Avendelle Assisted Living is preparing to nearly double its existing footprint in the coming year as new franchisees enter the world of senior living.
The Raleigh, North Carolina-based company didn’t plan to start out as a franchisor when founder Esther Cromwell purchased her first home in 2003. Over the course of the next 12 years and 11 locations later, Cromwell opted to switch the model.
“There were a lot of inquiries coming and people saying help us, we want to be a part of this business model,” Avendelle COO Bill Bunting said in the latest episode of the Senior Housing News Transform podcast. “We provide the proven systems, the training, the operational support, the technology, the years of experience … becoming an actual open residential assisted living home doesn’t happen overnight.”
Bunting said the small home setting provides an alternative for residents and families who aren’t willing to go into a “big box.”
The number of new franchisees wanting to join the company around North Carolina is increasing as well, with Bunting noting there could be as many as 50 more joining by the end of 2024. That expansion is looking to take the company across the Southeast, including into Florida, Georgia, Tennessee and further south into Texas, alongside getting into the Midwest with states like Illinois.
On becoming a franchise:
The 12 years leading up to the actual franchise model was based on working out the kinks [and] providing additional systems that make sense for a franchise model. You can only grow so fast.
So Esther was opening one or two homes a year for a number of years. But at some point, you look at the amount of people that are asking for her support. She’s on the boards in North Carolina … she was at the foundation of everything when it comes to residential assisted living in North Carolina. And so for her, there was a lot of interest for her to support people opening.
Initially, it was her just letting people kind of consult with her, not on a franchise level. And then it went to a franchise level where it made sense. She got into franchising and just like anyone, she operated more like a mom and pop initially in the franchise space.
She was almost at 15 years of experience operating and there were a lot of people within the state of North Carolina, but also outside the state, that were asking for her knowledge and support. And you have to franchise at some point, because you can’t just give away the business models.
The company just didn’t come about at a franchise level overnight.
On franchise fees and getting the most out of franchisees:
So, you get all the initial materials, the name, the ability to use the trademark, the brand name, and that’s just the entry in and then there’s a whole level of support needed to get them open.
We’re helping them with initially licensing [and] zoning permits, then we’re helping them through the construction phase, site selection. We have a project manager that works through that process with them [and] helps them through the initial process of finding the home, then getting the initial general contractors in place to renovate, leasehold [and] improve that home. And then licensing and permits to get the home to a point where we can get it open.
That is on the franchise side where they would be learning how to do that on their own. And actually doing that on their own. We have all of the systems, the manuals, the checklists, everything that’s technology-driven now walks them through that process, then we provide the training support to get them open.
If they need an administrator license, we coach them and educate and train them on that side of the business, because you will need to operate and have a license to operate the home. We train them on how to be a business owner. They spend weeks with us in North Carolina, and then we spend weeks with them in their business when they open and get ready to open.
We’re doing the social media, the website, the SEO setup. [For] every part of starting a business, we’re there for them. And that’s what they’re paying that initial fee for, the marketing support, the initial grand opening support, our methods to get residents as well as work with referral referral partners, our initial relationship marketing support. That’s all part of that franchise fee.
And then of course, there is an ongoing royalty, and that royalty is typical to any other franchise company. That pays for the ongoing support. Everything that I went through is a lot. It takes anywhere from three to six months, and they don’t have to worry about that. We give them the blueprint, we give them everything for them to be able to get that business open successfully, as well as walk them through that process. So that’s that initial franchise fee, [it] covers all that.
We have found a lot of real estate investors come in and say the Airbnb space has not dried up but slowed in certain spaces, and they’re looking for a sound investment to put their money where in 10, 20 or 30 years they know these residential assisted living homes are still going to be there. And we’ve seen a lot of medical professionals, like nurses and CNAs, doctors and physicians, people that just want to get out of that space but still be involved in caring for people, helping the community, and helping seniors. So it’s not one specific candidate … that comes to us.
There’s multiple outlets that we have franchisees coming to us [from], but I would say a majority of our franchisees come through our website organically [by] finding us and searching on Google.
On changing regulations in North Carolina to enable Avendelle’s model:
Before 2010, most residential assisted living seniors were able to age in our homes. The doctors, the nurses could still come in and provide services, our caregivers could still provide around the clock 24/7 care. But at a certain point … we were not in a position to have them age in place past a certain time. We couldn’t allow hospice to come into our homes at that point.
So for Esther, she was the first in Wake County. She was able to contact the state, the county, county monitor and get the planning and zoning board for Wake County. And everyone told her something different. No one knew who was going to inspect, how you were going to get a sprinkler system installed, how you were going to update fire safety features and what was required to have residents stay and age in place to the end of their life. Nothing’s uniform.
So after two years, finally, everything’s in place. We updated the home to be able to accept ambulatory and non-ambulatory residents through the end of life and we got it inspected. And we were the first in Wake County and truly the first in North Carolina to have a residential assisted living home that a senior did not have to leave.
She’s educated and actually helped transform how inspections work on a yearly basis in the entire North Carolina market as well.
On future growth:
Over the course of the last six months, we’ve had a lot of qualified and excited potential franchise partners come through North Carolina [and] go through our franchise process.
We’ve probably had over 100 prospective franchise partners actually fly or drive to Raleigh to meet with the team and go through our standard discovery day … and we see those franchise partners excited to grow multiple locations.
We see us obviously moving ahead with a lot of those franchisees that are going to be signed in over the next several months here that went through the process. And then we brought on … 60 team members. We brought on the social media company to support the franchisee that’s going to help them initially operate the marketing companies that are there to help them initially operate.
We brought in key executives from other senior living and assisted living companies both in the franchise space and non-franchise space, honestly. And we’ve fine-tuned the model on the technology side, where technology now drives a lot of the business.
I would say [it’s] comfortable for me to say, and realistic, that we could see 50 franchisees individually sign up by the end of 2024. And we could see unit economics over 50 within 2024 with the amount of interest and the amount of people that have already come through our door.
We see North Carolina still being a focus for Avendelle because we know the markets work and we know the market well. So it makes sense to expand in the markets we know. And we see a lot of southeast expansion [as well].
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