Home Care Franchise Trend Gets Even Hotter

No more are the days of opening a restaurant franchise—it’s now all about home care franchises.

By 2025, the number of Americans 65 and older will be up to 66 million, according to projections by the Census Bureau, and since the recession, investors are realizing just how profitable the home health industry can be.

Since 2013, the senior home care sector has grown by 6.6% annually, compared to 2.6% for the overall franchise industry, according to a recent article from The Wall Street Journal.


“Providing home health aides and other services to older Americans is a fast-growing business, as brands and franchise owners seek to capitalize on an aging U.S. population and low costs of entry,” the article says.

Five years ago, one-third of the home care agencies were franchises, but now about half are, according to market research firm Home Care Pulse LLC.

One home care services provider, Home Instead Inc., has grown by 25% since 2010 and has almost 1,100 Home Instead Senior Care franchises throughout 12 countries. And BrightStar Group Holdings Inc., also expanded from 199 locations to now having 315 in 38 states, article points out.


In addition to the 65-plus age group growing at a faster rate than any other generation at this time, the pretax income for senior care franchises is much higher than for other franchises. The pretax income for senior care franchises is about $118,000 per year, compared to $82,000 for the franchise industry as a whole, Eric Stites, chief executive of Franchise Business Review, says in the article.

The initial investment for home care franchises is also fairly low, averaging around $115,000, which is much less than the $1 million needed for a sit-down restaurant.

Franchising a business, however, does have its challenges. Making an easy-to-replicate set of guidelines is not an easy task, which can include preparing detailed disclosure documents, figuring out how to codify tasks and safeguarding the environment for seniors, the article explains.

Another hurdle that most of the senior housing industry sees is high employee turnover.

“About 60% of caregivers typically leave in any 12-month period, according to Home Care Pulse,” the article says.

But if a company can offer perks to incentivize employees to stay, it may help home care franchises become even more successful. Four BrightStar Care franchises in Wisconsin offer perks like flexible hours, a 401(k) plan with matching contributions and paid time off. BrightStar is among the top performing home care franchises in the country based on metrics that include turnover rates, according to a 2015 index.

The number of seniors in need of care is not lacking, but it is up to the franchise owners to meet the staffing challenges of their businesses.

Read the full article from The Wall Street Journal.

Written by Alana Stramowski

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