Franchising

Have you developed the perfect model for your home medical equipment business? Franchising could be the way to grow your business utilizing the monetary and intellectual contributions of other people. This might just be the perfect solution for growth and profitability in a tight economy.

Before mandatory accreditation, every HME operated according to the owner's desires. Most have been “bootstrap” affairs that succeeded despite themselves. However, accreditation has forced HME businesses to standardize their business practices. This standardization, in turn, makes the business easier to duplicate and, thus, franchise.

This will be especially attractive to outside parties (potential franchisees) if they have a very profitable model.

We are continually receiving calls from people outside of our industry who want to start their own HME company. The first question they ask is where they can go to learn more about this niche business. Unfortunately, there is no university or trade school that teaches people about the HME industry. You have to learn by doing in our profession.

What better way is there to jump into HME than by implementing the best practices offered by a franchise system? And who better to ask about franchising than Scott Purdy, former CEO of Canadian HME franchise MEDIchair Ltd., headquartered in Calgary, Alberta? From 1987 to 2005, Purdy grew the franchise from a single unit to 59 stores with sales in excess of $60 million.

Why franchise now?

There is a saying in the franchise industry that “in franchising, the worst of times can be the best of times.” When the economy takes a turn for the worse, many highly capable, educated and ambitious people are squeezed out of their corporate executive positions.

Often these same people have had enough of the impersonal corporate world. They are looking to become their own bosses and control their destiny the next time around. Most of these same individuals have also received a golden parachute package. This lump sum is not usually sufficient for retirement but may easily fund a new franchise business.

(Which brings up costs, another question potential owners ask. While there will no doubt be a range of costs related to each specific situation, a franchise fee basically covers legal work for creating the system, usually around $20,000 to $40,000 per franchisee. The larger the franchise, the higher the fee due to the increased level of support needed. Monthly royalties cost approximately 5 percent, and some franchise systems also charge an advertising fee around 2 percent.)

Why franchise the HME business?

Many of these ex-corporate executives have a deep-seated need not only to make money but to “give back” now that they have been monetarily successful. They want to participate in an industry or to do something they perceive will improve society. In other words, money alone is no longer their only motivating factor.

We have watched many former corporate executives attain a level of personal satisfaction in the franchised HME industry that was totally unknown to them in their former corporate lives. They have achieved their longing to do something so at the end of the day they can say, “I made a positive difference in someone's life today and I feel good about it.”

The second most-quoted reason for choosing to buy an HME franchise is the perception that selling HME to an increasingly aging population is somewhat of a recession-proof industry. Most people understand that wealth preservation becomes a distant priority during times of illness. Caregiving is a top priority regardless of income or socio-economic level.