Strong Growth Forecast for Home Care Franchise Sector

Franchise businesses should have a strong year in 2018, especially home care franchises and others that specialize in personal services. Southwest states in particular could be a hotbed of growth.

Outpacing the U.S. economy as a whole, overall franchise employment is expected to increase 3.7% in 2018, while the gross domestic product of the franchise sector is anticipated to increase 6.1% to $451 billion, according to the recently released Franchise Business Economic Outlook report, prepared for the International Franchise Association by IHS Markit. The report was compiled using IHS Markit’s proprietary data as well as data from various published sources.

The report broke the franchise sector into 10 categories; out of these, the “personal services” group is projected to have the most growth in number of establishments and employment in the coming year. The personal services category includes home care businesses, as well as educational, entertainment, recreational and other services. About 30% of the category encompasses “offices of physicians, dentists, other health care practitioners and home health,” Karen Campbell, consulting principal with IHS Markit, told Home Health Care News.


For the personal services category, 2018 growth is projected at a 3% year-over-year increase in the number of establishments, which would bring the total number of locations to about 113,500. Employment growth is pegged at a year-over-year increase of 5%, which equates to a total of about 517,000 workers.

With a strong economy, gains in real income and household net worth are driving consumer spending in the personal services category and supporting the expansion of this franchise sector, the report stated. These economic factors are also spurring home care franchise growth specifically, as is the demographic trend of an aging population, Campbell said.


“In the past, someone might have taken care of their elderly parent, but now they have a job because unemployment is so low, and they’re outsourcing care,” she told HHCN. “I think this is not as big a driver as demographics [for home care growth], but people choosing to outsource more is one of the drivers.”

The report also identifies the top states for total franchise growth in 2018. The Southwest dominates, with Nevada, Utah and Arizona leading the pack, followed by Florida and Colorado rounding out the top five.

Demographic trends are at play here as well, as population growth is strongest in the Sun Belt, according to the report. Nevada also has no state income tax, helping it snag the top spot.

These states also have rapidly growing populations of those 65 years old or older, according to separate data released last year, from the Administration for Community Living. Between 2005 and 2015, Arizona and Colorado experienced faster growth than any other states in their older adult populations. Nevada came in at No. 5.

Written by Tim Mullaney

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