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Evaluate the Franchisor’s Business Plan: Health Care Industry

July 25, 2011  |  Industry

The franchisor should have a business plan for the system that covers at least the length of the agreement you are being asked to commit to. Ask for the plan for the market where you are going to locate the operation. Ask for their analysis of the competition. Ask how many units are being planned for your area and why that many. Why not more, why not less? Ask how much is going to be spent on marketing in your area.

Ask to look at the operations manuals or at least to see an outline of them. This is important because the operations manuals are your guideline to a successful operation. You need to feel comfortable that they are complete and clear and meet your abilities, needs, and goals.

Ask to receive a full explanation of the initial and subsequent training programs. Ask how people are trained. Is it classroom or hands-on practice? Are there case studies and discussions or is it straight lecture?

Ask for a full explanation of the pre-opening assistance offered by the franchisor. Understand any help franchisors give for site selection and lease negotiation. Be clear about what ongoing support the franchisor provides to the franchisees.

Consider is the overall business in “growth mode?” Home care is becoming a more popular option among elderly persons who need help but are not yet ready for a nursing home. This trend is expected to increase as life expectancies grow and the U.S. population continues to age.  In addition to the elderly, however, home care may be utilized for younger adults who are disabled or recuperating from an accident or illness, and for children and infants who need medical treatment that can be delivered in the home. Persons of all ages who need care for a terminal illness are opting to spend as much time as possible in home care, rather than in a nursing home, hospital, hospice or other inpatient facility. Because of its convenience and relatively lower cost compared with institutional care, home health care is by far the most widely used option for individuals requiring long term care. In the U.S., more than 10 million individuals of all ages are estimated to need long-term care.

Today’s post was contributed by Bob Gappa. Bob is the President of Management 2000, a consulting company focusing on companies who want to grow using franchising.

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