Filling niches in health care - franchises

Nation's Business, Dec, 1991 by Meg Whittemore

The strongest employment area through the year 2000 is projected to be delivery of health-care services, according to the Bureau of Labor Statistics of the U.S. Department of Labor. For franchised businesses aimed at this high-growth rea, the future is bright.

Health-care franchises encompass a wide range of products and services. There are franchises that provide home health care, wheelchair services, hearing aids and hearing-disorder treatment, dental care, and physical therapy. Also serving the health-care field are franchised birthing centers, optometry firms, osteoporosis diagnostic centers, medical-equipment suppliers, wellness-information centers, and nutrition clinics.

Edward Grant, president of Health Force, a Westbury, N.Y., employment-services franchise specializing in health-care temporaries, explains why his outlook is bright: "New technologies, the growing elderly population, and increased health-care spending are expanding the need for professional health-care temporaries."

Health Force franchises place registered nurses, licensed practical/vocational nurses, physical therapists, technicians, home health aides, homemakers, and companions in temporary positions within the medical community.

The hourly rates charged to the client depend on the level of care required. For example, a homemaker--someone who performs the daily operational routines of running a home--commands $11 per hour. The charge for registered nurses is $35 to $45 per hour, depending on the location of the franchise.

"The home health-care worker is in high demand right now, and that trend will only get stronger," says Grant. "Hospitals have become the centers for critical care such as operations," he says, "and patients are sent home to convalesce."

The escalating costs of nursing homes and hospital stays, advanced technology, and the social variables that encourage home care--such as the graying of America--"all combine to provide us with a very positive growth outlook," says Grant.

Grant started Health Force in 1975 as an outgrowth of his clerical temporary-employment service, Career Placements, which he had begun 10 years earlier. Currently, Health Force has 63 franchises nationwide and is opening an average of two locations per month.

Health Force franchisees are a special breed of professional, says Grant. Along with the usual franchisee requirements of management experience, financial backing, marketing and sales skills, he says, "you have to be a loving, caring person."

"It is not a 9-to-5 kind of job," he says. Franchisees often find that their clients require round-the-clock attention, seven days a week. "This franchise is not for everyone," says Grant.

Start-up costs for a Health Force franchise are $114,500. Monthly royalties are 12 1/2 percent based on gross monthly sales. Health Force provides training, computerization, payroll production for temporaries, invoicing, and national quality standards.

Serving the needs of the at-home patient, the elderly, and the disabled is clearly a market niche that is attracting the attention of entrepreneurs who not only want to make money but also want to do some good for other people, says Edward Van Artsdalen, founder of Wheelchair Getaways. The firm, based in Newtown, Pa., is a van-rental franchise offering specialized transportation to people with disabilities.

The frustration experienced by a disabled friend who needed reliable transportation was the impetus for Van Artsdalen's decision to become a franchisor. "I realized that there was an urgent need among the disabled for convenient, inexpensive transportation," he says. In 1988, he started to work with the disabled in his community to figure out how to meet their transportation needs.

Van Artsdalen discovered that although there were many companies converting vans for purchase and use by the disabled, few firms were renting vans that the disabled could use for short periods.

"I listened to the disabled community and learned that their quality of life could be tremendously improved if they had the means to travel," he says. However, most disabled people can't afford the $20,000 to $30,000 price tag of a fully converted van.

Van Artsdalen, who previously owned a successful school-bus business, bought two vans and had them outfitted with power lifts, raised roofs, tinted glass, plush interiors, and the most advanced tie-down system for holding an occupied wheelchair firmly in place while the vehicle is moving.

"The disabled loved the idea," he says. "Finally, families could rent a van and take a day trip or go away on vacation. It provided a lot of independence."

The vans rent for $85 per day, and customers sign a typical car-rental form, agreeing to drovan at the location where it was rented.

Total start-up costs for a Wheelchair Getaways franchise are $75,000, which includes the franchise fee, training, and two fully modified vans. Much of that cost can be financed if the vans are leased from Van Artsdalen, he says. In addition, a flat royalty of $500 a year per vehicle is charged regardless of whether the vans are bought or leased.