The franchise world has grown over the past 60 years to encompass nearly every type of business — if you want your taxes done, your house pressure-washed, your windshield repaired, your house cleaned, your dog walked, or a fast-food burger, franchise owners can do that for you.
According to Forbes Magazine, out of all the different franchise types, one franchise sector is growing at an amazing rate right now: the home care or home-healthcare niche. This sector has grown at a compounded rate of over 11% over the past 10 years. Of Forbes 2014 Best Franchises list for up to A$300,000 investment, three of the top ten are home-health brands: BrightStar, Right at Home, and Synergy HomeCare. Of the the three only Right at Home has offices in Australia.
Right at Home was also ranked by Forbes in the top 3 of all franchises in the market in 2015. Emily Inverso of Forbes reports that Right at Home offices achieve 5 year compounded growth of 14% per annum putting it 3rd on the top 50 list.
Why is home healthcare franchising on the rise? Here is Forbes's quick snapshot of the unique opportunity in this fast-growing sector. Industry research firm FRANdata reports that in the US there were just 13 home-health franchise brands in 2000, that's shot to 56 companies today. In Australia in 2000 there were no franchise home care companies, today there are 8. Most are US based networks that have come to Australia or have bought out local networks.
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. 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 referral sources from estate planning solicitors to hospital discharge planners and social workers. Territories can be very large - for instance the Right at Home Sunshine Coast territory in Queensland stretches from just north of Brisbane to Gympie, an area 100km long and 50km wide. Industry research firm Home Care Pulse found median franchise home-health revenue was nearly A$3 million. What's more, franchise owners brought in substantially more than independent operators, Home Care Pulse 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. Today there are 3.5m persons over 65 in Australia or +-14% of total population. By 2056 25% of the population will be over 65. there are over 5m baby boomers with over 600 people turning 65 every day. There are 344,100 people aged over 85 years in Australia making up 1.6% of the population. This group is projected to grow rapidly to 7.3% by 2056.
International Relationships. International franchise networks provide the benefits of systems, research, ideas and experience. Right at Home is one of the leaders, operating in 8 countries and it recently became the first US home-healthcare franchise to enter China.
Help with red tape. Mom-and-pop home healthcare operators struggle to keep up as national, state and local laws evolve. For instance heath care regulations and employment law are constantly changing. 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 and pricing. Independent operators also struggle to employ nurses in key management positions.
Chance to do good. Brisbane Right at Home owner Karen Sahli says helping older Australians stay in their own homes affordably is more than a business — it's a community service. "I feel great doing this, we make a difference in people's lives every day," she says.
With home-health franchises booming, how can you spot the best one? Ask lots of questions. Franchise contracts vary widely, so read carefully. Most franchise contract terms are at least 10 years.
Not all home care franchises are created equal — for instance, Right at Home provides skilled nursing services, nurse care management and nurse training and supervision, while many other franchise networks do not.
If you would like to explore home care franchising call Right at Home on 1300 362 609.