Franchising the Love: Care Northwest to Top $1 Million

Care Northwest Expects to Top $1 Million

As the oldest baby-boomers edge toward retirement, more grown children must decide how to care for their aging parents. In 1996, Care Northwest Ltd. began developing a system of in-home services for seniors and their families. Offering non-medical support, ventures such as Care Northwest allow many elders to continue living independently.

Now, owners Leigh and Candra Davis want to market their system of living assistance that includes cooking, light cleaning, errands, bathing and simple visiting. The couple expect to franchise within a month, and the pending paperwork will license the business in 38 states.

Tentatively named Intelicare Senior Services Inc., the franchising subsidiary of Care Northwest will distribute the Davises’ business system to proprietors for an initial fee of $12,500 plus 5 percent of the location’s gross sales. After several offices open, the Davises’ plan to increase the franchising fee to $16,000-$17,000.

Intelicare Senior Services will target areas with more than 150,000 people, Leigh Davis said. Little Rock and Fort Smith are probable early expansion areas.

Arkansas offers a sturdy base for senior-service businesses. In 1995, the U.S. Bureau of the Census recorded Arkansas as having the 6th highest proportion of people 65-years-old and older, and the state is projected to be the 5th highest proportion of elderly in 2025. The same analysis showed the state’s proportion of elders increasing from 14.5 percent in 1995 to 23.9 percent in 2025.

Leigh Davis said Care Northwest will “grant, not give” franchises.

“We’re making sure they’re going to succeed,” he said. “They’re following a proven system.”

Humble Beginnings

About 65 care assistants and five office personnel staff Care Northwest, which serves about 100 clients in Washington County. Housed in a 1,200-SF office on the downtown square in Fayetteville, the business grossed about $500,000 during 2000, Leigh Davis said, and he projected the company will top $1 million this year.

Although the gross revenue has “nearly tripled” every year since its genesis in 1996, Leigh Davis said, the first years of the business offered some sharp lessons.

“If it hadn’t been for the grace of God and our parents,” Leigh Davis said, “we never would’ve made it.”

Neither Leigh nor Candra are formally trained for business — Leigh studied psychology and art at the University of Arkansas — and they initially opened Care Northwest as an simple errand service for seniors. Searching for direction during its first stint of operation, Care Northwest also offered contracted nannies and housekeepers.

“We’ve had to surround ourselves with good, smart people to help manage the business,” Leigh Davis said.

The University of Arkansas Small Business Development Center offered advice when Care Northwest started. The center helped the Davises calculate a reasonable pricing system.

When Care Northwest charged a $7 hourly rate, “[Advisors at the Small Business Center] said ‘look … you’re going to go broke if you keep doing this,'” Leigh Davis said. “We were walking backwards.” Now, Care Northwest charges a flat rate of $13 per hour, and clients can employ the service for any time frame from a one-time, three-hour visit to constant, 24-hour care.

The venture’s beginning also taught the Davises the dynamics of employee/ employer relationships.

“Treating [an employee relationship] as a personal friendship rather than a business relationship was a big mistake,” Leigh Davis said. “We really got burned.” Two employees with Care Northwest contracted to work for a client, quit the company and kept working for the client privately.

As a result, the couple added a no-compete clause to the company’s contracts, and each care assistant is hired as an independent contractor.

Fine Tuning

Although the nanny and housekeeping services of the fledgling Care Northwest flourished, the Davises narrowed the business’ focus when they realized the need for senior assistance. Leigh’s paternal grandmother — who is featured on Care Northwest’s brochures — and both of Candra’s grandmothers all faced long-term illnesses near the end of their lives. The couple discovered the value of assisted living when they each relied on 12- and 24-hour shifts of assisted care to manage the ailing family members.

“We see it from the grassroots level,” Leigh Davis said. “We’re no Einsteins here. We’re just filling a need.”

That personal experience also helps the Davises make decisions for hiring. Every care assistant must have at least one year of experience, but the prospective employee’s personality makes the difference.

“We ask ourselves, ‘Would we want that person to take care of our families?'” Candra Davis said. The husband-and-wife team also intend to screen franchise applicants in a similar manner.

“There needs to be a deep-rooted compassionate instinct,” Leigh Davis said.

As the business matures, Care Northwest continues to add to its list of services. Aside from in-home care, the Davises implemented a geriatric care management system, which allows Care Northwest to act as an administrator for their clients needs.

Through geriatric care management, Leigh and Candra Davis work with the families to determine the client’s needs. Care Northwest acts as a connection between concerned long-distance families and the client. Many of Care Northwest’s private-pay customers live off a trust fund, and the Davises also communicate between the trust officers and the trust holder.

Intelicare Senior Services franchises will also offer licensed counseling social workers to their customers, Leigh Davis said.