With a flurry of recent investments, the private equity backed, franchise networks today include Senior Helpers, Right at Home, Home Care Assistance, Home Helpers, Always Best Care, ComForCare, and Interim Healthcare. The private equity investors respectively are Altaris Capital, Investors Management Corporation, Summit Partners, Linsalata Capital Partners, Plenary Partners/Gemini Investors, The Riverside Company, and Levine Leichtman Capital Partners.
Each will bring their own scalability initiatives designed to create marketing muscle, recruiting/retention advantages, economies of scope, and back office efficiencies from cutting edge technology. Some of the national franchise networks are establishing company operations to run the acquired agencies. Others plan to sell the acquired agencies to aspiring franchisees upon rebranding. In some cases, existing franchisees in select markets are being acquired by the franchisors. In others, under-performing franchisees are being transitioned out.
Meanwhile, the remaining technology driven players, including Honor, Home Team, and Kindly Care, are fine tuning their investor backed business models in preparation for national expansion. They too are likely to target independent agencies to convert to their platforms as a speedier and more viable alternative to start ups. They have a new appreciation for established assets like brick and mortar, reputation, a client acquisition apparatus, a proven office team, a caregiver workforce, and market knowledge. In a mature industry, these assets have become difficult to build from scratch.
As the evolution towards fewer agencies, bigger brands, and better operators accelerates, there’s no better time than now to use this Home Care Benchmarking Study to do some serious self-assessment. If you’ve been operating for 10 or more years, yet you’re not a leader, you need ask yourself “why?” What are your prospects of becoming one amid industry consolidation? If you can’t beat the national brands, should you join them? If so, how sustainable is your historical financial performance under new ownership? How transferable are your intangible assets? How convertible is your business to a national brand?
One might say the home care industry is being divided into the hunters and the hunted. Survival of the fittest will determine the winners and losers. We believe the powerful combination of a national brand and local ownership will be among the distinct winners creating expansion and exit payday opportunities for investors and owners. Like most windows of opportunity, knowledge, planning, and preparation are key.