A royalty that takes a third of your income and being restricted to a small territory – today’s franchises take a lot from their franchisees.
The Franchise Model
Franchisers are motivated to help their franchisees grow as they impose an across the board royalty on all revenue each franchisee makes. The franchise royalty usually works out to be 1/3 of the franchisee’s take home income. In addition, franchisees are restricted to providing their services within a small predesignated territory. What if their newly purchased territory is not so lucrative? Franchisees are forced to purchase another neighboring territory –assuming one is still open. Further expansion of a franchisees footprint always comes with additional territory purchase fees and restrictions.
What A Franchise Won’t Tell You
We are sometimes asked by those who have talked to a franchise how our AHI Group agencies will beat out the franchises who are already “embedded in their local community?” Our response is to encourage these individuals to go to a hospital or other healthcare facility in their local community and ask a discharge planner “could you recommend a home care agency to me?” What they typically find is that most of the discharge planners will refer them a home health company (for skilled RN care) and the ones that do understand the difference between non-medical and skilled home care will usually say “we don’t refer, we give out a list” and hand you a list of 5-10 home care agencies. If you look at that list you will see there may be some franchises listed on there but 1/2 of the home care agencies are usually not franchises (on average).
So, franchises are certainly not the only group out there getting referrals from the healthcare community. The reason being that everyone knows that every home care agency (franchise or not) is owned by an individual and that person can be a good or not so good manager of their business. There are great franchise owners out there and terrible ones –and these case workers have been around long enough to know that. In addition, a recent large study showed that 89% of caregivers will switch home care agencies for an extra $2/hour. Those agencies paying the most attract the best caregivers. Franchisees are paying 1/3 of their take home income to their franchiser and have less to pay their caregivers. The end result is a franchise has to charge the client more if they want to compete with getting the best caregivers.
No Name Brand In The Home Care Industry
The general public usually have no idea what the home care industry is all about–let alone know of a quality home care agency they can trust. The litmus test for this is to go and ask five of your neighbors this question: “Which home care agency would you recommend for my aging parent?” You will find some blank looks on their faces or scratching of heads. However, if you were to ask them: “Where can I find a good burger around here?” they would likely give you the name of a McDonald’s, or Burger King, etc. close to their area –because these are branded names in the food industry.
In reality, there is no name branding in the home care industry. There is no free lunch for a franchise. Everyone must go out there and make it happen to get noticed in their community and stay on the noticed list. This is where it is very important to have something that sets you apart from the crowd. Our unique all in-house Veterans Pension Benefit Program is one thing that sets our AHI Group members apart from the crowd and we guarantee that you will beat out anyone else in your community if they are doing anything with Veterans Pension Benefits. Request access to our “Intro To Home Care Video” series to watch a video on how our VA Pension Benefit Program beats out any competition in that arena –hands down.
No Territory Restrictions That Stunt Growth
AHI Group does not restrict its members to a small territory consisting of 250,000 people – like a franchise does. The average city has 10% seniors located within it. So, if one has a territory with 250,000 people that leaves 25,000 seniors in that community. On average, about 10% of seniors need assistance with activities of daily living. Therefore, that leaves 2,500 seniors who will need your services. Depending on the existing competition in your community, this may or may not be an issue. However, why take the chance of restricting yourself to such a small area when starting out? What if you get your foot in the door of a hospital or healthcare facility that is “outside” of your area and you are not able to get that same foot in the door in your own area right away? You are passing up massive amounts of potential revenue when you are not able to move where the business and your marketing efforts lead you.
AHI Group wants you to have the best chance of success and so it does not restrict it’s member’s ability to market wherever they want. After all, we cannot stop every other home care organization out there moving into your “protected territory” – even if we were to restrict our other members from coming into your area. We believe it is better to allow the 1 or 2 potential other AHI Group members to have access to your area rather than restrict them that access and therefore have to restrict you and them to a territory that we cannot protect from all the other home care companies out there.
Deciding where you want to market and being able to follow your leads – wherever they take you – with the constant backing of our coaching team will allow you the best opportunity to grow your business during that all important first year.
Giving you the option to market wherever you get a “foothold” and having our seasoned coaches/support team behind you every step of the way will give you the edge needed to help ensure your success. It is important that you go into your local market place with both hands free and professional coaching/mentors behind you – as opposed to struggling with one hand tied behind your back due to a small territory or no solid support system. That’s what we call flexibility, innovative thinking, and unlimited revenue potential!
Hire Quality Caregivers Despite The Shortage
Hiring quality caregivers can be a challenge for franchises in today’s market place because of two factors. First, franchises cannot pay their caregivers top dollar due to their franchise royalties eating up a third of their net profit. AHI Group members can take that 1/3 of their profit and give it to their caregivers who get paid in the top 20% of wages in their area. By paying in the top 20% of wages, AHI Group members can attract the most quality and qualified caregivers in their area. This leads to less administrative time spent managing low quality staff – which results in happier clients – due to the quality care they receive from the most competent caregivers.
Second, franchises offer a lack of career advancement tools for their caregivers. Through our relationship with the Association of Care Services at Home, our members get a 75% discount on the cost of Certified Senior Care Aide® Certifications. Certifying one’s caregivers allows our AHI Group members to gain the “Excellence In Home Care® – Trusted Provider” certification at a 50% discount which helps them stand out from other agencies in their local community.