Home Care Is Big Business – Globally

What will ageing folks without available kin do for companionship and support in their later years? Providing that answer has propelled Home Instead Senior Care into an international franchising dynamo that reaped $661 million last year and projects a 2009 jump to $738 million on domestic growth of 10% and 26% growth internationally.Home Instead

With people over age 65 rising from 7% to 15% of the world’s population by 2050, Home Instead was the first to franchise a new senior-care niche: nonmedical companion-caregivers. This article in Time explains that in most of the world, private-pay care services are virtually unknown. But with seniors’ numbers soaring, public care dollars shrinking and extended families geographically scattered, Home Instead is mining a virtually untapped and limitless market.

Caregivers, usually female and aged 55 to 60, are assigned for 15 to 20 hours a week. The typical cost in the U.S.: $18.40 per hour, with the caregivers getting $9.43 of that. Besides helping with activities ranging from cooking to laundry and playing Scrabble, the caregivers may also plan excursions, such as having lunch in New York City, viewing cherry blossoms in Osaka or taking in cattle auctions in New Zealand. Depending on local regulations, some franchises also offer personal care.

The business model called for marketing to professionals like geriatric-care managers and hospital staff, who would refer clients. The first franchise was sold in 1995 and has steadily racked up sales to 874 – currently sold for $35,500 each and 5% of royalties. New owners visit Omaha, where they learn staffing, pricing and marketing and imbibe the company’s feel-good vibe of helping seniors.

Yoshino Nakajima, an American-educated, Japanese-born woman manages the Japan business.

They partnered with the huge Japanese housekeeping franchiser Duskin. But the difficulty was selling the idea of for-pay companionship to the public and government-subsidized health-care gatekeepers. In a media blitz in 2000, Duskin coined the word companionshippu. But only patience and painstaking matching persuaded elders to bring a stranger into their typically small, private realms. “The seniors,” Nakajima explains, “would invite the caregivers first to pull weeds in their garden and size them up from the window. Afterward, they’d invite them in for tea.”

With Nakajima heading global development, 268 franchises have sprouted in 15 countries, from Portugal to South Korea, always with a local master franchiser to navigate native customs. In New Zealand, for example, managers must observe such niceties as never matching a Maori client from the Ngai Tahu tribe with a caregiver from the Tainui.

Competing franchises have sprung up, but only one, Comfort Keepers, has expanded abroad. Besides, there’s plenty of business to go around. Even in dismal 2008, the industry expanded. While some clients have trimmed hours in the downturn, new ones just keep coming.

The wave of seniors is unstoppable, and so too is the business they bring.