The home care franchise company Right at Home is doubling down on expanding its corporate-owned footprint.
That initiative began in 2019 for Right at Home, and is part of a much larger trend for home care franchisors in general. Brady Schwab, Right at Home’s new chief growth officer, believes being in business alongside its franchisees creates more understanding and opens the door for further innovation.
But that’s just one aspect of Right at Home’s growth plans in the near-term future. Based in Omaha, Nebraska, the company’s footprint currently includes over 600 franchise locations in the U.S. and seven other countries.
Schwab sat down with HHCN to talk about corporate-owned locations, how rising billing rates affect growth, combatting staffing shortages and more.
The conversation is below, edited for length and clarity.
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HHCN: Brady, let’s start with a background on you and how you got to Right at Home.
Brady Schwab: I started my career as an audiologist working in a clinic with seniors. Essentially, I was responsible for doing hearing tests and selling and fitting hearing aids. My entire career has been in hearing health care.
After about three years of working clinically, I was really ready for new challenges and was intrigued by the business opportunities within the industry and moved into a sales role within a wholesale hearing device company.
From there, I was really fortunate to have a diversity of opportunities to grow and learn across a lot of different roles: private practice management and operations, I worked at a startup, business development, retail, multi-unit management and M&A. I’ve been really lucky to touch a lot of different aspects of the hearing health care industry and really excited to bring these experiences to my new role at Right at Home.
How did the opportunity come to fruition? Were you interested in getting into the home care industry in the first place?
It was a great opportunity and a little bit more happenstance. I did have some vantage into home care and home health with some colleagues that I worked with previously. So, I had a little bit of insight and window, but in terms of the opportunity coming about, it was a little bit more serendipitous.
Is there anything in particular that intrigues you about the home care space that makes the opportunity even more attractive?
A couple of things.
One is just the opportunity and innovation around aging and the huge demographic opportunity. The change in health care and health care delivery, moving from more of the institutional and hospital-based to at-home care really intrigued me. I’ve always been around health care and have been around seniors, and it was a really interesting combination of those two that came together and was a great opportunity professionally for me to become part of a great team.
Was there a moment when you noticed a difference in the home care industry compared to where you had been in the past?
I’m learning a ton. Every day is a new lesson and I’m kind of drinking from the firehose. Early on, there was a realization of the complexity of going into somebody’s home and that being the venue for the delivery of care. As an audiologist, I would do house calls and work in facilities, but it was always really clinic-based.
Now, it’s about understanding the trust and the intimacy of going into someone’s home and the personal nature of our work, which really heightens the degree of trust-building and thoughtfulness that’s required by caregivers and staff. Not to mention the logistics of scheduling and travel. There’s a layer of complexity that, until I got close to the actual delivery of care, it was all a little bit academic, and now is a lot more real. That was an early example that kind of changed my perception and orientation to the problems we’re trying to solve.
Right at Home is a franchise, but something that you all want to grow is that corporate-owned footprint, the number of locations you have under your own belt. Why is that?
There are really three pillars to the company-owned footprint strategy.
One is market share. There are opportunities to expand our footprint strategically and opportunistically that will help us accelerate growth. There are some markets we’re just not in, or markets where we feel like owning [a location] is a really strong opportunity for us. Where we can acquire a great business, great capabilities or talent. Markets where we can enter into or expand more proactively and capture that opportunity for growth more immediately.
The second is: we really believe that it’s an opportunity to be in business alongside our franchisees. Facing the same challenges on a day-to-day basis gives us a ton of perspective on trends and opportunities in the industry. It creates an opportunity for us to say, ‘We’re in the business, too. We understand it, we’re in it together.’ We can share best practices for multi-unit franchisees as well because we have that perspective of operating multiple locations and feel that we can feed that back into the system as a best practice.
Lastly, it’s really our proving ground and testing bed for innovation. We strive to bring innovation into the system and that requires a level of risk-taking and putting our money where our mouth is that we don’t want to assign or ascribe to the system, especially early on in an innovation process. We know we’re going to have some well-earned lessons and definitely some failures along the way. We want to be able to operationalize and develop these best practices around a new model or a new technology. We know these concepts or ideas will evolve over time and for most of the system, they’re not interested in being guinea pigs and testers for version 1.0.
We certainly have owners that are really excited about that and want to participate and we welcome that. But for many, there’s just a different margin of error for the innovation process that maybe with their degree of personal financial risk just doesn’t make sense for them. We really believe that the corporate-owned strategy provides a lot of value back to the network by being able to cultivate some of these things in the early stages before we bring them to the larger system.
Where are you right now in terms of your footprint and where might you want to get to in the near-term future?
Currently, we have 10 corporate-owned locations and we’re somewhat geographically diverse.
In terms of what that end game looks like, we think that there’s a rational mix of franchisee and corporate-owned, but what that endpoint looks like I couldn’t really say. We’re still bullish on the opportunity, there are still some markets that we definitely want to be proactive in, and there are always opportunistic situations that we want to evaluate.
Would you say that’s the focus right now, or is growth always going to be sort of two-pronged for you all? Or even three-pronged?
I would say it is definitely three-pronged. One is obviously growing our footprint from the franchisee standpoint. We’ve been franchising for 25 years, so while we’re pretty mature or have a degree of maturity from that perspective, we still think that there’s a runway there. This year, coming out of COVID and sharpening our tools here a little bit, we’re focused on really doubling down on our efforts and staying focused on our opportunity from a franchisee growth standpoint.
From a new franchise standpoint, there’s time and incremental growth that comes from that and frankly, our growth expectations are higher than that. That leads back to more of our ability to innovate and drive performance within the system. How do we be more productive with our current staff? How do we become the employer of choice? How do we leverage technology and innovation to deliver high-quality care that’s less labor dependent and raises the game for our caregivers?
When you look at a system of our size, that’s a pretty big lever. In absolute terms, that’s where we can deliver a lot of end results from growth. I think that’s our biggest lever, but it is the second of three.
The last is acquisitions. How do we bring in more talent, bring in more capabilities and capacity from an acquisition standpoint and help fuel our growth? Obviously, if we get better across the system and innovate and develop better technologies, that will help our new franchisees.
When you do acquire a home care agency, would that just become a corporate-owned location or are you talking more about technology-type add-ons?
From an acquisition standpoint, our primary focus today is acquiring agencies to become corporate-owned, Right at Home stores in that market. That is not to say that we aren’t looking to be acquisitive outside of that, whether it’s technologies or other companies.
We’re early on in the process of what those acquisitions could look like, but it’s certainly on our canvas and playbook to be thoughtful and mindful about those opportunities to bring a lot of growth and energy into the system.
You mentioned earlier the areas that you might want to enter into. When you’re evaluating that, are there certain characteristics of an area that make it more likely that you would either buy into that area or open up a de novo corporate-owned location?
There are certainly the more general demographic opportunities we pay attention to. Where are we seeing migration patterns? What do we know, from the metrics in our own system, are really fertile areas for us to enter into and make an impact?
Short of getting into any of the real detail and nuance there, there’s a lot of that high-level stuff we consider when we look at our map and where we have holes in our current territory. There’s some natural opportunity and we’ve had some real success with some of our franchisees selling to Right at Home from a corporate-owned standpoint. That’s a strong opportunity as well.
From your perspective, how does the rise of billing rates in home care affect growth? What do you do to make sure that you’re still growing even though there are some of these headwinds in the industry?
I think the billing rates are really an interesting aspect of the moment we find ourselves in.As I look at it, there are definitely some concerns.
From a philosophical perspective, we want to have the ability to provide care to an economically diverse population. We’re really passionate about what we do and want to make sure that we’re not only serving those in the most comfortable financial positions, but more broadly to the population that needs us.
Secondly, the increasing bill rates put a lot of downward pressure on service hours. If clients are rationing their care, that — as a cascading impact — puts pressure on care plans and outcomes and we really are sensitive to those dynamics and that push-pull. The rationing of care can have huge consequences.
Lastly, the higher bill rates create an opportunity for new entrants and disruptive innovation. We want to be the ones that disrupt our own business or create models that can expand our reach in markets. The margins and higher bill rates can cloud the perspective of the opportunity to get better in new ways and to get better faster. There’s a feeling that we’re doing well where we are today and as they say, revenue cures all ill. It does until it doesn’t. We want to make sure that we’re really staying focused and opportunistic in terms of how we get better every day. Some of those things can be clouded by this rising tide.
Obviously, you’re new to the industry, but you probably wouldn’t be in the position you are if you weren’t bullish on home care franchising growth at large. Do you think it’s becoming more challenging than it may have been in the past?
It’s a good question. I’m probably not the best person in the world to answer that question, but with that said, I think franchising as a concept is a really wonderful way to create a path for enterprising and hard-working people that want to have ownership in their future, want to contribute and want to build personal wealth.
There are certainly franchising regulatory clouds on the horizon that are going to require advocacy and some loud voices to the governing bodies and to address some of the misperceptions of franchising at large, but it really doesn’t diminish my view on the opportunities that franchising presents in general, specifically in home care.
We do a lot of really good and valuable work. Frankly, the demand for our services will continue to far outpace supply. That’s a better problem to have than the converse, but it’s still a problem. In my experience – and in my view from hearing care — whether it was consolidation or vertical integration, I think the small business owners that apply innovation and really execute on the blocking and tackling at a local level will always have the opportunity to win in a business like home care.
To be able to be in business for yourself and really leverage that ownership mentality and that owner mindset — I am very bullish on that.
It seems like everything’s always harder than it used to be, so [it’s important to] try and separate that out from the market realities. Regardless of the challenge, I think these are challenges that can be overcome.
Some people say we’re in a recession right now and some people say we’re headed toward one. There are a lot of different opinions on that. But during those periods of time, obviously, there was more interest in franchising.
Totally. As Warren Buffett says, when there’s fear, that’s an opportunity to buy.
Maybe these economic winters are a great time to plant and we’ll see people looking at the opportunity to bet on themselves. The challenges around interest rates and the broader economy are real and felt differently in different parts of the country. I’m still bullish on the opportunity for folks to really get up in the morning and work for themselves and go out and make an impact.
Certainly, the franchisees that I’ve been fortunate enough to meet across Right at Home, that’s in their DNA. And it’s really exciting. I don’t think that’s going to go away. The opportunity to serve and to address this huge demand that’s only growing is very much real.
Staffing shortages are something you mentioned at the beginning of the conversation. Those shortages are obviously a growth impediment if there’s not enough capacity. What can you do from your perspective and your position to help mitigate that?
It’s the number one thing that keeps me up at night, because it’s our single largest impediment to growth, without a doubt. As we consider avenues for innovation, both on the technology and business innovation side, we have to continually reprioritize our work in that area.
We definitely need to do all we can to mitigate these effects. I believe in my role, there’s an opportunity around innovation. We can attack this in a couple of different ways. One is to improve the experience for caregivers. As we look at how we deliver care and what it means professionally to be a caregiver, we can work on making their daily lives a little bit easier and more rewarding at Right at Home so that we can be the employer of choice. I think there are opportunities to develop tools and services that enhance and elevate the profession, attract more talent to the role and bring a lot of awareness to the role that we think can have a daily impact on caregivers.
At the end of the day, we have to understand there’s a demographic math problem that we can’t solve fast enough. There are more people in this generation than there are to take care of them. Technology is a necessary component of all the things that we’ve talked about already. There’s an opportunity to expand care that simply can’t come from a person. Obviously, there’s so much in the press today about AI and the opportunity from a technology standpoint. I think we’re on the precipice of some really mind-boggling innovations. Hardly news coming from me, but there’s an awful lot out there.
We have the opportunity for AI to really disrupt our idea of companionship and interaction in ways that we’re just starting to wrap our arms around. Frankly, I think it’s a huge opportunity for augmentation to the caregivers that we have. I’m not worried about replacing caregivers. I think things like AI and technology will really help us elevate the role in incredible ways and unlock opportunities for caregivers to specialize in things that are distinctly human.
That’s really exciting to me.
If you could only reach one, what’s the goal that you’d like to accomplish most for Right at Home by the end of your time here?
That’s a tough one. Honestly, there’s a whole bunch that we’d like to accomplish and to narrow it down to one is awfully tough.
If I can look back and say that we really identified a key problem that our franchisees and the industry faced, and answered that problem with an innovative and actionable solution for franchisees and caregivers, I think that’d be a job well done.
If we can say that we really solved a problem that was vexing and sticky, I’d be pretty happy.
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