Home Instead Looks To Home-grown Master Franchisor For Quebec

Sunday, January 19, 2014

Home Instead Inc. has been growing its footprint in Canada since it established its first franchise office in Toronto in 2000. Thirty-three franchises later, it is finally tackling the Quebec market.

There's a reason for that, said Roger Baumgart, chief executive of Omaha, Neb.-based Home Instead Inc. While Canadian franchises to date report directly to the U.S. operations, a master franchisor arrangement turned out to be a better approach for Quebec.

"We decided to find a master franchise partner for several reasons," he said. "First, we needed someone who had local familiarity with customers, culture and language. Second, we saw it would be better to have a Montreal-based partner to create a model of success before building our franchise there."

Home Instead Senior Care, which won the grand prize in the Canadian Franchise Association (CFA) Awards of Excellence in Franchising, was founded in 1994. At 1,000 franchises and counting, it is now a leading international provider of non-medical, in-home care services for seniors.

The master franchise approach is not new for Home Instead: It used this model to expand into international markets in Europe, Asia and Australia. However, Mr. Baumgart said it took time to find the right partner for Quebec. "We try to be smart and do our due diligence because initial success is so important to long-term expansion."

Louis Sirois of Montreal-based Visavie, has a long history providing housing referrals for seniors, as well as franchising experience in the restaurant and real estate sectors. "I've been in the seniors' market for the past 25 years," he said.

It was no stretch for him do a presentation for Home Instead, that clinched the franchising relationship in June 2013.

The skills Home Instead was looking for went beyond specific industry knowledge, Mr. Baumgart said. "A master franchisor has to have a record of success, and really understand the purpose and mission of our business and have a passion for it. They may be intangibles, but it's so important to have a culture fit."

Mr. Sirois said he was equally impressed with the values, the quality of the people and the expertise at Home Instead. "The advantage we have is that we already have relationships with seniors, retirement home owners, hospitals and social workers."

It's not always easy for an English company to expand into Quebec, especially given that it is a market of just eight million people. "There are also language and cultural barriers, as well as legal differences between civil and common law. A master franchise approach is often an easier route," Mr. Sirois said.
Quebec's first Home Instead office is slated to open in Montreal this spring. Once the concept is proven, the plan is to gradually expand to different regions. "We're going to go at it slower to start, then will ramp up," Mr. Sirois said.

"Some people try to do this quickly, but that's not our approach."

While the business model is relatively simple (each franchise requires a basic office setup), the most important thing for Mr. Sirois is finding and training the care givers.

"They are the most important aspect of our business. If we do that properly, when we are ready to offer the service, we will be king of the hill."

St�phane Teasdale, partner and chair of Dentons International franchise and Distribution Law Group in Montreal said it's not uncommon to see franchises establish operations outside of Quebec first.

"There tends to be two issues that initially pre-occupy companies coming into Quebec. The first is a concern that legal documentation may need to be worked on extensively because of the differences between civil and common law."

A greater one is language barriers. "Franchise systems coming into Quebec perceive those issues to be so significant they will go to other provinces first," Mr. Teasdale said.

On the plus side, there is no franchise legislation in the province, unlike Alberta, Ontario, New Brunswick, Prince Edward Island and Manitoba � and potentially B.C. in future, he said. For example, in Ontario, franchisors must provide a disclosure document similar to a prospectus, he said. "Quebec does not have a regulatory body that demands that. Franchise disclosure documents in those other provinces are complicated and expensive documents to prepare."

As far as concerns over translation costs go, beyond marketing materials and operations manuals for employees, agreements between franchisors and franchisees are not required to be translated into French.

Any franchisor from a foreign country should consider a master franchise model in Quebec, Mr. Teasdale advised. "A partner will be much more judicially savvy around the business, culture and language and have a better stronghold on the way things work. They can handle a lot of things a foreigner might not understand as much. Once you find the partner that is suited to your system and prepared to work with you, [the concerns are] not such a big deal."

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