Franchise Models Differ On Visions For Elder Care

(Monday, June 23, 2008) - Paul and Lori Hogan's senior-care business seeks to duplicate the way a network of relatives would help an elderly person.

That simple idea, combined with a sophisticated system for building franchises, has connected the Omaha couple's Home Instead Senior Care Inc. to nearly 800 such ventures in the United States and 11 foreign countries.

Four more countries will join the roster this year, when companywide revenue is expected to reach $650 million.

The Hogans developed the business concept in part from his family's experience in the last years of his grandmother's life. Family members helped her with meals, exercise, social involvement, housekeeping and other tasks.

Paul Hogan didn't stumble into franchising.

He studied franchising in college and worked for Merry Maids, a home-cleaning company founded in Omaha. That's where he learned the skills he would need to turn his elder-care concept into a success.

The Hogans implemented many of Merry Maids' other principles, including: "To honor God in all we do."

Hogan said prospective franchise owners should understand the company's spiritual focus, which supports the whole idea of serving other people.

"We want them to know what our values are before they decide," he said.

Franchise owners don't have to have the same values, but he encourages them to write down their values, whatever they are.

Home Instead gets more than 5,000 inquiries per year and selects 40 or 50, he said.

Those who do best on the profile tests used to screen applicants turn out to be the most successful, Hogan said.

Because Home Instead provides no medical care, there is a greater pool of prospective employees.

"We realized you didn't have to be a doctor or a nurse to have a big impact on a senior's health," he said.

Home Instead revenues have more than doubled since 2004, and demographics indicate more growth, he said.

Census figures indicate that by 2030 the number of Americans older than 65 will grow from 36 million to 91 million; those over 85 will double to more than 10 million; and people older than 100 will grow from 200,000 today to 2.5 million.

Many will not need in-home medical care if they have the assistance of a trained caregiver, Hogan said.

In a foreign country, Home Instead equips a "master franchise" company to oversee local franchises, handling training, marketing and other functions of a central franchise office.

Last month, the Hogans were at the White House to receive an award from President Bush and Commerce Secretary Carlos Gutierrez recognizing the growth of their international franchises. The company expects $68 million in international revenue this year.

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