2012 SPECIAL REPORT
SENIOR CARE
FRANCHISES
www.FranchiseBusinessReview.com
2012 SPECIAL REPORT: Senior Care Franchises
SENIOR CARE
FRANCHISES
Top Senior Care Franchises
Home Instead Senior Care*
Visiting Angels
Homewatch CareGivers*
ranchise Business Review released its first report on the senior care
franchising sector two years ago. Since then, the industry has only grown
in popularity—for both franchise owners and consumers. In the past two
years, we’ve seen the number of senior care companies on our annual list of
top franchises grow, and we’ve seen franchisee satisfaction in the sector as a
whole continue to go up.
Right at Home
BrightStar*
FirstLight HomeCare*
Caring Senior Service
Home Care Assistance
Nurse Next Door
CarePatrol
*To view this company’s satisfaction report, visit
www.FranchiseBusinessReview.com.
This report is designed to give you a high-level look at the senior care
franchising sector. (It is important to note that by “Senior Care,” we mean
franchise companies that provide home care services.) We will explore what
services the sector provides, what’s involved from an investment standpoint,
what the “typical” franchisee looks like, and how franchisee satisfaction in
the sector has fared in the past year. We will also forecast where we think the
senior care franchising sector is going, and we’ll identify the top senior care
franchises based on our franchisee satisfaction research.
Who We Are
Franchise Business Review is a national market research firm that performs
independent research of franchisee satisfaction. Our products include
franchisee satisfaction reports, economic impact studies, and sector studies.
Methodology
To compile the data this report, we surveyed 1,348 franchisees from the
senior care sector and researched more than 30 brands. We also talked to
CEOs at some of the top senior care franchises for their in-the-trenches take
on the industry.
To survey franchisees, we email our survey to all active operators within a
system. Franchisees answer 33 benchmark questions ranking their franchise
system in the areas of financial opportunity, training and support, leadership,
operations and product development, core values (e.g., honesty and
integrity of franchisor), general satisfaction, and the franchisee community.
An additional 19 questions ask franchisees about their market area,
demographics, business lifestyle, overall enjoyment running their franchise,
and role in the franchisee community. From this data, we identify our list of
franchises with above average satisfaction.
Cover photos courtesy of (clockwise from left): Right at Home,
Interim Healthcare, Brightstar, FirstLight HomeCare.
2 For more information on this report, visit: www.FranchiseBusinessReview.com
2012 SPECIAL REPORT: Senior Care Franchises
Ted Bernhardt
Right at Home
Photo courtesy of Right at Home
Models/Concepts
In the last two years, the definition
of senior care and the core services
provided by senior care franchises
have broadened. Whereas most of
the companies we talked to in 2010
provided primarily non-medical,
in-home care (e.g., meal preparation,
grooming, bathing, transportation,
companionship) for seniors, many of
the companies we talked to this year
have added new services (e.g., medical
care, staffing solutions, child and pet
care). While the sector is still widely
called “senior care,” we recognize
that it encompasses much more than
that. (We use the terms “senior care”
and “home care” interchangeably
throughout this report.)
“Maybe 6 to 8 years ago, senior care
or home care was defined more
narrowly as seniors but now I think
we all realize that there’s a more
diversified client base out there—
it’s not just seniors,” said Jeff Bevis,
president and CEO of FirstLight
HomeCare.
FirstLight offers non-medical home
care and just added dementia care to
its services in response to requests
from clients and family need.
Home Instead Senior Care, Franchise
Business Review’s 2012 top senior
care company for franchisee
satisfaction, recently added an
Alzheimer’s program called “CARE”
(Changing Aging through Research and
Education) to its model, which Global
Operations COO Yoshino Nakajima
says has become increasingly popular
with both clients and franchisees.
BrightStar, another leader in the
home care space, has offered
different services beyond senior care
since Shelly and JD Sun launched
the business in 2002. BrightStar COO
Brian Schnell says the company calls
its service offering “lifecare” because
their franchisees provide services to
clients of any age, from child to adult.
While companies like BrightStar and
FirstLight have broadened the senior
How long have you been a franchisee?
Opened in 2004
Why did you decide to buy a franchise?
Two reasons motivated me. First, I wanted to own
my own business and make a contribution to my
community. Secondly, this is a feel-good business,
and the rewards go beyond a paycheck.
Why did you choose your franchise?
After looking at many different franchise models,
I zeroed in on home care. I was motivated by the
strong recommendation of a colleague, who had
purchased a Right at Home franchise in 2003.
What is the best part of being your own boss?
I spent my whole career making my boss look
good, but now I can enjoy leading and developing
others to reach our business goals. Hey, now they
can make me look good...
What is the worst part of being our own boss?
The worst part about being a boss is firing employees. The other challenging aspect is handling the
responsibility of running the business profitably
for the caregivers and families that rely on us.
Where do you see yourself in five years?
My kids are still young so I expect I will still
be growing this business. There is also a good
chance I might hire a general manager so that I
could spend more time traveling.
What advice do you have for prospective
franchise buyers?
No doubt the demographics for home care look
promising and you definitely can make a living.
However, I wouldn’t bother if you don’t think helping seniors will be rewarding. To date, this business
is based on trust, so establishing relationships
within the healthcare community is a must.
For more information on this report, visit: www.FranchiseBusinessReview.com
3
2012 SPECIAL REPORT: Senior Care Franchises
Interim Healthcare—one of the
oldest companies in the home care
space—has a similar model for
franchisees.
Photo courtesy of FirstLight HomeCare
care definition to serve an expanded
customer base, there are others that
have stuck to the traditional seniorcare-only model.
“Our care in our system is all about
senior care. We don’t add in pet care,
kid care—it’s senior care. That’s what
we’ve been doing for 15+ years,” said
Michael Newman, president and CEO
of Always Best Care.
Always Best is one of only a few
companies in the senior care space
that offers both non-medical and
medical care to its clients. However,
new franchisees don’t start out
offering all levels of care. Newman
told us that new franchisees start
out offering only non-medical and
assisted living placement services,
and then add skilled nursing care
once they are established.
“Interim has always been a fullservice provider,” said president
and CEO Kathleen Gilmartin. “Our
franchisees are granted the rights to
go up that escalator and offer that
continuum, but they start at the level
of personal care and support, which
is really the building block of home
care. This takes them to getting the
first floor of the house built, and then,
if they want to add on to the next
level of complexity, they can.”
(Note: Interim Healthcare utilizes
a customized FBR survey with its
franchisees and is therefore not
eligible for our annual franchisee
satisfaction awards program. However,
the company consistently does well
in the area of franchisee satisfaction.)
TURN RIGHT.
Take control of your financial future with Right at Home. In as little as 120 days, you can
join the other 200+ Right at Home franchisees who have already benefited from aligning
themselves with us, the leader in senior care.
• $1,036,380 average annual revenue per office *‡
• Franchisees yield an average gross margin of 37%.**‡
• Right at Home boasts a 17% year-over-year revenue
increase record, even in a troubled economy ***‡
“We’ve had several businesses before, and the thing I find remarkable about this sector is the quality of the people.
They truly have a heart for helping seniors. It’s not just running a for-profit business, but it’s giving back…
it’s not just success – it’s significance.”
— Tom Bollum, Roseville, CA
Take the right turn to Right at Home
call 1-877-697-7537 or go online to www.rightathomefranchise.com.
*Net Billings in 2011 for 191 Offices open one year or more as of December 31, 2011. 66 or 35% of these Offices attained or surpassed the represented level of financial performance.
**Average Gross Margin in 2011 of all 191 Offices open one year or more as of December 31, 2011. 87 or 57% of these Offices attained or surpassed the represented level of financial performance.
*** Based on Average Net Billings Percent Increase from 2010 to 2011 of 191 Offices open one year or more as of December 31, 2011.
‡ Actual results vary from business to business. There is no assurance that your Franchised Business will do as well as those Offices referenced above.
Right At Home, Inc. 6464 Center Street, Ste 150, Omaha, NE 68106 MN F-4053. This information is not intended as an offer to sell, or the solicitation of an offer to buy a franchise, it is for information purposes only.
4 For more information on this report, visit: www.FranchiseBusinessReview.com
2012 SPECIAL REPORT: Senior Care Franchises
“The biggest economic hurdle our
franchisees have faced is access to
credit,” said BrightStar’s Schnell.
“We have been extremely proactive
in helping our franchisees find
solutions … We were the first
franchisor accepted into Franchise
America Finance’s SBA program
whereby franchisees have financing
available to them if they meet
certain qualifications. We also are
working on an accounts receivable
finance program, which is important
for franchisees in this industry.”
Photo courtesy of BrightStar
“Home care gets into your blood. I see a real passion
for the industry with all of our owners.”
Brian Petranick, Right at Home
Investment
From an investment perspective,
owning and operating a successful
senior care franchise can be
very fulfilling. The median initial
investment required to open a
single senior care franchise office in
2012 is $66,148, and the potential
return on investment is significantly
higher than many other franchise
businesses. It is not uncommon
among the top senior care franchises
to build gross revenues to a million
dollars or more, with gross margins
of 30%–40%. Compare that to many
food and retail franchises that require
an initial investment that can easily
exceed $500,000 and operate with
slim margins and you will quickly see
what makes senior care franchises so
attractive.
Senior care, like all franchising
sectors, has felt the impact of the
recession in terms of financing. It is
much more difficult for prospective
franchisees to access capital than
it was five years ago, so while the
return on investment might be better
than other sectors, it’s no easier for
a potential franchisee to borrow that
initial investment. Many franchisors
have made changes at the corporate
level to help ease this burden.
BrightStar is also one of many
franchise companies that has
increased its financial requirements in
order to ensure that new franchisees
are properly financed to survive and
thrive in a struggling economy.
“Although our initial investment has
not changed dramatically, we are
extremely mindful of the investment
needed for franchisees to get beyond
the initial three to six months in
business and disclose in our FDD the
estimated initial investment for the
first year,” Schnell said.
Along these lines, BrightStar
increased its net worth requirements
Investment Levels for FBR’s Top Senior Care Franchises
Home Instead Senior Care
$50,550 – $63,550
Visiting Angels
$55,285 – $76,035
Homewatch CareGivers
Right at Home
BrightStar
$90,000 – $140,000
$63,590 – $99,680
$95,067 – $162,158
FirstLight HomeCare
$68,060 – $94,265
Caring Senior Service
$50,905 – $65,255
Home Care Assistance
$20,000 – $250,000
Nurse Next Door
Care Patrol
$122,850 – $163,150
$45,000 – $72,000
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5
2012 SPECIAL REPORT: Senior Care Franchises
from $250,000 to $500,000 in 2009
and increased the required minimum
credit score for potential franchisees
who need to borrow money to finance
their business.
From a time perspective, senior care
requires a significant investment. All
of the executives we spoke with said
they require franchisees to focus on
the business full-time from the start,
and they emphasized the amount of
time that must be invested early on
to be successful.
“Similar to any business you would
start on your own in any industry,
you may work as hard as you’ve ever
worked in your life,” said FirstLight’s
Bevis. “I think you go into it with the
understanding that you’re going to
work probably 10 to 12 hour days at
least five to six days a week for first
four to six months.”
Lisa Ganem, a Home Instead franchisee
in New Hampshire, estimates that
she worked approximately 60 hours a
week (both weekends and weekdays)
when she started her business 10
years ago. Then, for a period of time,
she says she was able to cut back, but
that all changed in 2008 when the
stock market crashed. Now, she’s back
to 60-hour weeks, trying to mentor
and cultivate her team and constantly
reach out to consumers. Ganem says
that although the senior care industry
is somewhat recession-resistant, her
client base is not. People don’t have
the funds they expected to have to
care for their aging loved ones, which
Top 5 Most Profitable Sectors vs. Median Initial Investment
Annual Profit*
Median Investment**
$350,000
$300,000
$250,000
$200,000
means franchisees like Ganem must
invest more time reaching out to
consumers and educating them
about home care.
Pros/Cons
The senior care sector consistently
scores well on Franchise Business
Review’s franchisee satisfaction
surveys and that’s largely because of
the “pros” that the sector provides—
both in terms of lifestyle and
financial rewards. Senior care is one
of the few industries that combines
a “feel good” service offering with
attractive unit economics.
Although it is a business that requires
a significant time investment, senior
care does provide relative scheduling
flexibility once your business is
established and you have the right
employees (especially managers)
in place. Many franchisees are
able to initially work out of a home
office, which keeps the initial cash
requirements low, and the senior care
market is one that continues to grow
and prosper despite what’s going on
in the world economy. For all of these
reasons and more, senior care is one
of the most profitable sectors.
Financials aside, perhaps the biggest
“pro” for the senior care sector is that
franchisees have the opportunity
to develop strong ties to their
communities and their clients.
$150,000
$100,000
$50,000
Senior Care
Food &
Beverage
Business
Services
Automotive
Cleaning &
Maintenance
*Annual Profit is based on average annual pre-tax earnings information reported by franchisees in Franchise Business Review’s satisfaction
survey. This data includes multi-unit owners and is not an estimate of individual unit performance. **Median Investment is the median initial
investment level of the award-winning franchise companies within a given category, and not the median of the entire industry segment.
6 For more information on this report, visit: www.FranchiseBusinessReview.com
“Home care gets into your blood,” said
Right at Home president and COO
Brian Petranick. “I’ve been doing it for
twenty years, and it is one of those
professions you learn to love. I see a
real passion for the industry with all of
our owners.”
“I’ve probably never felt this fulfilled
before,” said Home Instead franchisee
2012 SPECIAL REPORT: Senior Care Franchises
Ganem. “You’re bettering people.
You’re helping someone maintain
independence, age where they want
to age… you help families, too, who go
through hard times. You’re affecting
them to in a positive way.”
That’s not to mean it’s not a lot
of work. In the past few years,
competition in the market has
heated up.
“It’s getting harder and harder to
differentiate yourself in the space
because there are over 40 brands
now where 10 years ago there were
half a dozen,” Petranick said. “There’s
a lot more noise in the marketplace.
It’s harder for the consumer to
differentiate the differences between
companies and their offerings.”
Other typical challenges for
franchisees in the senior care sector
include staffing-related issues
“This isn’t like we all sing ‘Kumbaya’ every day –
it’s frantic, it’s crazy...But at the end of the day,
you know you have a sound business that delivers
a quality service, and you respectfully make a profit
on that business to be able to earn livings and
employ people.” Kathleen Gilmartin, Interim Healthcare
(e.g., caregiver hiring and training,
turnover, management problems),
the 24/7 nature of the business (a
franchisee is always on-call to some
level), and ever-increasing federal/
state/local regulations and
licensing requirements.
“No matter how technology changes,
no matter how many leads are
generated, at the end of the day, you
have to go out there and build trust
and give good service. That makes
it time-intensive,” said Always
Best’s Newman.
Based on our 2012 survey,
franchisees in senior care work
more hours (including more nights
and weekends) as compared to
franchisees in other business sectors.
Senior care franchisees also rated
their “work-life balance” lower
than franchisees in all sectors.
At the heart of it, senior care may
“feel good” but it’s not necessarily
an easy business.
“This isn’t like we all sing ‘Kumbaya’
every day – it’s frantic, it’s crazy, you
see circumstances that really make
your heart skip a beat,” Interim’s
Join America’s First and Finest Healthcare Franchise.
Founded in 1966, Interim HealthCare Inc. is the most established
healthcare franchise organization in the country, offering a full range
of home care and healthcare staffing services. No other home care
franchise offers you this depth of operational support, experience and
sophisticated technology.
• Average franchise tenure of 20 years
• Turnkey business model
• Comprehensive onsite and in-field training
• Protected franchise territory
• Extensive sales and marketing support
• Financing available*
“It is, without a doubt, one of the
best ways to gain more control over
your future and have the ability to
directly impact your personal and
financial success.”
-Kathleen Gilmartin
President and CEO of Interim HealthCare Inc.
Get started today. Call 888.826.8312 or take our
virtual tour at InterimFranchising.com.
©2012 Interim HealthCare Inc. This material does not constitute a franchise offering. Interim HealthCare franchises are offered solely by means of our Franchise Disclosure Document.* For qualified buyers.
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4/16/12 8:55 AM
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7
2012 SPECIAL REPORT: Senior Care Franchises
Gilmartin said. “But at the end of
the day, you know you have a sound
business that delivers a quality
service, and you respectfully make a
profit on that business to be able to
earn livings and employ people. It’s
kind of the whole circle that makes
so much sense in this business.”
Market Analysis
Much has been written about
the promise of the senior care
franchising sector since we released
our last report. The population
of seniors (age 65+) is expected
to double in the next 25 years,
according to the U.S. Census Bureau,
and the average life expectancy
continues to increase. When you add
in the home care services segment
for non-seniors (medical and nonmedical services provided to clients
for market share. We did not see
as much in the way of mergers and
acquisitions in the past two years as
we expected, and the top franchise
brands from two years ago remain
largely the same today. The CEOs
we interviewed predicted that any
“There are not as many places for
consolidations that might occur in
people to go,” said Right at Home’s
this sector in the near term will be
Petranick, speaking about the
growing need for home care services. in the certified home care space—
providers that are reimbursed
“There are not enough beds to
handle the demand. More people are through Medicare and Medicaid
going to have to get care in the home rather than private pay (the typical
model for franchised senior
whether we want them there or
care companies).
not. All of the macro-environmental
factors are pushing for care in the
“As you look at some of the public
home environment.”
sector companies that are in home
care, they have appetite and they
The home care industry is highly
can get scale and leverage resources
fragmented, with over 35 different
when they can see an opportunity to
franchise brands and many more
non-franchise businesses competing have some of those consolidations
with smaller providers,” said
Interim’s Gilmartin. “In the sector of
non-medical/personal care, I think
there’s still pretty much an open
field for growth. I have not witnessed
a lot of consolidation.”
with acute care needs, long-term
health conditions, permanent
disabilities, or terminal illnesses),
the market opportunity increases
significantly.
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8 For more information on this report, visit: www.FranchiseBusinessReview.com
As Right at Home’s Petranick
mentioned above, we expect to
continue to see new franchise
start-ups entering the market
and competing for demand for
services. While young and unproven
franchise systems present a higher
investment risk to a prospective
franchisee candidate, start-ups
typically have the advantage of
offering more flexible terms and
larger protected territories to their
first franchisees. Whether or not
you consider a start-up in your
franchise opportunity search
depends greatly on your comfort
with risk and your confidence in
your own skills as an entrepreneur
and business owner.
2012 SPECIAL REPORT: Senior Care Franchises
Photo courtesy of Interim
Franchisee Attributes
The home health business is
extremely people dependent—with
small offices typically managing 50
or more caregivers and large offices
exceeding several hundred. People
researching a franchise in this space
should be aware that it is a highly
personal business that operates 24
hours a day, 7 days a week. Caregiver
issues, service emergencies, and
client deaths can be frequent
occurrences.
While running a senior care
business requires empathy and
people management skills, it does
not necessarily require healthcare
experience. The executives we
spoke with for this report said
their franchisees have a variety of
backgrounds and expertise—not
always in healthcare. What successful
franchisees do have, however, are
strong skills in networking, marketing,
and operating a business.
Characteristics of Senior Care Franchisees
76%
Have been in business for less than five years
57%
Are in big markets with a population of at least 250,000 people
65%
Are over the age of 45
86%
Are Caucasian
74%
Are female and have at least a bachelor’s degree
(vs. 57% in all of franchising)
“I suppose if I had to pick, I would go
first with the business background
and expertise, and we’ll teach
franchisees the home care,” said
Petranick of Right at Home. “We
can teach our franchise owners in a
relatively short amount of time how
to operate a good quality home care
business…But having that person
go from a $1 million office to a $3
million office has a lot less to do
with knowing home care and a lot
more to do with how you execute the
business model.”
Home Instead franchisee Ganem
is one of those franchisees whose
background helped her to be
successful. Ganem, who expects to
bring in about $3 million in revenues
this year, is a former corporate
CFO, and she says her business
experience was critical
to her success.
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9
2012 SPECIAL REPORT: Senior Care Franchises
“You really are starting a business
as if you were putting out your own
shingle,” Ganem said. “As a business
person I could look at the model.
I understood it from a financial
perspective … But it’s complicated.
It’s not flipping burgers. Every state
has different regulations, a different
culture, a different community.”
ones. Brightstar’s Schnell told us
that approximately 85% of their
franchisees sought in-home care
services for a loved one in the 24
months prior to becoming
a franchisee.
It goes without saying that, apart
from their personal or professional
background, franchisees in any sector
One anecdotal statistic that came out must be comfortable following the
of our interviews with CEOs is that,
franchise model.
while franchisees in the senior care
space don’t always have professional “If they can follow a system, they
healthcare experience, many have
have a skillset that says they can
had personal experience researching digest information and they can
and accessing home care for loved
execute policies and procedures,”
In 2012, senior care franchisees rated their
satisfaction higher than the benchmark in every
category of FBR’s survey.
said Interim’s Gilmartin. “But if
there’s a tendency to not want to
follow a system—create everything
brand new—that’s problematic.”
To ensure that prospective
franchisees know what they are
getting into when they buy a senior
care business, Interim Healthcare
and some other home care
companies have made changes to
their franchise sales process.
“We’ve made changes that engage
our prospects a lot sooner and give
them an opportunity to get to know
both the sector and our brand in a
way that employs technology, a lot
more interaction, even meeting folks
without it being a formal Discovery
Day. That helps people see the real
picture of what this service line looks
like,” Gilmartin said.
Franchisee Satisfaction
Senior care consistently comes
out as one of the top 5 sectors for
franchisee satisfaction in Franchise
Business Review’s annual survey. In
fact, in 2012, senior care franchisees
rated their satisfaction higher than
the benchmark in every category
of our survey: Training & Support,
Franchise System, Leadership,
Financial Opportunity, Core Values,
and Franchise Community. Overall
satisfaction in the senior care
space was 11% higher than our
benchmark.
Although it can be a very
demanding, hands-on business,
senior care franchisees appear to
be very satisfied both emotionally
and financially, and that satisfaction
seems to only increase every year.
Overall satisfaction in 2012 is up
5% from 2011.
10 For more information on this report, visit: www.FranchiseBusinessReview.com
2012 SPECIAL REPORT: Senior Care Franchises
Most Popular Sectors
by Franchisee Satisfaction
1 Cleaning & Maintenance
2 Fitness
3 Health & Beauty
4 Pet Services
5 Senior Care
Summary
Senior care has proven itself to
be one of the strongest sectors in
franchising. What two years ago may
have looked like a “safe” industry
in a down economy is today one of
the hottest sectors, offering some
of the best franchise opportunities.
The demand for services will likely
remain strong for many years
to come.
will need to work extra hard to make
their business stand out among
others. But with the right support
people, a strong focus on delivering
exceptional care, and the right
franchise brand, franchisees in this
sector have the potential for a very
successful business.
Of course with any growing business
sector, competition in this space will
undoubtedly increase. Franchisees
As we caution with every franchise
model in every sector: Not all
franchises are created equal.
Photo courtesy of Right at Home
Many franchise companies in this
sector offer only an average or
even below average investment
opportunity, so it is important to
do your homework, talk to current
franchisees, and be sure the brand
is a good fit for you.
For more information about
Franchise Business Review’s research
or the companies in this report, visit:
www.FranchiseBusinessReview.com.
Download detailed satisfaction reports
on these senior care franchise brands at:
www.FranchiseBusinessReview.com
For more information on this report, visit: www.FranchiseBusinessReview.com
11