While many senior care providers are currently trying to work themselves into the home, two of the largest in-home care franchise companies have found a way to work themselves out of it.
Senior Helpers and BrightStar Care have each launched real estate-based business lines over the past few years. Both have managed to build on those new, home care-adjacent business lines during the COVID-19 crisis, while simultaneously growing their core in-home offerings.
“We wanted to meet families where they were on their care journey,” BrightStar Care founder and CEO Shelly Sun said at the Home Health Care News FUTURE conference last week. “And that’s why we evolved our business model.”
Maryland-based Senior Helpers has over 320 locations in its franchise network, spread across 43 states, as well as Canada and Australia. On Illinois-based BrightStar Care’s end, it has 340 locations within its franchise network, which can reach 75% of the U.S. population within a 30-minute drive.
Despite their success in the home care space, Peter Ross — co-founder and CEO of Senior Helpers — and Sun have both found ways to capitalize on the inefficiencies of an industry they’ve each been part of for nearly two decades.
Entering into senior living
As part of its business model, BrightStar offers medical-level in-home care, non-medical home care, hospice care and medical-staffing services.
More recently, BrightStar entered into the senior living franchise space. It now has multiple communities located in Wisconsin, Indiana and Ohio.
Broadly, expanding into senior living was a way to capitalize off of the significant home care success the BrightStar has had, according to Sun. But it was also a way to keep patients who trusted the brand within the network through their next stages of life.
“We saw that many of our clients, as they progressed and had a change in condition, had higher-acuity needs,” Sun said. “The family wanted to be able to move them out of the home to something with more socialization. They were looking for recommendations from us for assisted living facilities or, in many cases, dementia and memory care communities in their area.”
With that, BrightStar Care began considering the idea that it could recommend its own services in the future.
The company began buying land in 2012, taking on the risk internally before offering opportunities to any new franchisees. Its first senior living franchise opened in 2014; its most recent got up and running in Ohio just last month.
“If we were going to recommend something to families, we’d rather put our brand and our energy behind it,” Sun said.
BrightStar Senior Living is usually a community of 40 to 44 rooms with spacious community areas, a format families prefer over the 100- to 300-room styles in some of the larger facilities that have been hit hard by COVID-19.
In fact, during the public health emergency, BrightStar has actually seen growth in its senior living segment.
Sun attributes that to the more spacious and less packed-in concept, as well as the company’s successful efforts securing enough personal protective equipment (PPE) for all of its caregivers. Additionally, each caregiver works with just six to eight residents in BrightStar facilities, as opposed to the more traditional one-to-15 average in other facilities across the country.
Entering into the ‘adult enrichment center’ space
For Ross, he was inspired by the idea of the Town Square concept, an innovative adult day model that brings seniors into a brick-and-mortar space laced with nostalgia of the 1950s and 1960s, when many of today’s seniors experienced their most cherished memories.
But what really reinvigorated Ross’s entrepreneurial spirit was the idea that Seniors Helpers could bring care to people who couldn’t traditionally afford private-pay home care.
“I found that a lot of families had a need for home care, but didn’t have the money to spend for private-pay,” said Ross, also speaking at FUTURE. “And they don’t really have a great option when it comes to adult day. But I really felt there was a missing link in the adult day space, and came across the Town square concept from the [George G. Glenner Foundation] in San Diego back in early 2018.”
“I just fell in love with the concept,” he added.
The Town Square model allows a family to pay a fraction of the cost of home care — usually $11 per hour as opposed to $25 per hour.
Ross took that admiration and launched Senior Helpers Town Square Franchising in partnership with the Glenner Alzheimer’s Family Center.
The move has been a major success for Senior Helpers, which had to shut down its Town Square franchises during the height of COVID-19. During that time, it had several members and their families inquiring regularly about when the adult enrichment centers were coming back.
Expanding the business model
The first step in expanding a business model to something other than a company’s primary line of care is recognizing a need from customers. The second step is finding something that will solve that need.
But a company has to have a purpose behind expanding its business lines before doing so, Sun said. It also needs to understand the marketplace that it’s entering into.
“[We consulted] senior living and memory care construction experts, those that do market assessments, to know what the unfilled needs are and what rent is likely going to be to make sure we both serve a consumer need and make sure that our franchisees can be profitable,” she said.
The ability to differentiate itself from competitors was also a major priority, which BrightStar’s small-format assisted living was able to do with the lower room count.
Taking a leap of faith into a new service area is also about extending an organization’s existing brand, Ross said. Senior Helpers’ ability to staff the Town Square locations with its workers and present them as a brother-sister partnership with the company was a major selling point.
And having good selling points does matter more when the business line has brick-and-mortar requirements. There’s far less of an entry fee to home care than senior living or adult day, Ross pointed out.
“In home care, you don’t worry about construction. You don’t worry about [building] plans. You don’t worry about all that stuff,” he said. “Your entry into the space is fairly reasonable compared to a Town Square, which is more than a $1 million commitment. So you get into these situations where the type of franchisees you’re bringing in are from very different networks, have different capital … requirements.”
In the end, any new lines of business need to meet the organization’s mission. Both Ross and Sun started their companies due to personal experiences with family members — and those still drive them today.
“I think passion is the critical part,” Ross said. “There’s a lot of great ideas out there, but they don’t all make money. It’s about finding an opportunity to fill a void, but at the same time making sure there’s continuity success for both the family as well as the franchisee. That is very critical.”