Forbes.com shared an article by contributor Carol Tice last week about why home healthcare franchises are growing exponentially. We hope to hear your feedback on the following excerpt. What do you think of this trend?
Why is home healthcare franchising on the rise? Here’s a quick snapshot of the unique opportunity in this fast-growing sector:
Lower investment. While it can cost $500,000 or more to open a fast-food franchise, most home-healthcare franchises cost $150,000 or less to start up, a feature that attracted Right at Home Seattle franchisee Ben Solomon, who owns two area territories and is buying a third. The investment is primarily for hiring marketing, recruiting and training staff, and for office space.
High revenue. From that relatively low investment, home-health franchises can drive a lot of volume, especially after the first year’s ramp-up making connections with key referrers such as elder-law attorneys and social workers. Territories are usually large. Industry research firm Home Care Pulse found median franchise home-health revenue was nearly $2 million. What’s more, franchise owners brought in substantially more than independent operators, Home Care found, giving their businesses a resource advantage over the competition.
Growing demand. Demand is forecast to grow sharply, thanks to the aging of baby boomers. The number of people over age 60 is set to triple to 2 billion by 2050, the UN estimates.
International opportunity. Most US franchises are just beginning to look overseas at opportunities, with Right at Home being one of the leaders — it recently became the first US home-healthcare franchise to enter China. But the rest of the world is aging, too, to there is still plenty of growth opportunity in new markets.
Help with red tape. Mom-and-pop home healthcare operators struggle to keep up as national, state and local laws evolve. For instance, my home base of Seattle is currently debating a possible $15-an-hour minimum wage law. Independents are also hard-pressed to obtain insurance to cover their workers’ activities in clients’ homes. By contrast, franchises become well-known to insurers, smoothing the way for policies, says Right at Home CEO Allen Hager. National chains also have the money to do lobbying and advocate for favorable laws — most recently, against the proposed federal minimum wage increase.
Chance to do good. Seattle Right at Home franchisee Solomon says helping seniors stay in their own homes affordably is more than a business — it’s a community service. “I feel great doing this,” he says.