June 17, 2008 // Franchising.com // Michael Newman saw a hole in the complex web of senior care services. He filled that void and in doing so created a business model that has no match in the industry for both the services it provides seniors and their families and the opportunity it offers prospective investors.
Newman is the founder and president of Always Best Care Senior Services, a franchise concept that provides non-medical In-Home Care, Assisted Living Placement Services and Personal Emergency Response Systems to seniors. Newman entered the industry in 1996 when he opened four small residential care facilities in Sacramento.
Time after time, Newman would see seniors and their families arrive at his facilities confused and overwhelmed by the process of finding a facility that best fit their loved one's needs. Typically dispatched by a hospital discharge planner, case manager, social worker or doctor to find a suitable facility, they often had only a list of names from a placement service to guide them.
Realizing there was a better way, Always Best Care launched its own "personalized" no-cost assisted living placement service, accompanying seniors and/or their families to various facilities, touring the facility and meeting the staff with them and helping in gathering the paperwork necessary for the senior to move into the facility that best fit their needs.
While seniors were in need of such services typically after being discharged from a hospital or nursing home, many had the capability to return home as long as they had qualified home care support. Recognizing another opportunity, Newman added non-medical in-home care services in 2000. Always Best Care rapidly grew to become the leader in senior placement services and non-medical home care within central and northern California.
"No one else was doing both," Newman said. "We now work with more than 1,200 case managers, discharge planners and social workers. We became the one company that could handle all their discharge needs. We help hospitals and nursing homes expedite the discharge process, which is critical for them. More importantly, we take the burden off seniors and their families during a very confusing time. We can tell them, 'We will take care of these concerns for you so you can focus on what's important.'"
Always Best Care launched a franchising program in July 2006. Today it is the only company among franchised and independent competitors that offers "personalized" Assisted Living Placement Services and it is the only franchise concept that offers dual revenue streams through both non-medical in-home care and assisted living placement in a single franchise opportunity. Their revenue comes from two sources: in-home care (about $1.6 million) and assisted living placements ($600,000) for a combined total of about $2.2 million
A few other franchised senior-care concepts offer multiple-revenue streams but from disparate sources, requiring multiple marketing initiatives. Conversely, Always Best Care derives its two revenue streams from one referral source—the discharge planners, social workers and case managers who recommend its dual services to seniors and their families.
"What sets us apart is that our franchisees are essentially getting two franchise concepts for the price of one. It is very similar to co-branding in the fast-food industry," Newman said. "Other senior care concepts might have multiple revenue streams, but they have nothing in common except that they are health-care related. We make running the business much easier and profit margins more attractive by targeting our marketing to just one referral source but deriving two revenue streams from it."
Committed to being the leader in the senior care marketplace, Always Best Care has eight franchise owners in California, Texas, Colorado and Ohio, with franchises in Texas and Kansas tentatively scheduled to launch operations in May and June 2008, respectively. Newman expects to add two dozen franchisees in 2008 with the overall count swelling to 200 by the end of 2010.
Always Best Care is targeting eastern and southeastern U.S. markets for growth, with most expansion expected to result from multi-territory franchise owners looking to build an easily scalable business in the fast-growing senior services sector. The burgeoning industry has resulted from the country's senior population growing about twice as fast as the overall population since the 1980s.
An Always Best Care franchise can be home-based and is affordably priced. The franchise fee is $28,800 based on one territory of 200,000 people with the estimated total initial investment ranging from $36,200 to $57,500. Under a multi-territory discount, a second territory costs $21,600; four territories, $86,400 and seven territories, $144,000. Territories are based on protected accounts and population, not simply populations defined by zip codes.
"Our territories are structured to make them strong. We carefully look at how many hospitals, nursing homes and home health care providers are in an area to help ensure that our franchisees will be successful," Newman said. "Before we began franchising we studied what successful franchisors in other industries were doing to ensure their franchisees' success. We took the best of those ideas and incorporated them with our proven concept to create what we consider to be the best in-home care and assisted living placement franchise. How we define territories is only a piece of what we do better."
Indeed, while its business model alone gives franchise owners a competitive advantage, Always Best Care provides a highly acclaimed technological tool that further sets it apart: the ABC Virtual Office, the in-home care industry's first and only fully integrated online business application that supports a franchisee's entire business by providing consolidated business intelligence data at their fingertips anywhere Internet access is available.
"Virtual Office" allows franchise owners to focus more on marketing and less on administration and lets them make better and faster decisions through real-time business intelligence. The program took 18 months to develop at a cost of more than $250,000 and allows franchisees to cut their administrative staff needs by at least 50 percent as they grow. Among its top attributes:
The system automatically matches assisted living placement clients to the best care home based on their needs, income and geographic area.
The telephone-based system allows in-home care providers to clock-in and clock-out by making a call from a patient's home. The program then generates automatic payroll and billing data so clients are accurately billed and caregivers accurately paid, drastically reducing bookkeeping requirements.
The "Virtual Office dashboard" provides an instant glance at more than 20 key business metrics including profit margins, hours billed, key shifts, job openings and more.
Field representatives using laptops with tablet technology can view complete customer records, complete assessments, draw up contracts and send them to accounting with the click of a button.
"Virtual Office is a very strong component of the entire support package we provide to our franchisees," Newman said. "You go into business for yourself for a lot of reasons—emotional, financial, personal and many more. Virtual Office accomplishes a lot, including allowing our franchisees to have a good work/life balance."
Newman said a key factor behind the success of Always Best Care has been treating its franchisees as strategic business partners and committing to giving them every possible competitive advantage to succeed.
"People who have an interest in Always Best Care see potential in the senior care," said the franchisor.