Could you be visiting a McDoctor’s in the near future? Apart from the ill-advised name, the idea itself isn’t far-fetched. Healthcare franchises are exploding in popularity, with 14 home-care franchises appearing on the Franchise Times list of best-performing franchises in the world, and plenty of financiers are betting this is no fading fad.
Franchises take a business concept and multiply it across many markets. Two factors are needed to succeed: strong consumer demand for the product or service, and a strong economic model that can be easily replicated.
Is the demand there?
The number of Americans age 65 and older is projected to more than double to 98 million by 2060, creating enormous demand for products and services geared toward the senior set, from fitness and massage services to in-home care and assisted living.
Add to this a dramatic shift in consumer behaviors and expectations, and you have a market rife with demand.
NRD Capital, a private equity firm specializing in franchised and multi-location business investments, recently completed fundraising efforts for a second fund that will invest in restaurant concepts as well as healthcare franchises.
“We’ve seen similar changes in restaurants,” says NRD Capital chief operating officer, Susan Beth. “Drive-through and delivery are increasingly important because consumers are time-crunched and technology has allowed them instant gratification on so many fronts. This is also going to drive change in healthcare, especially in the specialty medical practices. People aren’t going to be willing to wait three or four months to get in to a specialist.”
Will the model work?
Doctors and nurses receive an outstanding medical education, but they don’t usually get much of a business education.
A healthcare franchise allows medical staff to do what they do best, practice medicine, while following the systems and processes put in place by business experts that will help them be prosperous and maintain the consistency and integrity of the brand.
VIP contributor for Entrepreneur Magazine Rick Grossman also notes franchising gives doctors and clinicians a way to compete with the corporate giants of the medical and dental industries, uniting them under one banner with the benefits of buying power, marketing dollars and operations systems they wouldn’t have on their own.
What is the secret sauce?
The secret sauce for success in a restaurant or healthcare franchise, according to Beth, is doing the right things for the right reasons.
“Franchises that succeed have nailed the service aspect of their business, no matter what industry they’re in. They embrace service as a culture. It takes a really special team to understand the mutual respect needed in a franchisor and franchisee relationship, and that is where the life of the business takes root,” says Beth.
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