One aspect of franchising that makes the industry so exciting is that the business tends to be a very accurate depiction of what is growing in small business and where small business trends are pointing. One constant in the franchise market has been the intensely growth oriented senior franchise market segment. This market has literally exploded since the early 1990’s with the advent of in-home senior care models hitting the market through brands such as Visiting Angels or Comfort Keepers, who in this time have each opened several hundred senior franchise businesses.
Since that time, a wide variety of different senior care franchises have not only launched their franchise models, but have been able to experience significant growth in a relatively short time period. Mobility City is a new, innovative brand that provides mobile wheelchair repair to seniors who are unable to leave their home. The entire business can be operated from a home office location and is essentially based in a van. The value to the senior needing their wheelchair or mobility device to work correctly is enormous and the cost to deliver services is primarily just time and advertising. Another brand which developed their franchise in 2011, Medex, provides non-emergency transportation to seniors. Yet another brand, Avendelle, provides senior services from a converted residential home. Mobility City just launched their franchise, but has receive enormous interest throughout the Southeastern U.S. in only a very short time period. The Medex Franchise was able to essentially sell out the country in only three years of franchising the business model and Avendelle just recently sold a 500 unit master franchise arrangement in the Country of Turkey.
None of these brands are household names and have experienced significant growth which indicates the amazing opportunity that senior services represents.
The numbers don’t lie with a senior services market in the U.S that is estimated to be $436.6 billion by 2018, with a compound annual growth rate (CAGR) of 6.4% for the five-year period, 2013 to 2018. Incredible, seemingly unsustainable growth for a market segment that is already enormous….how can it grow that much consistently for so long of a time period?
The answer is an enormous population that is hitting “senior status” and with each passing day, more people join this demographic. The growth of incoming potential senior customers is so large in fact that all research points to the market being largely under-served even with the exponential growth that has taken place in the market. Even with the large number of in-home senior care franchises that have had so much success, there are new, effective franchise brands that have launched in recent years and also had exponential growth.
My advice to those in search of a franchise investment who aren’t necessarily locked into an industry segment is look first at the senior market; the numbers certainly play in your favor, you just need to find the right brand for your interests.
As with any business, there are potential obstacles to success with senior franchise businesses as well. The majority of the senior service franchises require relatively high degrees of staffing requirements to manage and operate. These labor costs may also vary greatly depending on your state and market as generally they are required to be W-2 employees in today’s labor regulations. One should make sure that minimum wage requirements or worker’s comp costs do not take a good business into being a bad one for your market if the expenses increase for a given area.
Technology is critical to manage most senior service franchises, make sure there is a great system in place and that your senior franchise has validated how and why they use technology to make managing the business easier and simpler. There is liability in senior service franchising as you are taking people’s lives into your hands with most of these businesses, the level of importance and accuracy that the business model is operated by can literally mean life or death for your customers. Make sure that the systems are in place and that the people running the day to day business not only are good at what they do, but also that they have compassion and concern for those the business serves. Plan on having more insurance and higher insurance costs than you plan for, it is just good business in the senior franchise market segment. With growth at all time highs in senior franchising, one needs to define how they will get business and what that franchise marketing system will look like as they take their new brand to market.
The positives for senior franchising really do outweigh the negatives, so if the category has any interest to you at all and you have the compassion an understanding for how to service our elders, this is the market you should be investigating. Find the right senior franchise, research the financials and understand how that particular product or service category fits into the overall senior market. In my opinion, choosing a franchise with all signs pointing up in a big way on the consumer side of the business is just a good business decision.
Christopher Conner is the President of Franchise Marketing Systems and has spent the last decade in the franchise industry working with several hundred different franchise systems in management, franchise sales and franchise development work.