The Hackensack-based home health care company Executive Care has embarked on a major franchise expansion beyond its base in northern New Jersey.
Executive Care opened its first four franchises in New Jersey last year and this month will add locations in Ohio and Connecticut.
Lenny Verkhoglaz, who co-founded the company ten years ago with his wife Mila Feldman and her brother Alex Feldman, said he is talking to entrepreneurs throughout the country — specifically in Maryland, Virginia, North Carolina, Florida, Louisiana and Utah — who want to become Executive Care franchisees.
The company said its franchisees have a startup cost of about $70,000, including the franchise fee, and pay Executive Care a 5 percent loyalty of gross revenue.
He now has nine franchise partners, and expects that will grow to 20 by the end of this year. Current annual revenue of $5 million, he said, could reach more than $10 million by the end of next year.
Currently the Executive Care network has about 350 care givers and the same number of patients.
“This business is basically one-to-one care: We want to make sure people stay healthy and stay at home,” he said.
The proposed expansions are driven in part by the strong demand for care by an aging population that wants to remain in their homes. Executive Care provides both skilled visiting nurses and nonmedical aides who assist frail patients with activities of daily living, like bathing and meals, and provide companionship.
The major challenge facing all home care companies is finding enough workers for a baby boom generation that is aging and striving to avoid moving to a nursing home, he said.
“Demand is pretty soon going to outstrip the supply of competent workers,” he said. To compete for those workers, Executive Care is constantly recruiting and encourages its aides to recommend friends and relatives. The company pays wages that range from minimum wage to $12 to $13 an hour. Executive Care charges clients $180 to $200 a day for live in care, and between $19 and $23 an hour for less than full time care, depending on the intensity of care required.
“We are growing every day. This is a business that can’t stop growing and as demand picks up we continue to hire new people,” Verkhoglaz said.
Executive Care is part of the “private pay” sector of home care, which can charge more than agencies that depend on the lower reimbursements from government agencies like Medicaid.
“We can charge a bit more and then we can pay our caregivers more — we have to make sure the caregivers are happy and that they are rewarded for the work they do,” Verkhoglaz said.
The company has three nurses on staff who train aides and develop care plans for clients.
“We recruit continuously, and we look for people that have compassion,” he said.
Asked how Executive Care manages the logistics of franchising in distant states, he said if the potential franchisee “Is well capitalized, has the right experience and is willing to work with us and follow our system, we will work with them.”
Franchisees come to Hackensack for a week of intensive training and then Executive Care visits them on site once they are up and running.
“For example we are working with a very strong franchisee in Utah. They have the financials and they have the attitude and they will follow our system, so we will work with them,” he said.
About a quarter of Verkhoglaz’s clients have long term care insurance that pays for Executive Care, and “The rest of the clients use their wealth — money they have saved up — for a rainy day, and now they are using it to take care of themselves.”
But there is a lot of competition in the home care industry, with big national franchises including Comfort Keepers and Home Care Assistance operating throughout New Jersey.
“Every home care franchise you can think of has a presence in the area where we are operating, which is not a bad thing,” he said. “I always am of the belief that if there is competition, there is business out there. I respect the competition because I learn from it — and there is plenty of business to go around for everyone.”
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