Senior care player tackles turnover, Orangetheory owner takes on Detroit
Illustration by Jonathan Hankin
After 11 years, Marcus Gardner believes he has finally protected his business from direct competitors. What’s more, in the process of defensively adding more territories in the Dallas-Fort Worth metroplex—three within the last two years alone—he estimates revenue will swell to more than $5 million over the next two years.
“Superficially, everyone looks the same,” the Always Best Care Senior Services franchisee told me, referencing his rivals. “Our standout is customer service. If a client wants someone who isn’t loud, or whatever, for example, we change the person that day.”
Gardner first signed a franchise agreement with Always Best Care after a stint running a senior placement service that helped the elderly find appropriate places to live. Always Best Care provided clients a similar placement service as well as in-home caregivers.
“I was attracted to the placement side. But I realized the home care side would be our bread and butter. It’s a part of our business that’s there every month,” he explained.
Today, his six-territory franchise employs 300 workers who provide in-home care for varying lengths of time. Gardner emphasized that success depends on forming strong ties with clients. “We went on four cruises last year with clients. Caregivers go to operas and plays,” he added.
Turnover is high among home healthcare workers. “Lots of turnover, and our product is totally our people,” said Gardner, who’s in his mid-40s. He employs two full-time people who “do nothing but recruit” and schedule employees.
Surprisingly, his best employees are itinerants. He described them as “nomads” who may hear, for instance, that a relative is having a baby in California and decide to move there for three months. Routine isn’t their thing.
“They like wearing their scrubs and telling people what to do. These are the true caregivers,” he said.
The long-term outlook for in-home care is iffy, however. While a study this spring from the National Investment Center for Seniors Housing & Care concluded that the majority middle-income seniors will be unable to pay for senior housing by 2029, it also said the cost of less expensive in-home services (like Gardner’s) will also climb.
The study predicted the number of middle-income seniors in the United States will double by 2029, jumping to 14.4 million from 7.9 million in 2014.
Yet Gardner’s challenge appears more immediate: Marketing his services to medical professionals who can recommend his company to patients.
He claimed security issues, HIPPA and steady turnover among doctors, nurses and social workers have crimped his ability to sell services within the hospital itself. So he has begun to co-market continuing education events with non-competitive companies also seeking business in the medical segment.
“We are having to give back as a way to show the value of what we do,” he said, “but doing it in a way that adds value to the patient.”
Motor City muscle
“Literally, the top three things on the list are things we do,” Scott Marcus proudly declared after I read him the results of a worldwide survey of 2019 fitness trends from the American College of Sports Medicine. “We,” in this case, is Orangetheory Fitness, and the trends in question are wearable technology, group training and HIIT, or high-intensity interval training.
The 45-year-old multi-unit franchisee has been the fitness brand’s sole area developer in Michigan after initially signing on as a single-studio franchisee six years ago. He said meeting Orangetheory’s top brass during a training session in Fort Lauderdale convinced him to take on the bigger task of both operating and selling.
“In the franchise world, the corporate structure and who is running the show is even more important than the product itself,” Marcus said.
I should mention that Marcus is an attorney and real estate developer whose company portfolio includes roughly a million square feet of multi-family, office, medical office and industrial properties in metropolitan Detroit. Curiously, he is not the landlord for any of his studios.
“I don’t do a ton of retail in the first place,” he explained, “and also, I’d rather find an A-plus location that I don’t own than a B location that I do.”
To date, Marcus has opened seven of the 3,000-square-foot gyms in the Detroit suburbs. His eighth, slightly larger studio, opens later this year in Detroit’s New Center, a revitalized commercial and residential area north of downtown.
“It’s in a brand new mixed-use development with about 200 apartments above us,” he said.
The area developer has also sold a dozen licenses for studios among the state’s six sub-franchisees. “I have made a couple mistakes. But I have found some unbelievable, smart people, which was key,” Marcus said, as he added none of those sub-franchisees has closed a studio. “Finding the right operator made my job way easier. I figured that out early on.”
Today, his business employs 75 people, including studio managers, assistant managers, sales associates and a team that oversees sub-franchises.
Marcus got his own franchise going with help from partners; together they supplied the cash for the first studio before using cash for the next. “Then we were able to get an SBA and regular business loans. We have had limited debt as we’ve got to number seven,” he said.
Marcus, by the way, didn’t mince words when describing the SBA loan process: “It was a pain in the ass. The more you have in assets, the harder it is. In the future, I would avoid an SBA loan.”
David Farkas has covered the restaurant business for 25 years as a reporter and food writer, and writes about development deals in The Pipeline in each issue. Send your franchise’s development agreements to him at firstname.lastname@example.org.