Home care franchises are hot, hot, hot
The home care industry has enormous potential for business people. One segment of the business world has already figured this out: franchise business owners.
"Home health care franchises are thriving due to a growing demand for their services derived from both demographic and economic factors, including an aging population, the rising cost of traditional care and a desire by many seniors to receive 'in-home' care rather than receiving care in a nursing home," said Matthew Haller, vice president, public affairs and chief of staff to the president and CEO of the International Franchise Association, a member organization representing the franchising industry.
Last spring, Entrepreneur.com listed home care service franchises for senior care as one of the hottest franchise sectors to watch. The magazine noted that the home care franchise sector, although hardly making a blip 15 years ago, is the single largest category in its Franchise 500 - a ranking of the country's top franchise opportunities - with more than 34 companies represented in the ranking process and 24 of those actually making the ranking.
Around the same time, the Franchise Business Review, a national market research firm researching franchisee satisfaction, ranked home care franchises for senior care as one of the top five most profitable franchise sectors.
"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," noted FBR's senior care franchises report. "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 to 40 percent."
"Home care in general is just exploding," said Shelly Sun, the CEO and co-founder of BrightStar Care, a leading home care franchise. She expects continued rapid growth through 2050, due mostly to the aging population.
But the key to continued success is not in demographics alone. "Home care is going to be a great industry," she said, "but I think where the real value is going to be is in the ability to influence patient outcomes, and that is going to be with nurses and high clinical oversight and coordinated programs."
Home care franchises have historically not required a background in healthcare to make a go of it. But Sun believes offering families a full-service experience, from the traditional personal care services to skilled medical services, is what will give companies like hers an edge.
"I think what you'll start to see are companies that are really focused only on companion care and personal care versus being able to have the skilled care and nurse oversight differentiation losing market share to BrightStar and companies like BrightStar that have the clinical component to our business model," she said. "If I was looking to invest in the sector, I'd want to be looking at companies that are able to influence the entire continuum of care, not just the companion care, which is where a lot of the industry has been."