It has been over a year since industry insiders predicted that home care franchise systems could experience accelerated growth brought on by the COVID-19 pandemic.
Following rising unemployment and widespread business closures, many believed prospective entrepreneurs would turn to more mission-oriented careers, with home care and aging-in-place models presenting lots of upside. While it’s difficult to tell the full extent of how that has panned out, several franchise systems have been touting their recent growth.
Synergy HomeCare, Always Best Care and Best Life Brands are just three examples.
“I think the pandemic has accelerated and even sweetened the pot,” Synergy CEO Charlie Young told Home Health Care News. “Because the trend will continue to grow of wanting to keep people at home for as long as possible.”
Synergy is a Gilbert, Arizona-based non-medical home care franchise that operates roughly 380 franchise locations nationwide. The company offers companionship services, in addition to personal assistance, housekeeping, live-in care and 24-hour home care services.
Economic realities
The public health emergency has had a profound economic impact.
In addition to an overall reduction in general business activity, the spike in the number of unemployed workers surpassed the Great Recession, according to the Pew Research Center.
And even several months after the initial COVID-19 shutdowns, there were still 7.6 million fewer jobs in May 2021 than in February 2020, according to a data analysis from the Center on Budget and Policy Priorities.
Yet amid this economic uncertainty, many home care franchises have thrived, as entrepreneurs view them as low-risk investments.
The franchise business model, in particular, offers a relatively safe environment because it allows new owners and operators to enter the space without starting from scratch. New franchisees are often joining companies that have an established brand and built-in systems that set them up for success.
Demographic trends are another reason the home care franchise model is appealing to entrepreneurs. In the U.S., the number of individuals 65 and older will more than double over the next 40 years, reaching 80 million by 2040, according to the Urban Institute.
“If you look at the basic foundations of the business, you’ve got strong demographics, and you’ve got social trends of aging in place that are all lined up to make home care franchising a very attractive space,” Young said.
Synergy has the numbers to back that idea up, too.
In 2020, the company sold 38 territories. It sold 13 territories in the first quarter of 2021 alone.
“The first quarter is traditionally one of the slowest quarters for franchise development,” Young said. “So if you just look at that number, we’re well on our way to outpacing our 2020 numbers.”
Many other franchise systems are seeing good signs as well.
In 2020, Always Best Care experienced a rise in potential franchise owners. A year later, demand for its services continues to increase.
Over the past six months, the company saw a 150% increase in home care inquiries compared to the same period last year, President and CEO Jake Brown told HHCN.
“What we’re noticing is that a lot of the candidates, in many cases, are corporate professionals,” Brown said. “We think they’re looking to go into business for themselves, maybe for the first time, in many cases. Given the economic markets, we think they’re looking for something that’s going to be recession-resistant and virus-resistant.”
Brown also believes that many of these potential franchise owners are looking to “make a difference in their communities” by taking on more mission-driven work.
Rising home care awareness
Non-medical home care has received more attention than ever during the pandemic. This newfound visibility has also likely contributed to greater interest in the space.
“I think much more awareness has developed as it relates to home care,” Brown said. “I think 10 years ago, a lot of people didn’t fully understand exactly what [home care] was, and I think that’s slowly but surely evolving and changing.”
Overall, Always Best Care has added 11 new franchise agreements in the past six months. The company also entered into a new market, Hawaii, for the first time.
“Based on what we have percolating in our pipeline, we anticipate that that momentum is going to continue through the rest of the year,” Brown said.
Another company, Best Life Brands, added 71 new franchise agreements across all brands in 2020. Bloomfield Hills, Michigan-based Best Life Brands is the holding company for a number of senior care agencies, including ComForCare and At Your Side.
Plus, Burkburnett, Texas-based home care franchise HomeWell executed 19 new contracts and brought in 16 new owners representing 31 territories in 2020. HomeWells’s CEO Crystal Franz previously told HHCN that the company will likely exceed 2020’s numbers this year.
The home care industry itself is a highly fragmented one, with a mix of franchise networks and independent agencies. Many of these businesses are growing, but the sheer demand for aging in place likely means there’s vast opportunity remaining.
“There are a lot of undeveloped territories out there for Synergy, as well as for other companies,” Young said. “I believe the demand will continue to grow, not only in 2021 but beyond that into 2022. The people who are interested in investing in this business and joining Synergy are of the highest quality, and I think that speaks to the opportunity in this space as well.”
Similarly, Brown thinks that there is sustainable growth on the horizon.
“From our perspective, I’d say about half of our franchise system is continuing to experience double-digit or even higher year-over-year growth,” he said. “With that level right now, … we don’t think it’s going to necessarily slow down anytime in the foreseeable future.”
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