Care home franchising: what are the pros and cons?

May 18, 2022

It’s no secret that the care home market is growing thanks to our ageing population in the UK. Indeed, the Office of National Statistics predicted there would be a 36% rise in people aged 85+ between 2015 and 2025 alone.

If you want to align your career and income with your sense of purpose for helping people, the residential care home sector for the elderly is a good place to position yourself. 

It comes with much responsibility, but it can be a rewarding industry to be in, thanks to the support you’ll be giving to vulnerable people in our society.

Due to the level of care and responsibility required, you will find there are some high barriers to entry. There will be many challenges to consider. 

One option to hit the ground running is to purchase a residential care home franchise. 

A franchise is an authorisation granted by an existing business to an individual, who is free to run one of its branches, albeit under strict commercial rules.

Here is a look at the pros and cons to be wary of with this approach.

Pros of care home franchising

As with many franchise opportunities, you will be buying a proven methodology for success. 

That isn’t to say you are guaranteed success. You’ll have many of your own decisions to get right to achieve this, as well as the luck of the draw in economic conditions – just like any business.

But what you are likely to get with a franchise includes a bespoke training programme, help with business planning, recruitment and marketing toolkits, cost-effective access to suppliers like IT support, printed and digital marketing material and an established brand.

Given the range of disciplines that would be required to get all of those in place from scratch, having them ready to go out of the box, so to speak, is a major head start.

A franchise will want to protect their own brand and therefore do some robust vetting of potential franchisees. While tough to go through, succeeding can be a great confidence boost to yourself.

Meanwhile, if you’re unsuccessful, you can go away knowing which areas you need to improve before you invest considerable sums into something you’re not quite suited to yet.

Cons of care home franchising

Of course, for all the convenience you get with a franchise package, you will not have as much freedom in how you run your business. Instead, you will be expected to adhere to franchise policies and branding that some may find restrictive.

Then there are the franchise fees to consider, which will be paid to the franchiser on a prearranged agreement.

These vary in structure but could take the form of fixed fees, percentage fees or a combination of both. 

While you may get good value through economies of scale for all the marketing, IT, systems and recruitment support you receive, the fees may become a real drain on your income, leading to resentment or demotivation. 

It is wise to really understand the fee structure and the impact it will have on you at different stages of your business growth journey. 

Choose something that will work for you over the long term as you will be contractually tied into it.

Alternatives to care home franchising

Residential care home franchising is just one way to start a business in the care sector. 

One alternative is to start your own care home business independently, either from scratch or by buying an existing care home. 

Depending on the deal, your purchase may include many of the operational functions you would get with a franchise, plus assets like the premises and equipment, which could otherwise take a considerable time to arrange.

Another alternative would be to look at a home care model that delivers care into people’s homes rather than having them as residents in your premises. 

This will likely have considerably lower barriers to entry as you do not require an expensive premises suitable for hosting residents. 

Often, this model would be people’s first choice before it really becomes necessary to move. Home care franchise opportunities are available too.

If you would like bespoke advice on getting into the residential care home sector please book a call with us.

Ready to talk?

Dick Haffenden JCS

Then we’re ready to listen.

Tell us about yourself, your goals and what you need to achieve them and one of our team of friendly accountants will be in touch to begin the conversation.

020 8643 1166

jcs Accountants

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