Assisting Hands: The recession proof franchise model

Speaker A: 10,000 people a day turn 65, which is already kind of mind blowing in the U.S. uh, but because of my technology background, I'm a little geeky. So I put that in a spreadsheet comes out to every 8.64 seconds someone turns 65 in the US then they are invited out to our discovery day which is in person in the Boise, Idaho area. It may involve riding a horse, so spend that money networking in the community rather than send it to corporate so they can run some stupid super bowl ad to stroke their private equity partners egos.

Speaker B: Uh, welcome to the Zero to Profitable Franchise Podcast. The best place for you to come to figure out the right franchise to buy and how to get and stay profitable. My name is Tarek Johnson and I've bought, grown and sold multiple franchises and got myself free from corporate America. And now I'm on a mission to help you do that too. Here you'll find some of the most in depth profitable franchise secrets, tangible strategies and specific mindsets to help you create your dream life through franchising.

Speaker C: Thank you for joining the Zero to Profitable Franchise Podcast. I'm your guest host today, Chantal Soumas, coming to you with a wealth of wisdom in franchise marketing. And today we are going to be talking a little bit more about the Silver Tsunami. Um, this is a big, a big demographic shift, uh, and it's commonly known as a silver tsunami. Because of the sheer volume of demand for the home care, it can feel very overwhelming. Um, but today's guest represents a brand that has cracked the code on scaling with soul assisting hands. Home care is a nationally recognized leader in the non medical in home care space. Boasting over 120 locations across the country. They've built an exceptional reputation not just for keeping seniors safe, happy and healthy at home, but for doing it in a highly collaborative franchise model that they call the fofo. The family of franchise owners. If you're an aspiring business owner looking for a recession resistant industry, massive exclusive territories and a unique model designed to scale, you're going to want a notebook for this episode. Joining us to break down how they build this network from the ground up is the brand's director of franchise development. He brings 23 years of franchising mastery to the table and is the architect behind growing their incredibly tight knit family culture. Welcome to the show, Dan Durney.

Speaker A: Well, thank you for having me, Chantal.

Speaker C: Look, I'd love to give everybody an opportunity to learn a little bit more about you and what you're doing with um, that really impressive role of the FOFO building and scaling and ultimately delivering exceptional care. Can you take us behind the scenes a little bit further?

Speaker A: Sure. Well, the FOFO family of franchise owners is one of our many acronyms that the president and CEO of our company, Lane Kofed, uh, came up with. And we found out as a side note that it means cute or fluffy in Portuguese. How terrific. So I didn't architect the, uh, culture. It really comes from a couple of things. One is our family focus on family, uh, culture that comes uh, from Lane and his family down through the franchise ranks. And we look for people who have that same, uh, affinity for providing care for families. So we really look for people to have a heart for the business. And some people, excuse me, and some people management skills. Um, but the FOFO is basically, basically one of our levels of support that our franchisees actually help each other. In a network of franchisees, in addition to our national support team, as well as, uh, in 25 markets, we have something called an area representative, which is like a area developer master franchise. And they provide extra levels of support. So it's a community of franchisees helping one another do the best at what they're trying to accomplish in their local markets. And just to speak on the silver Tsunami, Just to speak on the silver Tsunami, often the number that's kicked around is about 10,000 people a day turns 65, which is already kind of mind blowing in the U.S. uh, but because of my technology background, I'm a little geeky. So I put that in a spreadsheet and it comes out to every 8.64 seconds someone turns 65 in the US

Speaker C: which is, bring that into perspective. Yeah, no kidding.

Speaker A: Yeah.

Speaker C: The family oriented business that you have and then the family oriented culture that you have I think is really special. And I know that a lot of organizations, especially from the marketing lens, right. Sitting in the seat is the fractional CMO that I used to be for franchisors. People strive to get there. They businesses really try hard to make that happen. Can you tell me a little bit more about how that works? Like how does maintaining a family centric corporate, corporate culture function as a competitive marketing advantage as well when recruiting new business owners?

Speaker A: So it's interesting, a lot of people who come into our system, well, in fact, we have nobody that's ever owned a home care agency prior to joining assisting hands. I think currently, as of Today, we have 15 nurses, three social workers, two physical therapists, and a pharmacist. That's as close as we get to the industry. So we have people from it. Construction, insurance, banking, education, military, food, even a couple of attorneys are franchisees. Oh, you know the good news about that? That's two less attorneys. But they all have a common thread. Uh, they all have a common thread is they all have a heart for the senior care business. And usually it's because they've experienced something in their family, caring for a grandparent when they were young or seeing their, um, mom care for a spouse or other loved ones. So they all have a heart for the business and want to help, uh, out and provide the care in the community for this. For such a vulnerable population.

Speaker C: That's beautiful. I want you to walk me through the discovery process a little bit more. When a candidate's looking at assisting hands, what are the primary indicators that tell you, yes, this person belongs in our fofo? And conversely, what are the red flags? What are the red flags that might show you that this isn't the right model or the right system for them?

Speaker A: So most of our candidates come from referrals from franchise brokers and consultants who we spend a considerable amount of time and effort, uh, training so that they know who to look for. Because typically they'll have an initial conversation with them and trying to explore different opportunities in franchising. And what they won't typically hear is someone proactively say, for example, I cared for my grandma when I was in college. What do you have in senior care today? People don't even know that it's a thing until they need it. Um, but what you will hear is that the candidate will say things like, I want to build a business that gives back to the community. Or my career has been building business for somebody else. I want it now to have an impact, uh, on society. I want to build a legacy business for my children, for example, so, and something for the family. So those are little phrases that kind of crack open the potential door that this might be a good fit. But we're an owner, operator type of business and not semi absentee. So people need to be committed to doing this. We've also had people share with us that they feel that this has been, they've been led to this kind of from a faith based standpoint, to be fair, um, and that this is just the right time to do it. And they're finding that the values are aligned with the management and the company with assisting hands. But our discovery process is basically five steps. And the first step is getting to know the franchise candidate and finding out why they want to be in senior Care and kind of where they're at now and who would be involved in the business. Um, so red flags include, well I want to do this part time while I keep my job and then we'll see how it goes. That's, that's a red flag I'd say. But if they have the financial resources to be able to commit the full time, um, doing it. So the first call is an overview of the business model as well as uh, getting to know the candidate. And I tell the candidates on the first call that they're going to find me to be more of a tour guide type of person because I'm triggered by three things. Typos, French words that are mispronounced and pushy salespeople.

Speaker C: All right, good to know those three things, Dan. I appreciate it.

Speaker A: Um, so then the second step is we go through the disclosure document, uh, the FDD and help them uh, get the questions answered to that. And uh, then the third step is we do a licensing call with someone on our support team that goes through the state specific licensing requirements which varies wildly from state to state. Florida being on the high end of regulation and, and then out here in Arizona where we have no licenser for home care, but we go through the licensing costs and timelines and renewal. So they have a good idea of what it's going to cost and what it's going to take to get licensed. And then the fourth step is validation where they talk with other franchisees and our franchisees validate very well. They will share that. It's a tough business. It's a 24 by 7 type of business. But um, it's very rewarding and we have a lot of flexibility in assisting hands where we don't micromanage their business. So we don't dictate the cases they take or the payor sources that they use. And so they can choose how to kind of. You ever heard of guardrails versus train tracks analogy?

Speaker C: Mhm.

Speaker A: So a lot of franchises are very train tracky. Just do exactly as we tell you, don't deviate in the slightest. Also the point where it strips out the personality of the owner. And to be fair, most people go into a franchise restaurant, they don't care about the owner. As long as the food's decent, the place is clean, the service is okay. But in senior care, a lot has to do with the personality of the owner. Are they um, approachable, can they communicate the message of what they're uh, doing, um, and why and that they're hiring caregivers that only that they would send in to care for their own family members. So a high level of um, responsibility for hiring the right kind of people. And so we go through a validation process where they get a chance to individually talk to franchisees over the course of a couple of weeks to um, validate what they've heard from me, what they've seen from the fdd. And, and then if they're done, when they're done validating any franchise candidate basically is one of two situations. They're either 90% convinced that's the brand they want to be with or a hundred percent convinced they want nothing to do with those knuckleheads. And uh, so if they make, if we make the 90% cut, then they are invited out to our Discovery Day which is in person in the Boise, Idaho area. It may involve riding a horse. Hey.

Speaker B: So I recently put together a list of five low cost franchises that make $1 million or more. If you want to see that list, then click the link below in the description or go to franchiseempire.com lowcost well let's get back to the episode.

Speaker C: I love it.

Speaker A: Thanks for the warning. Our CEO and president, um, is a rodeo roper and he also has a 20, uh, year old son who's 6 foot 2 and he's a world ranked rodeo roper and steer wrestler. Uh, so we go to their ranch and have dinner uh, with the family and kids and saddle up some horses right around the property. That's the day before Discovery Day.

Speaker C: I mean you're living the values of your fofo model totally.

Speaker A: And you learn a lot about a person, how they interact with animals and they're really super skittish or whatever. And so anyway, it's just a, it's a very unique Discovery Day that we have. Um, but uh, but during the, the next day of Discovery Day where they meet the rest of the management team and the support staff, they get a chance to share why they want to be in senior care and how they plan to operate the business. So it's kind of a, almost like a group interview kind of situation. And then if they get approved because the national team feels they would be a good addition to the family, we only add normally about 20 a year. So we're very selective. We take our time and we are proudly not owned by private equity.

Speaker C: That's a big differentiator right there. A lot.

Speaker A: It's a big, big differentiator, especially in senior care right now.

Speaker C: So when you're taking folks through the discovery process, are you Explicitly vetting them for their potential to scale to those multi unit owners or area representatives later on.

Speaker A: Not specifically. We want the territories in senior care are big enough that uh, you can do multimillion dollar business out of one territory. You can have 50 clients or less in some cases and have a million dollar business. It doesn't take that many clients in senior care. Um, but uh, if the, what we do do is if the franchisee expresses an interest early on about being an area representative, if that's available in the, in their area, um, we have them become a franchisee first and run it uh, for 12 months or so to demonstrate operational proficiency before we would consider uh, approving them to step up and be an area representative. Because an area representative basically is a franchisee who has operational experience and that it has made the investment to help develop, coach and mentor the franchisees in the local market to grow it. And we have 25 of those around the country.

Speaker C: Fantastic. I want to go back to something that you mentioned earlier. We were talking about guardrails versus the train tracks which is another big differentiator in franchising. Um, because home care is extremely localized and it's very built, it's, it's heavily built on trust based business. Right. And building that trust requires that form of personal touch and personality. So from a corporate perspective, how does assisting hands balance providing the robust scalable national brand marketing resources while still giving that flexibility to the local owners to adapt that distinct culture, the cultural nuances of their specific regional markets?

Speaker A: Well, let's back up and take a look at the business model. The core business model is in home, primarily non medical, targeted towards seniors. But if a franchisee decides they want to offer care for people with a post op recuperation like a hip or a knee replacement, whether the person's a senior or not. We don't exclude non uh, seniors from, from care. We have some franchisees that have had women that are high risk pregnancies where they're on bed rest for a few months before they give birth or a little afterward. Uh, some franchisees work with special needs like Alzheimer's and dementia which you would expect, and even autism. And a handful of our franchisees also have developed a pretty strong business with working uh, with developmentally disabled adults. So that's where the customized nice nature of the businesses because we don't dictate, we don't micromanage them, we don't dictate the cases they take and if they want to go down a particular path, we've got full Support for them to do that.

Speaker C: I love that. That way they can make the business truly their own in that circumstance. Beautiful. So for the entrepreneur out there listening who wants to get into the senior care space but might be terrified of the economic climate, why is right now actually the perfect time to start the discovery process?

Speaker A: Because of that silver tsunami, it is not going away anytime soon. We're not only a lot of franchises are recession resistant, we're also pandemic resilient. We actually grew about 20% during the pandemic for a couple reasons. First off, caregivers have always been considered essential personnel. Um, and so we had folks that had loved ones that were in a facility that they pulled out of facility where Covid was running rampant. But there was a reason they were in a facility. Um, they needed some extra care. And so we were hired in to help the family care for their loved one. And then in other situations, um, we're able to also provide care in a facility where they for period of time they were locked out, for example, or they just need some extra companion care or help. And some of our franchisees actually have an additional revenue model where they set up like a little mini office, so to speak, uh, micro office on site at a larger assisted living facility and dispatch out caregivers as needed. Because we provide care in three different venues, the seniors own home is where we try to help them stay as long as humanly possible, where they're safest, most comfortable. And then sometimes the loved one has moved in with a family member. And so we're giving a break to the family member because that changes the whole family dynamic when they have to be come the uh, caregiver. And then, uh, like I mentioned, the third venue is sometimes in an assisted living facility. Could be in a memory care unit community or it could be in the independent living. So multiple revenue streams from that standpoint.

Speaker C: Uh, so from, from a business feasibility standpoint, why was the model structured this way? And how does having multiple revenue pillars accelerate a new owner's path to market saturation?

Speaker A: Well, saturation again is not something that we're seeing in the foreseeable future. There are a lot of franchises and also independently owned, um, home care companies just in the Boise market, which is approximately about a million total population in the greater Boise area. There's over 130 providers in our corporate offices, still do over 6 million in revenue with 130 competitors. So the business model is targeting a growing segment of the population. That growing just doesn't describe the uh, opportunity. It's exploding seniors, kids and pets are typically the top three categories. And then home services and then uh, fitness and health are the kind of the top five. I'll get someone that sometimes is looking at senior care and then one of those others like senior care and a kid's training or senior care and something pet related. I don't ever get senior care and food. Those are kind of two different sides of the brain someone's working out of. But uh, but we really just to talk about who we look for is someone who's got people management skills is very helpful. If they've been in staffing or hr, they've built and led teams. Um, because a lot of this is about building the team. And if you think of the analogy of a franchise restaurant where the employees, uh, are working shoulder to shoulder bussing tables and taking orders and whatever, that's a different environment than senior care because you get a new client, the caregiver is matched up with that client, and then the caregiver goes to that home to provide the care. So building a family culture within an agency is very similar to the franchise system itself. Because he had a new franchisee. A franchisee is in their own market. So we're looking for people that can build the same family culture within their agency of caregivers as we are building with the, with the community, uh, of franchise, the fofo, the community of franchise owners. Family franchise owners.

Speaker C: What systems do you have in place to help coach and support that those values are being lived through and through across the nation?

Speaker A: Well, it's kind of inherent in a person's personality. Um, so that's what we're looking for when we're taking them through the discovery process is that it's not so much a system so to speak, as it is got to be an inherent core value of the person that they want to do the right thing for the right people. We believe if you take great care of the caregivers, they'll take great care

Speaker C: of the clients 100%. And I think that the circling back around to your main cultural differentiation, which is that you're fofo, right. And the fact that you are franchisees that help other franchisees throughout the process, I think that's some of the system that set up for building a successful new owner.

Speaker B: Hey, so if you want to learn the right way to own a money making franchise without putting your family at risk financially, then check out our free, free masterclass@uh, franchiseempire.com masterclass. Let's get back to the episode well,

Speaker A: we've had franchisees who, candidates who go through the um, validation process. And we tell them when they send out the email to request a validation call, just tell them you're looking for 15, 20 minutes. And then I do a follow up, weekly or so follow up call to find out how the calls are going. And inevitably they tell me, well, I spoke for an hour with this franchisee and they, I finally had to say, hey, I got to get off the phone. Our franchisees will talk their ears off because they love the assisting hands, they love the support, they love the business and they appreciated, they went through that same process where the franchisees are giving back and sharing their experience.

Speaker C: I love that energy. We need more of that energy as well. You can hear it in people's voices, I suppose. And it all comes back to the personality. The right personality, the right fit and so forth, setting them up for success. But I want to drive back into the financials of, um, your business so far because there's something to be said about your sliding royalty scale. Can you take me down into more depth there under the hood?

Speaker A: We start off at 5%, um, and then when the franchisee grows their business and hits the first break point and maintains it, it drops to four and a half. And then they grow it to the next break point, maintain it drops to four. So it's very unusual in franchising for a franchisor to reduce the royalty, um, percentage. But it didn't. But it uh, incentivizes the growth.

Speaker C: Beautiful. I feel like that's very unusual and it rewards that growth tremendously.

Speaker A: Yeah. And the other thing is our advertising, uh, fund. Most companies are 2 or 3% or higher. We are 0.5 or half a percent. And go back to your comment about where the most effective marketing is. It's because we feel that it's the, the marketing money is best spent by the franchisee in their local market doing the activities of networking with referral partners, hospitals, doctors offices, skilled nursing facilities, rehab centers, et cetera. So spend that money networking in the community rather than send it to corporate so they can run some stupid super bowl ad to stroke their private equity partners egos.

Speaker C: Uh, I can see where your passion rests, Dan. Um, okay, you know, you're right. Word of mouth marketing is the strongest form. And it's not something you can buy. It's something that you have to build through trust. So it all comes full circle based on the community that you're building, the culture that you're, uh, building on top of the foundation that you have set from the family oriented operations. Now I want to talk a little bit more about territory mapping because some brands tightly pack territories to maximize their own franchise fee collections, leaving owners bumping heads with each other.

Speaker A: Right.

Speaker C: So assisting hands though is known for its exclusive a territories. Right, that's what I'm reading. Uh, can you tell me a little bit more about that? There are usually significantly larger protected markets, um, and so forth, but I want to know.

Speaker A: Go ahead, go ahead.

Speaker C: I want to know what the corporate philosophy behind granting larger territories is and how does that maximize an owner's long term enterprise value if they want to sell their business down the road.

Speaker A: So our territories are zip code protected. So if you had a particular set of zip codes and our territories are approximately 225,000 in total population, but we make sure there's a minimum of 25,000 seniors over 65 and, and some territories, just because they happen to have a higher percentage of seniors per capita, they might have 30, 35,000 seniors. We don't charge a per head, we don't do a lot of nickel and dime kind of stuff. So sometimes someone ends up with a larger territory. And our demographic reports show, uh, the pop is break down the population by age and zip code and income. And so it's pretty detailed. Uh, demographic reports. Um, but in, if you had this particular territory and you were neighboring another Assisting hands franchisee, if they had a referral in one of your zip codes, they kick it over to you and vice versa. So everybody plays nice in the sandbox, so to speak. Now having said that, if you had this territory and you had a referral for a client next door outside one of your zips, but it's not owned by another Assisting Hands franchisee, you can provide care outside your territory. But just recognize that, uh, you know, if someone comes along and acquires the neighboring territory, then the clients are transferred once the franchisee, the new franchisee is able to provide service. Yes.

Speaker C: Correct. Okay, interesting. How often do you see that happen?

Speaker A: Uh, it doesn't happen really often. Um, franchise. It depends on the, on the state and, and the regular, the licensure, um, regulations, et cetera. So there's various factors that come into play. Um, but we've had franchisees who have, who bought a territory, started marketing, got a few clients in the neighboring territory and then reached out to us and said, okay, I think I'm ready to go ahead and take that territory.

Speaker C: It makes sense. Yeah, it's a nice growth predictor too, to have them reach out and grow

Speaker A: like that yeah, we have about an average of 2 because we have about 125 or so franchisees covering uh, a couple, I think it's 240 some odd territories. So it's approximately a uh, two to one okay ratio but we tend to award a single territory initially and have them build that up and show that they know how they're running it because we had people in the past who bought up spend all their money buying zip codes and then money m to market with.

Speaker C: What percentage of your franchisees would you say have medical experience or healthcare experience?

Speaker A: Very very few. Like I mentioned, uh, about 10% of our system are nurses. Um, so it's very very few. And by the way we offer the as an option but not a requirement at all. If the franchisee wants to get into the skilled nursing side that's an option. But out of our like say out of our 125 some odd franchisees we only have three that have a skilled license and it's a very small percentage of their business because there's so much business on the non medical side and less regulation and plus we find our franchisees are typically partnering, referral, partnering with the French, with um, excuse me, with the skilled um, nursing because they want to come in and do the wound care and the medications and then leave. They're not looking to stick around and do the activity helping with the it's known as ADL's Activities of Daily living, Bathing, feeding, dressing, companion care, lighthouse keeping, trips to the doctor. Those are all the services that we're typically providing on the non skilled side.

Speaker C: Yeah, that makes sense. So in your 23 years of franchising, what are the exact soft skills or leadership traits that separate a topic, top performing, assisting hands, operator from someone who struggles to get off the ground.

Speaker A: Someone who can follow a system but they're entrepreneurial. That's very generic franchise kind of thing. Now I'm actually going to do something very rare here. I'm going to give props to a franchise attorney that shared something that I learned from them years ago and that, that is he was giving a presentation at a expo and one of the breakout sessions was about becoming a ah, franchisee. And he said if I was a new franchisee and the franchisor told me to put, when I get up in the morning, put my left pant leg on first and then my right pan leg for at least the first six months I would do it because I just paid all this money to follow the system. I might as well try it, see if it Works. So following a system, uh, but having an eye to personalizing it, um, are ah, good traits for growing the business. But, and we, and we have staffing requirements. You need to staff it with a scheduler, recruiter and someone doing marketing. Because there's two things that don't work in this business. One is trying to do it part time while you keep a full time job, which we don't approve anyway. And number two is one person, no matter how talented they think they are trying to do everything themselves. So franchisees that get out of the gate slower struggle are typically trying to do that themselves, all about themselves.

Speaker C: I love it. Uh, it sounds like Assisting Hands is really a truly special place to be to work in at corporate but also operating at the local level. Do you have any final words of advice for folks who are looking to start their own business but just don't know what to do next?

Speaker A: Listen to your heart and make sure that you're aligned with the management and the direction of the company. Because nothing worse than having conflict like that. That's what I've seen over the years in franchising. And by the way, this is my second go around with Assisting Hands. I was around at the very beginning when it was first put together when I was working with a development company. And then, uh, then I left that development company, did some other franchise development. And then seven years ago I was recruited back to replace the lady who had replaced me who retired when that happened. They were like, I wonder if Dan's available. He knows Assisting Hands so fired four clients to come back to Assisting Hands. And on a personal note, on a personal note, it's been a great blessing to be associated with people that are family oriented, they're uh, also faith based and just do the right things for the right reasons.

Speaker C: It's very special.

Speaker A: I feel like that it's fun, it

Speaker C: acts as a magnet. You know, once you have that strong, you know who you are, you know the company knows who they are. They know their values, they know what they stand for. And once you have those non negotiables, it's magnetic. You attract the right folks and it creates a very strong and powerful launchpad. Uh, to success.

Speaker B: Yep.

Speaker C: Beautiful. Well, I appreciate you being straight with us, Dan. And around here we don't forget the brands that tell it like it is. So to all our listeners, if you're looking at Assisting Hands home care for your next venture, grab a territory check and get on a call. Head over to Franchise Empire for all of our resources, rate, review and subscribe if you got value from today. And we'll see you on the next episode.

Speaker A: So we really appreciate working with Fran. We totally appreciate working with Franchise Empire. Thank you so much.

Speaker C: We appreciate you having on the call. Dan, thanks so much. Fantastic.