Home care franchise company Assisting Hands has passed growth milestones recently, entering three new states and laying the groundwork for international expansion. Nampa, Idaho-based Assisting Hands Home Care was started in 2006 and has grown to 108 units across the country, through an area representative franchising model.
The area representative approach is not unheard-of in home care — for instance, it is used by Always Best Care, which has more than 200 U.S. locations. However, it is not the norm for this industry.
“Other franchise companies do it, but very rarely do you hear of a home care or hospice company using this model,” Assisting Hands CEO Lane Kofoed told Home Health Care News.
The system relies on area representatives who own and operate a pilot business in a particular geography, and then bring local franchisees into the group, providing training and support in conjunction with the national office.
The model works well in home care because states differ in their licensure requirements and ways of doing business, and understanding local markets is crucial to generating referrals, Kofoed said. So, having an expert on the ground provides a valuable layer of support, in addition to the national office.
Restaurant and hospitality franchises more commonly follow this model, with area reps playing a crucial role in finding land for new locations, Kofoed said.
“So, you don’t think of it as a model for services companies, but we’ve really benefited from it because of the additional training and support, even though it’s not finding land,” he told HHCN.
Requirements are higher for area representatives than for standard franchisees, with net worth and liquid cash requirements being more than double what they are for a normal franchisee, Kofoed said. This is because they are buying the initial franchise as well as the area together, and can then have a multi-unit business.
The net-worth requirement for Assisting Hands is $200,000 and the liquid cash requirement is $50,000, according to Entrepreneur’s 2018 Franchise 500 list, on which Assisting Hands ranked No. 164.
Beyond the financial requirements, area representatives need to have management skills, to excel at supporting and training others, Kofoed emphasized.
There are currently eight development areas for the company. One is in and around Chicago, where Rich Ueberfluss is the area representative and owns Assisting Hands locations in the suburbs of Hinsdale and Naperville. Ueberfluss recently also began servicing the state of Wisconsin. Growth is occurring in other markets as well. The owner of Assisting Hands Fort Myers, in Florida, has teamed up with a friend to purchase the Eastern Massachusetts and Vermont territories.
Sizing up South America
Further expansion could come outside the United States, with international sales being led by Armando Morales, owner of Assisting Hands Miami.
“International has a lot of low-hanging fruit,” Kofoed said, referring specifically to South America. There, shifting laws, regulations and consumer expectations are creating opportunities for companies like Assisting Hands, he believes.
While it’s possible to hire a caregiver for a low hourly rate in South American countries on an informal basis, there is a growing appreciation of the benefits and need for professionalized care—for instance, being able to count on a backup caregiver if one gets sick, Kofoed said. People in developing nations in South America are starting to have the resources to pay for this level of service, and at the same time laws and regs are shifting to have more stringent requirements.
One possible model for the international expansion is to create a master franchise type of arrangement, in which each country would have a master franchisor similar to the area representative in the United States, Kofoed said.
While making moves to tap new markets, Assisting Hands is not planning to accelerate growth much beyond its typical rate of one to two new locations a month. Wary of growing too fast but not wanting to be sluggish, the company is looking for a steady pace.
“We’re between the tortoise and hare,” Kofoed said.
Written by Tim Mullaney