for new doctors looking to take their first steps into practice management, it’s good to know that Costco does provide resources and guidance for doctors setting up their subleases. Sublease holders are able to run their own hiring and HR within their practice with minimal input from Costco, but guidance is available when needed.

When Dr. Hofacre started her practice, she was provided with the contact information of a Costco representative she could contact when she needed help with any aspect of setting up her practice. Now, she’s often the point of contact for new doctors—while there are some things you can only learn through trial and error, it’s always good to be able to ask an experienced doctor or manager for advice.

When it comes to the administrative aspects of getting set up, Costco offers a lot of support. Through Costco.com services, they offer payroll processing, credit card processing. They also help with Vision Insurance connections.

“As optometrists, we have zero training with a lot of this stuff,” says Dr. Hofacre. “The hardest things to learn are all about managing employees, and that learning curve can be very costly. Having a strong relationship with your accountant, and finding a payroll service that can also help you with HR concerns can be a huge help there.”

She says that one of the biggest resources for her when she opened her practice was actually the Costco store manager—who wasn’t an optometrist, but had plenty of experience with management and HR under their belt.

“It’s a good idea to create a network of doctors who also hold Costco subleases,” suggests Dr. Hofacre. “That way you can bounce ideas off of one another and discuss any problems you’re having that they might have special insight on.”

Marketing and growing your patient base

As the holder of a sublease, you’re in charge of hiring, management, and marketing. This means that while Costco provides the physical space and the brand association, the individual marketing for your practiceis up to you.

This is a great opportunity to build your marketing skills as a business manager. Key aspects of optometry practice marketing include:

  • Your practice website
  • Marketing materials like logos, flyers, and business cards
  • A social media presence and patient reviews
  • Search engine optimization

And many other marketing tactics that can help your practice grow!

“Thousands of people every day walk into Costco,” says Dr. Provost. “But that’s where their marketing contribution to our practice ends. And for Costco, it’s all about the strength of branding—they don’t have commercials, or ads on bus stops or any of that. It’s all about customer loyalty and name recognition.”

For Dr. Provost, marketing his sublease isn’t just about ads and Yelp reviews—it’s also about building a community beyond the practice. “We reach out to the community by donating to causes that are important to our staff, and by partnering with Costco each year on charitable causes like the Children’s Miracle Network. We also donate to our local animal shelters and other community causes, which helps get our name out there.”

Of course, some of the best marketing is referral and word of mouth, so each patient is encouraged to let their friends or family members know that they can get an eye exam at Costco. It helps, of course, that Dr. Provost’s practice takes most insurances—it’s very easy to convince new patients to try them out, particularly with coworkers who have the same vision insurance through their work.

Practicing and a Typical Day

A typical day at a Costco sublease is up to the managing doctor!

Dr. Hofacre’s practice is open seven days a week, from 10am to 7pm. “If you have well-trained staff, it’s easy to see a lot of patients in a day—my goal is to see patients every 15 minutes,” she says. “And I have excellent staff who make achieving that very easy.”

At Dr. Provost’s practice, things are fairly similar—he says their hours are from 9am to 6pm, and each doctor aims to see 20 patients per day. The hours the practices are open are set by the sublease holder, in accordance with any state guidelines and available coverage by employees. Of course, Dr. Provost adds, best practice for a good business is to be open as much as possible during hours that are convenient for patients. The more that you’re there, the more patients you can serve—and the better it is for your business.

Dr. Provost always schedules time for walk-in patients, and has organized his practice and schedule to be able to efficiently care for walk-ins.

Of course, as the sublease holders, neither Dr. Provost nor Dr. Hofacre are seeing patients every day of the week. Both of them work from home a few days each week, focusing on business strategy, marketing, and goal-setting for the practice. “My advice for someone who’s new to managing a practice would be to make sure to set aside time to focus on the practice as a business rather than seeing patients,” says Dr. Provost. “That time is critical, even if it’s a few hours a day or one day a week.” They hire additional staff to cover the practice when they are away from the office.

What kind of patients will you see at a Costco sublease?

Each optometry practice will see a variety of different patients. Since it’s up to the lease holder’s discretion what technology to purchase and services to offer, patient needs can range from basic checkups to dry eye treatment to surgical co-management.

“I see patients from four years old to a hundred years old,” laughs Dr. Provost. “We still predominantly do wellness exams and routine care, but we’ve added some technology to expand into dry eye treatment, infections, and allergies, as well as co-managing cataract surgery.”

Co-management is a major focus for Dr. Hofacre, as well. She sees this as both an opportunity to offer better care to patients and grow practice revenue. “What’s going to be best for your patients? We’ve got the technology, and we're offering it to patients at a discounted price compared to a private office,” she says.

Generating Revenue

With a Costco sublease, Costco operates the retail side of the optical, so the optometry practice’s revenue is generated entirely through exams. “That’s the main reason you want to stay busy,” says Dr. Hofacre. “You need to pay everyone, and it’s all generated by services. Which is why it’s nice to be able to offer additional services like specialty testing.”

This is where choosing insurance panels and credentialing is key—Costco doesn’t mandate that sublease holders credential with specific panels, so it’s very much up to the doctors. However, Costco offers deals with many different insurance plans that subleasing doctors can take advantage of.

Marketing, and making sure your doctors are working to encourage patient retention and referrals, is also key here. Patients value an eye doctor who demonstrates that they care about their patients as people, rather than just as a set of eyes coming in to get an exam! “Once you start doing that,” says Dr. Provost, “You start delivering better eyecare, because the services that we offer can be tailored to your patient’s lifestyles, provided you know enough about them personally to do so!”

This can segue directly into educating your patients on the importance of the eye health exam. Costco recently distributed OPTOS machines to as many doctors in Costco subleases as possible, and that piece of technology is hugely beneficial in helping doctors give retinal health screenings.

“At the end of the exam, I remind all of my patients to come see us again in either six months or a year for their annual checkup, because maintaining eye health is so crucial. And in the last two years that we’ve done this, the number of people who have returned for exams has skyrocketed.” Return visits, of course, are an amazing practice builder!

Advice for Others

“I could not imagine practicing optometry if I wasn’t with Costco,” says Dr. Hofacre. “This can be a very challenging job, but if you like to be busy and to be responsible for how you deliver your patient care, this is an amazing setting for you.”

When it comes to advice for doctors looking to sublease with Costco, Dr. Provost suggests thinking of the opportunity as a business, not a job. It might mean some long hours at the start, but a sublease offers a level of autonomy and flexibility that employment can’t give you.

“It really requires planning, delegation, and team-building in order to be successful. It’s not a turnkey process, but it’s hugely rewarding,” he says. “Personally, I feel like it's the best opportunity out there, and I look forward to continuing to grow my practice with them for years to come.”

“My goal at Costco is to have every patient who leaves my office say, oh my gosh, what a great experience,” says Dr. Hofacre. “I hope to finish my whole career inside of Costco—it’s been a great place for me to develop a very successful business, and I don’t see myself doing it any other way.”

View Costco job openings:

Costco Optical prides itself on having some of the most knowledgeable employees in the optical industry. Our staff consist of trained opticians that are well regarded in the optical industry. Our members can feel confident that they are receiving the best care when visiting the optical department.

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About Antonio Chirumbolo, OD

Antonio works in Client Marketing at CovalentCareers. His passions are everything and anything digital media.

About Drew Provost, OD

Drew Provost, OD serves as Clinic Director at one of Austin’s most highly rated optometry practices; Great Hills Eye Care. He founded this two-location Costco affiliated practice in 2012. His practice is focused on routine wellness care, contact lenses, dry eye, and refractive surgery co-management with an emphasis on the use of technology to improve the patient experience.

In addition to clinical practice, Dr. Provost serves as an industry Professional Advancement Consultant, traveling and presenting on practice management and advancements in contact lens technology. He also serves on the board of the AACO (American Association of Corporate Optometrists).

Dr. Provost completed his undergraduate degree at The University of Georgia studying Sociology and Microbiology. He then graduated Cum Laude from Southern College of Optometry and is a Therapeutic Optometrist, certified by the National Board of Examiners in Optometry and the Texas Optometry Board.

When out of the office, Dr. Provost enjoys exploring the Texas hill country with his wife and two daughters.

About Marinda Hofacre, OD

Marinda D. Hofacre, OD is a graduate of Southern California College of Optometry. She has held a Costco sublease in Chino Hills, CA since 2001 and one in San Dimas, CA since 2010. She is an Advisory Board Member for NVISION laser eye centers, a member of AOA and COA, and has lectured for Alcon, Johnson & Johnson and NVISION Laser Eye Centers.


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