Love Thy Franchisees

Nurse Next Door treats its operators like cherished customers—a model that every franchisor should adopt. Here's how

Written by ProfitGuide Staff

Almost a year after opening a Nurse Next Door franchise in Kamloops, B.C., Gord and Tara Simpson are receiving fewer and fewer calls from their clients. Yet, what seems like an ominous trend has in fact bolstered the Simpsons’ confidence that they’ve bought into the right franchise system.

Although clients’ calls to book home health care and other support services for seniors are still streaming in, they’re being handled by NND’s sophisticated $1-million call centre at its head office in Vancouver. That spares the franchisees the burnout-inducing chore of having to field urgent calls around the clock and juggle the schedules of dozens of caregivers. “Without that, given the number of calls, we could never market ourselves, because we’d be stuck answering the phone,” says Gord Simpson. He and his wife have used that freed-up time to land more than 40 customers, who pay from less than $100 a week for occasional help to $5,000 a month for around-the-clock care.

The call centre is just one element in a remarkable array of support that NND gives its franchisees, from scheduling to coaching to personalized service for end-users. Its strategy treats franchisees not as mere distributors — or, worse, as a source of quick cash — but more like customers it aims to retain for decades. NND is highly selective about which franchisee applicants it takes on, but those who make the cut receive a level of service that would be the envy of operators in other franchise systems. For instance, rather than leave franchisees to struggle with the shortage of home-care workers, NND created a program, The Mommy Shift, through which it helps them hire stay-at-home moms to work from 9 a.m. to 2 p.m., when their kids are in school and client demand is high.

It’s too soon to prove this sort of imaginative support for franchisees will yield superior results to the “here’s your manual — good luck!” school of franchising. Still, initial results look promising. The first wave of franchisees that launched in early 2007 saw their sales double in the second half of the year over their first six months in business, says NND communications manager Arif Abdulla. They’ve also made a profit within their first year, and the company forecasts all of them will reach at least $500,000 in annualized sales by the end of their second year. The franchising program has helped the company top $10 million in system-wide sales for the year ending Sept. 30, 2007.

NND’s co-founders, investment banker John DeHart and tech startup specialist Ken Sim, decided from the beginning that they’d franchise, but only after they’d worked out the bugs at their corporate locations. They founded NND in 2001 after each discovered how frustrating it was to find good help, get a needs assessment and schedule home care for their infirm family members. Their idea was to build a North America-wide brand that would offer medical and non-medical assistance, such as cooking, cleaning and companionship. They concluded that franchising was the way to do that. “It’s such a local business, and it’s all about engaging the community,” says DeHart. “We realized that if we selected the right people, the franchise partners would do it better than we could.”

But before NND could start franchising, it spent almost six years fine-tuning its operations. The key elements of the franchising model it took to market are:

Set the partnership bar high: When NND was at last ready to franchise, 100 applications flooded in. DeHart says it could easily have signed 10 to 20 right away, but instead took several months to do eight deals: “There’s a difference between building a fast-growing business and building a world-class home health-care organization.”

Screen for passion: The company judges applicants not so much on their experience and health-care credentials as on their commitment to service. “We want purpose-driven people who are passionate about caring for seniors,” says DeHart. “This isn’t Subway, where you open up, somebody goes by, smells the bread and comes in. We have to go out into the community and sell.” As Kristan Ash, the firm’s vice-president of franchising and business development, puts it: “We award franchises; we don’t sell them.”

Standardize personal service: There’s a risk that clients who call a local number might be miffed to find themselves routed to the call centre in Vancouver. But the service they receive from operators trained to get to know each client’s preferences should put clientele at ease. If, say, a client has a sudden change in needs late on a Sunday night, the operator can pull up his profile and see that he prefers a caregiver who likes dogs and speaks Cantonese, then revise the schedule and phone a caregiver who’s right for that client.

Use continuous feedback to troubleshoot: To stay on track, NND asks its customers two critical questions every month: “On a scale of 0 to 10, would you enthusiastically recommend us to your friends?” and “What’s the biggest reason for the score you’ve given?” And NND acts quickly if the responses reveal a problem with, for example, caregiver punctuality.

Never stop communicating: All this centralization doesn’t mean head office cuts franchisees out of the loop. Quite the opposite. DeHart says NND’s research on franchising showed that without frequent communication, franchisors and franchisees will tend to think the worst about each other. That’s why each of NND’s franchisees has a regular “fess up and fix it” call, a one-on-one chat with a head-office person assigned as their coach. If one franchisee admits to a problem, says Abdulla, “we know others are likely having the same problem but just haven’t brought it up.” Gord Simpson says he and his wife, who hadn’t run a business before, find the coaching beneficial: “We do everything from work through new marketing techniques to assessing our margins.”

Keep it lean: An approach that DeHart describes as “making things more efficient and standardized from the customer’s perspective” comes into play right from the initial visit. The industry norm is to interview a new client in his or her home and take notes on paper for later entry into a computer back in the office — then book another visit once the care plan has been printed. NND saves steps by equipping each care manager with a tablet computer pre-loaded with a questionnaire using drop-down menus. When the interview is over, she uses a portable printer to print a care plan on the spot, then sends it to the client-service centre for immediate scheduling.

That’s all well and good, but what about the cost? While NND’s approach increases upfront expenditures, it quickly translates into savings for the franchisees, particularly by reducing how much work their care managers have to do with their clients. That, in turn, makes it easier for the franchisees to build volume in a business that Ash says has a high failure rate due to slim margins. “For franchises to be successful, they have to be profitable,” she says. “And to do that, they have to be able to get a lot of business off the bat.”

As for the Simpsons, their volume is trending upward nicely, and they expect to double their sales over the next 12 months. Their bullish outlook is grounded in the consistent support they get from NND’s head office. “They want to see you succeed,” says Gord Simpson. “They don’t want us to be a small home-care company. They want us to be the top home-care company in our community.”

NND will need hundreds of partnerships as solid as the one it has with the Simpsons if it is to meet its aggressive long-range target of 500 franchisees globally generating $1 billion in system-wide sales by 2021. But NND’s success so far suggests that it’s on track to meet its shorter-term goal of operating in 30 cities by 2011. In fact, says Abdulla, “we’re going to blow that out of the water.”

Originally appeared on PROFITguide.com