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									SPECIAL REPORT | August 2010

Senior Care and
Home Healthcare Franchises
Many industries have experienced flat or even negative growth over the                  “From an investment
past few years, yet the senior care / home healthcare sector continues to
perform solidly. In fact, senior care has been one of the fastest-growing
                                                                                        perspective, owning
franchise segments in recent years. In this report we will explore the op-              and operating a
portunity of investing in a home healthcare franchise, the pros and cons,               successful senior
understand how the business model works, forecast where we think the                    care franchise can
home healthcare market is going and look at the skills and characteristics
it takes to be a successful senior care franchise owner and operator.
                                                                                        be very fulfilling both
                                                                                        emotionally and
We will also highlight some of the leading franchise opportunities in the
senior care / home healthcare segment and break them down by various
metrics. This report is designed to give you a high level look at the senior
care franchise sector. For a more detailed assessment of any of the fran-
chise companies operating in this sector, we encourage you to purchase
one or more of our FBR Franchise Investment Guides which will give you
a much more detailed view of each senior care franchise company and
how they stack up to the competition. For more information on our guides,
please visit

  Senior Care and Home Healthcare Franchises Researched for this Report Include
  Accessible Home Healthcare              Homewatch CareGivers
  Always Best Care Senior Services        Interim HomeCare
  BrightStar Healthcare                   Right at Home
  ComForcare Senior Services              Sarah Adult Day Services
  Comfort Keepers                         Senior Helpers
  FirstLight HomeCare                     Seniors Helping Seniors
  Griswold Special Care                   Spectrum Home Services
  Home Care Assistance                    Synergy HomeCare
  Home Helpers                            The Senior’s Choice Inc.
  Home Instead Senior Care                Visiting Angels... and 15 other franchises

                                        Services                                                                        Like any small business, building a suc-
                                        The core services provided by the fran-                                         cessful senior care franchise requires a lot
                                        chises in this segment focus primarily                                          of time, commitment and hard work,
                                        around non-medical, in-home care for                                            especially in the first few years. That said,
                                        seniors, such as meal preparation, groom-                                       the potential return on your investment
                                        ing, bathing, transportation and compan-                                        is significantly higher than many other
                                        ionship. Some offer skilled medical care                                        franchise businesses. It is not uncommon
                                        including assistance with medications,                                          among the top senior care franchises to
 Top Senior Care Franchises             wound care, physical therapy and other                                          build gross revenues of the business to
 by Franchisee Satisfaction             medical services. A growing number also                                         several million dollars, with gross margins
 (as of 8/2010)                         offer full medical staffing solutions for                                        of 30–40%. Compare that to many food
 ►Home      Instead Senior Care         nursing homes, hospitals, assisted living                                       and retail franchises which require an
                                        facilities, schools, doctor offices and other                                    initial investment that can easily exceed
 ►Synergy         Homecare              healthcare providers. While the primary                                         $500,000 and operate with slim margins
 ►Visiting Angels                       focus is on delivering services for seniors,                                    and you will quickly see what makes
                                        most companies provide home healthcare                                          senior care franchises so attractive.
                                        services to non-seniors as well, including
 ►Right    at Home                      services for acute illness, long term health                                    Pros
 ►Brightstar       Healthcare           conditions, disabilities, hospice services                                      In addition to attractive unit economics,
                                        and pediatric care. Throughout this report                                      for the right person, the senior care busi-
                                        we use the term senior care and home                                            ness offers relative scheduling flexibil-
                                        healthcare interchangeably.                                                     ity (once your business is established),
                                                                                                                        limited time requirements on nights and
“The potential return                   Investment                                                                      weekends (with a good manager/systems
                                        From an investment perspective, owning                                          in place), and an opportunity to get out
 on your investment                     and operating a successful senior care                                          into your local community and build strong
 is significantly higher                 franchise can be very fulfilling both emo-                                       emotional bonds with clients. Ultimately, it

 than many other                        tionally and financially. The initial invest-
                                        ment required to open a single senior care
                                                                                                                        is this emotional connection to clients and
                                                                                                                        community, as well as a strong internal
 franchise businesses.                  franchise office averages under $100,000                                         drive to help people, that generates high

 It is not uncommon                     and can be as little as $50,550 with
                                        Home Instead Senior Care, which offers
                                                                                                                        satisfaction levels among many senior
                                                                                                                        care franchise operators – regardless of
 among the top senior                   one of the lowest initial investments and                                       their business’s financial performance.
 care franchises to                     the highest yield ratios (Average Unit Rev-                                     Like many service-based franchises, many
                                        enue / Average Investment) in the group                                         new franchisees choose to start by work-
 build overall revenues                 and has also been ranked best in category                                       ing out of a home office, which helps keep
 of the business to                     for franchisee satisfaction since 2007.                                         the initial cash requirements low.

 several million dollars”               Top Senior Care Franchises by Yield Ratio1 (as of 12/2009)
                                          Franchise Brand                                    Investment $                         Avg Unit Rev $              Yield Ratio (Rev/Inv$)
                                          Home Instead Senior Care                                 $57,050                           $1,114,822                                   19.5
                                          Griswold Special Care                                    $72,500                           $1,226,107                                   16.9
                                          Interim HealthCare                                     $152,000                            $1,565,291                                   10.3
                                          Visiting Angels                                          $68,160                              $661,881                                    9.7
                                          Right at Home                                            $81,635                              $770,101                                    9.4
                                        1. Yield Ratio is defined as the average initial investment divided by the average unit revenue of a franchise business. This ratio is used to compare
                                        the potential return on investment (ROI) of a business. Businesses within a specific sector typically are valued at a similar multiple of revenue.
                                        Therefore, in theory, a higher Yield Ratio would translate into a higher percentage return on your investment. Caution: profitability, market conditions,        and other factors will also contribute to the business’s potential ROI.
                                                                                 FranchiseBusinessREVIEW               | August 2010                             | SPECIAL REPORT: SENIOR CARE FRANCHISES

Senior Care Franchise Sector Growth by Units and Revenue2 (as of 12/2009)                                                                                            Largest Senior Care
                                                                                                                                                                     Franchises by U.S. Units
               4,000                                                                                                          $140M                                  (as of 12/2009)

                                                                                                                                         System Revenue Growth
               3,750                                                                                                          $130M                                  ►Home        Instead .........................585
 Unit Growth

               3,500                                                                                                          $120M                                  ►Comfort        Keepers ....................559
               3,250                                                                                                           $110M                                 ►Visiting Angels ........................377

               3,000                                                                                                          $100M                                  ►Home        Helpers ........................325
               2,750                                                                                                            $90M                                 ►Interim      HealthCare .................294
                           2007                                     2008                                      2009                                                   ►Senior       Helpers........................270
Unit Growth                       System Revenue Growth                                                                                                              ►Right      at Home ........................206
2. Unit growth and system revenue growth are aggregate numbers from the 25 largest senior care franchise brands, which represent over 90% of the
franchise market segment. System revenue growth numbers are based on the gross revenues of each corporate organization, and not the aggregate                        ►Homewatch            CareGivers .........160
of individual franchise unit gross revenues. The compound annual growth rate (CAGR) for franchise units during this 3 year period was 9.4%. The
CAGR for gross system revenue during this same period was 11.6%.
                                                                                                                                                                     ►The      Senior’s Choice ...............154
Cons                                                                       care services is going to grow substantially
                                                                                                                                                                     ►Brightstar        Healthcare..............141
The typical challenges facing senior care                                  for the foreseeable future. When you add
franchise operators include caregiver hir-                                 in the home healthcare services segment
                                                                           for non-seniors (medical and non-medi-
ing and management issues, high turn-                                                                                                                                Largest Senior Care
over, continuous training of staff, on-call                                cal services provided to clients with acute                                               Franchises by Revenue3
24/7, federal/state/local regulations and                                  care needs, long term health conditions,                                                  (as of 12/2009)

licensing requirements, high accountability                                permanent disabilities or terminal ill-
                                                                                                                                                                     ►Home        Instead .................. $35.6M
and legal responsibility for services. The                                 nesses) the market opportunity increases
                                                                           significantly.                                                                             ►Interim      HealthCare .......... $24.1M
sector as a whole will face more and more
government regulation in the future in an                                                                                                                            ►Visiting Angels ...................          $9.6M
                                                                           The senior care / home health care
effort to help keep seniors safe from the                                                                                                                            ►Comfort        Keepers ............... $9.4M
                                                                           industry is highly fragmented, with over
unethical practices of businesses out to
                                                                           35 different franchise brands and many                                                    ►Right      at Home ................... $8.2M
make a quick buck. Additionally, short-
                                                                           more non-franchise businesses competing
ages of caregivers and medical staff will                                                                                                                            ►Brightstar        Healthcare......... $7.0M
                                                                           for market share. And while “first-mover”
continue to drive above-average wage                                                                                                                                 ►Home        Helpers ................... $5.3M
                                                                           Interim Healthcare got started over forty
increases, putting pressure on business
                                                                           years ago and Homewatch CareGivers                                                        ►Senior       Helpers................... $5.2M
profit margins and pushing the cost of
                                                                           in the early-80’s, many of today’s rapid
home healthcare out of reach for many                                                                                                                                ►Griswold         Special Care ....... $4.5M
                                                                           growth senior care opportunities, including
Americans.                                                                                                                                                           ►Homewatch
                                                                           Brightstar Healthcare, Senior Helpers and                                                                       CareGivers .... $4.2M
                                                                           Synergy Homecare have been franchis-
Market Analysis                                                            ing for less than a decade. Non-fran-
                                                                                                                                                                     3. System revenue numbers list above are based on the
                                                                                                                                                                     gross franchise revenues of each corporate organiza-
                                                                                                                                                                     tion, and not the aggregate of individual franchise unit
The senior care industry is a vibrantly                                                                                                                              gross revenues. The source of these numbers is the
                                                                           chise brands in the sector include public                                                 audited financial statements of each organization, as
growing, multi-billion dollar segment of                                                                                                                             published in their 2010 franchise disclosure document.
                                                                           company giants like Sunrise Senior Living                                                 During 2009, Griswold Special Care consolidated
the U.S. Economy. Interim HealthCare                                                                                                                                 several corporate entities, which dramatically increased
                                                                           (NYSE: SRZ) and National Healthcare Cor-                                                  their overall corporate gross revenues which were
President and CEO Kathleen Gilmartin                                                                                                                                 reported. The number above is our best estimate of true
                                                                           poration (AMEX: NHC), yet that vast major-                                                gross revenues from 2009 franchise operations.
told us “the industry has nowhere to go
                                                                           ity of senior care services are provided by
but up over the next 10–15 years” and we
                                                                           “mom and pop” business owners or family
strongly agree. According to recent census
                                                                           members themselves.
data, there are over 40 million seniors liv-
ing in the U.S. (age 65+) and this number                                  Among senior care franchise companies
is expected to double over the next 20-25                                  specifically, we expect to see some con-
years. Combined with the fact that the                                     solidation (mergers / acquisitions) among
average life expectancy is continuing to                                   the smaller regional brands in an effort to
increase, logically, the demand for senior                                 gain national brand awareness and

Fastest Growing Senior Care                                  (Market Analysis continued)                      Success Attributes
Franchises by Growth Rate4                                   compete with the larger systems. A cau-          As stated, the senior care / home health-
(Listed by units and 3-year compound annual                  tion to prospective franchisees: be sure to      care business is extremely people depen-
growth rates as of 12/2009)                                  fully understand how a merger or acquisi-        dent – with small offices typically manag-
►Brightstar Healthcare                                       tion could effect your situation and make        ing 50 or more caregivers and large offices
            141 units | 73% CAGR                             sure that your franchise agreement clearly       exceeding several hundred. Senior care
►Synergy HomeCare                                            addresses this issue. Most of these situa-       is also a highly personal business where
             95 units | 56% CAGR                             tions are difficult to predict or plan for, and   you commonly get deeply involved with
►Seniors Helping Seniors                                     most franchisees have little or no control       your clients and caregivers lives and family
             86 units | 51% CAGR                             over a corporate acquisition. Senior care        issues. The business operates 24 hours a
►Accessible Home Health Care                                 franchise company Comfort Keepers, for           day / 7 days a week, where caregiver is-
             71 units | 46% CAGR                             example has gone through not one, but            sues, service emergencies and even client
►Senior Helpers                                              two acquisitions since 2003 and is cur-          death can be frequent occurrences. Suc-
            270 units | 43% CAGR                             rently owned by global behemoth Sodexo,          cessful senior care franchisees require a
►Right at Home                                               which is a publicly traded European              high level of empathy and people manage-
            206 units | 18% CAGR                             company. An acquisition can provide more         ment skills, balanced with strong network-
►Griswold Special Care                                       resources for growth and other advantag-         ing, marketing, and operational expertise.
             98 units | 14% CAGR                             es but it can also put shareholder priori-       People attracted to the business solely for
►ComForCare Senior Services
                                                             ties ahead of franchisee priorities – just       the potential profit will undoubtedly be dis-
             120 units | 9% CAGR                             something to keep in mind.                       satisfied and fail.
►Homewatch CareGivers
             160 units | 8% CAGR                             We expect to continue to see new fran-
►Visiting Angels
                                                             chise start-ups entering the market and
             377 units | 8% CAGR                                                                              The senior care and home healthcare
                                                             competing for the increasing demand for
                                                                                                              sector offers one of the best franchise
4. Compound Annual Growth Rate (CAGR) is a good              services. FirstLight Home Care is one
metric to compare similarly-size franchise companies                                                          opportunities in the marketplace today.
within the same sector. When comparing two franchise         recent startup with a very promising man-
systems of dramatically different sizes, it is not of much                                                    The demand for services is very strong
use, as CAGR typically favors the smaller companies.         agement team that has significant senior
For example, if a 200 unit franchise added 20 units in                                                        and is forecasted to grow significantly.
a given year, it would have grown by 10%. If a 50 unit       care franchise experience. While young
franchise added 20 units in a given year, it would have                                                       That said, home healthcare is certainly
grown by 40%. Similarly, if a brand new company with         and unproven franchise systems present
1 franchise unit were to add 20 units in a given year, it                                                     a competitive business sector and those
would have grown by 2000%.                                   a higher investment risk to a prospective
                                                                                                              business operators simply attracted by
                                                             franchisee candidate, startups typically
                                                                                                              the potential financial opportunity, without
                                                             have the advantage of offering more flex-
  Disclaimer                                                                                                  laser-like focus on delivering exceptional
  Franchise Business Review publishes
                                                             ible terms and larger protected territories
  information on franchise companies that it
                                                                                                              care, will struggle to be successful.
                                                             to their first franchisees. Whether or not
  believes to be reliable but is not guaranteed
  to be accurate. The past performance of a                  you consider a startup in your franchise         It is important to note that not all senior
  franchise company cannot guarantee future
  performance. Investing in any franchise, like              opportunity search depends greatly on            care franchises are created equal. Many
  every investment, comes with the potential                 your comfort with risk and your confidence
  risk of losing your entire investment. We                                                                   franchise companies in this sector offer
  strongly recommend that you perform thor-                  in your own skills as an entrepreneur and
  ough due diligence and consult with current                                                                 only an average or even below average
  franchise owners, an experienced attorney,                 business owner.                                  investment opportunity. It is important
  an accountant and other business profes-
  sionals before committing to any franchise                                                                  to do your research and compare brands
                                                                                                              side-by-side. For more detailed research
  Franchise Business Review, its officers,
  employees, partners, and affiliates assume                                                                   and investment guides on specific senior
  no responsibility or liability for the accuracy
  of any information contained herein, nor are                                                                care franchises, please visit us online at
  they liable for any damages arising out of the                                                    
  use of this information.

                                        For more research and information on today’s top franchise opportunities,
                                              please visit us online at
               Franchise Business Review | Abistar Group, LLC | 16 Market Square, Suite 3, Portsmouth, NH 03801 | 603.433.2270

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