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Care franchises offer rewarding careers for ambitious investors

Posted: 22 Aug 2019
Estimated Read Time: in 28 minutes

Care franchises offer the tempting combination of making money while giving something back to your community

Care franchises offer rewarding careers for ambitious investors

The care industry is also a good bet for business growth. The number of people needing care is set to grow, but if you think buying a franchise in this sector is just a case of hugging apple cheeked grannies with one hand while raking in the cash with the other, you have a big rethink coming.

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The care industry: The big picture

There is no doubt that supplying a care service can be rewarding, both for franchisees and the caregivers they employ. But running a care franchise brings a variety of challenges that potential franchisees should know about.

Despite the demand for care services, profit margins can be tight. Most domiciliary social care is still provided by local councils, but funding cuts mean their capacity to pay for decent care is under severe pressure.

A 2018 report from The Institute of Public Care at Oxford Brookes University stated: ‘For providers of domiciliary care their main concern…has been how they can effectively run their business, maintain or improve quality standards and innovate, with very tight margins that are currently offered by councils. Some providers are slowly leaving the public sector market and focusing on building their own private customers to sustain their local businesses.’

The report also found persistent problems with recruiting and retaining caregivers.

Given all these issues, plus the fact that care is - rightly - a highly regulated sector, it may make more sense to get into the care sector with a proven, established franchise than setting up a business on your own.

Amy Patel Popat, who with husband Kev owns the Right at Home Solent franchise, agrees: “There was so much to learn in the first 18 months - and so many regulations to comply with - that I don’t see how someone could do this successfully on their own.

“We followed a start-up plan that helped us minimise unnecessary delays and expenditure and through the initial training and ongoing support, we were given all the tools and guidance we needed to build the business, though there is enough flexibility within the franchise model for it to reflect our personalities.

“We’ve also benefited from the strong support of other franchisees - one of the biggest assets of being part of a franchise.”

How franchisors help you meet the challenges

Established franchises will help you set up your service, get the required regulatory permissions, recruit staff, market your business and provide ongoing business support.

Here’s how franchisors can also help you meet the four main challenges facing this sector:

• Managing the public sector funding crisis.

Sally Graham, a former care sector franchisee who went on to set up her own care franchise, Avant Healthcare Services, says: “In some areas, social services and the NHS pay a fair rate for home care, but in others they don’t.

“In these areas, we advise our franchisees not to take on this work. How can you provide a high standard of support if the price paid does not support this?”

• Staff turnover. In the social care sector, staff turnover is 30.7 per cent in England alone, according to a 2018 report by Skills for Care, the organisation for workforce development in adult social care.

Sally says: “We invest heavily in building a positive working culture to reduce turnover of staff. We provide regular training to all our franchisees and managers to develop effective leadership to help retain our employees.”

• Caregiver recruitment. At any one time, there are around 110,000 vacancies in the care sector. Care providers, however desperate, cannot risk employing just anybody. It only takes one instance of poor care to ruin a provider’s reputation.

“Recruiting people with the right values, who are accountable, nurturing and trustworthy, increases our retention levels to build a better continuity of care and support to our customers,” Sally says.

• Regulation and inspections. Care providers must adhere to stringent regulations and are subject to inspections by the Care Quality Commission. A poor CQC rating can kill off a business.

Most care sector franchisors help franchisees comply with regulations and provide updates about any regulatory changes.

Dr Hannah MacKechnie, owner and director of Radfield Home Care, says: “The CQC, along with the policies and procedures required, can be a minefield to navigate on your own - especially if you are new to the sector. Our franchise partners have access to our tried and tested policies and procedures and we assist them with applications to the CQC.”

Meanwhile, Sally says: “The CQC regulations give guidance and direction to care providers, so these should always be viewed as a positive.

“Nevertheless, managing the inspection process can be daunting and nerve-wracking. Franchisees can get guidance and support from the United Kingdom Homecare Association and their franchisor.

“Guidance on dealing with inspections is included in Avant’s training course. We have ongoing webinars for franchisees and people from our quality department attend inspections to give franchisees support.”

The future of care: the private marketplace

Franchisors are increasingly focusing on privately funded care clients, sometimes with personal care budgets delivered through direct payments, which they are free to spend as they choose.

More franchises are marketing a wider range of offerings, diversifying from elderly care into areas such as care for children and adults with disabilities and providing 24-hour live-in care, as well as the more usual daily visits.

New technology

We are a long way from the care robots that are already in use in Japan, but new technology being introduced among UK care franchises has the potential to help franchisees.

Martin Jones, managing director of Home Instead Senior Care, says: “You will never 100 per cent replace a caregiver going to look after a client, but technology will enhance the service we provide rather than replacing it. We call this the ‘high tech, high touch’ approach.”

Home Instead is piloting the use of sensors around clients’ homes to check they are up and about in the morning, for example.

“It makes it easier for us to tailor care to suit them and to alert us and their family if they need checking on,” Martin says. “Technology like this can act as a safety net.”

The franchise has also recently agreed on a partnership with GrandPad, a company that has developed a tablet for elderly users.

“Through the use of the special tablet, franchisees are able to improve the connectivity of people in their care, allowing them to remain in regular contact with friends and family,” Martin says.

“In the future, it will enable us to offer new services such as interactive, remote care in hard to reach areas.”

At Right at Home Solent, franchisees Amy and Kev are pioneering new technology.

Amy says: “All our care documentation is digitalised, the systems are cloud and app-based and we have a dedicated team member who supports our technology.

“Over the next year, we’re looking at offering a range of monitoring technology, which can help people maintain their safe independence at home at times when there’s no one else there and we’re working with the local authority to look at how clients may benefit from voice search technology.”

A two-way ship of success

Former accountant Dave Bellis proves you don’t need care industry experience to get into the care sector.

Dave, now the Liverpool North franchisee for Radfield Home Care, says: “In this sector, it is a two-way ship of success. If you are a business person, you will have a great understanding of business finances and management, but you must go into this knowing it is more than just a business. The most important thing is providing great care to all our clients.

“Being an accountant helps me keep an eye on the figures and keep organised. I’m sure more of a professional healthcare background wouldn’t do any harm, but sometimes it’s good to have a different viewpoint and do things in a way which those with a background in this sector may not have thought of.

“Recruiting a high calibre registered care manager with a proven track record means I know she will do a great job and she has helped push my business forward.”

Dave advises those new to the sector: “Recruit the best care manager you possibly can. Pay top dollar and get the best.”

Striking a chord

When he was in his twenties, both Simon McGee’s parents passed away within six weeks of each other.

He explains: “I was a dissatisfied business consultant at the time and it made me want a career that made a difference to individual lives.

“Later, when I was looking for care for my grandmother, we engaged the services of Home Instead Senior Care and the fact they matched each client with a suitable caregiver really struck a chord with me.

“I wanted to run my own business, so I contacted the Home Instead national office.”

Simon’s main concerns were a lack of experience in managing teams of staff and whether running a care business was the right opportunity, so he talked to existing Home Instead franchisees. All were positive about the business model.

He launched Home Instead Senior Care Chichester and Bognor Regis in 2015 and now employs around 60 people.

“It would not have grown so fast without the Home Instead model,” he says. “But it’s always important that we match our caregivers to our clients’ characters and backgrounds.

“One of our caregivers is an ex-Marine who is a keen fisherman, so we have matched him with a client who loved fishing. He has taken the client who has dementia on fishing trips. Enriching someone’s day by understanding them really matters.”

The biggest challenge is recruiting caregivers. Simon says: “There’s a lot of competition, so I ensure they are well paid, well supported and that they share our caring ethos.”

He advises: “Don’t go into the care sector if money is your only motivation. If you grab too much work, you’ll need to be less choosy about your caregivers.

“That leads to lower standards and high staff turnover, so you have to spend more on hiring. It’s better to invest in the good caregivers you already have.”

The ageing UK

  • The UK population is projected to reach over 74 million by 2039.
  • It is also ageing, with 18 per cent aged 65 and over and 2.4 per cent aged 85 and over.
  • 20 per cent of men and women aged between 75 and 84 have at least some problems washing or dressing. This rises to 34 per cent of men and 42 per cent of women aged 85 and over.

Source: Office for National Statistics figures 2017.

Will a care franchise suit you?

Care franchisors are very choosy when it comes to franchisees. They all seek genuinely caring people, who also have business acumen. Regulations also demand that directors in this sector be ‘fit and proper persons’ who are ‘of good character’. Enhanced Disclosure & Barring Service checks are required.

Experience in the care sector is not essential, however, as you can recruit a qualified care manager to run the care service, while you manage the overall business.

Martin Jones, managing director of Home Instead Senior Care, says: “We look for franchisees who share our ethos and believe in our mission to ‘change the face of ageing’. They must have a growth mindset and an ability to lead a team of people.”

Prospective franchisees need to ask themselves some key questions:

  • Am I passionate about what the company does? Does it excite me?
  • Do I like the people at head office? They will play a big part in your business for the lifetime of your franchise.
  • Will they give me enough support? Do they have a high enough ratio of national office staff to franchisees to be able to support my business?
  • How engaged is the franchisor with the franchise network? Will I get to have a say in how the operation works moving forwards?
  • Are they good at what they do? What evidence is there of this? Look for franchise, business and care proof points, such as awards and sector recognition.

The author

Linda Whitney writes about franchising for the Daily Mail, What Franchise and many other publications.

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