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Business Observer Thursday, Feb. 17, 2022 4 months ago

Entrepreneurs respond quickly to unmet need in senior care

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Pioneering a concept, even with investments well into the millions, requires a nifty and nimble approach, several enterprising business owners are learning.  
by: Mark Gordon Managing Editor

When Michael Finn was growing up in Rochester, New York, he would sometimes watch his mom, Barbara, volunteer at nursing homes, where she would sing songs from the old days for the residents. “They wouldn’t remember her name,” Finn says, “but they knew every word of those songs, from 50 years ago.”

Finn went on to Florida State and then a career in advertising in New York City. He worked for MTV, where he led digital advertising for VH1, among other roles. After that he spent nearly four years at Dish Network, where he built a $500 million ad sales unit and oversaw a 100-member national team. He later helped build an ad sales team for a startup channel, the El Rey Network.  

In late 2019, when Finn and his wife, Sherri Finn, considered escaping the Big Apple, they looked for entrepreneurial opportunities. A business broker suggested a restaurant, and even a hair salon, but neither, Finn says, “were the right fit.” Then, partially with the memory of his mom’s singing, the Finns heard about Town Square. The nascent national franchise creates Main Street-driven town centers from the 1950s to serve as adult day care centers for seniors with dementia, Alzheimer’s disease and other cognitive impairments connected with aging. It’s also known as reminiscence therapy.

Courtesy. Wendi Rickenbach-Barclay and Michael Finn plan to open 10-12 Town Square locations from Sarasota through Naples in the next seven years.

Finn was hooked.

“This isn’t a typical daycare center,” says Finn, sometimes telling visitors on a tour it’s like Disneyland for seniors. “It’s not just bingo. There’s real programing going on here.”

Finn, 56, is all in on the concept, too: In early February, he and a business partner, Sarasota entrepreneur Wendy Rickenbach-Barclay, 51, opened the first of what they project will be 10-12 Town Squares in the region, starting with one in south Sarasota. That location, in a 12,000-square-foot former Babies R Us in Oaks Plaza in Palmer Ranch, just off a high-traffic area of U.S. 41, was more than a year in the making. It’s also a $2.5 million investment.

The pair’s next two Town Square locations will be in Venice and Fort Myers, Rickenbach-Barclay says, with the others, on a seven-year plan, going as far south as Naples. Several other Town Square locations are in the works for the territory from Bradenton to Tampa, under a different franchisee.

Lori Sax. The Town Square Sarasota location aims to have at least 100 seniors a day.

Down on Main Street

The Town Square concept is step back in time, to the 1950s, where a dozen ‘Main Street’ storefronts line the center — fronted by a classic yellow 1957 Thunderbird. There’s a diner, theater, library, pub, city hall, health club and more, all designed to provide an immersive, nostalgic environment for seniors. Programs that provide that kind of therapy, according to several studies cited by Town Square and other groups, can improve mood and sleep quality. The therapy has even been shown to reduce agitation among those with Alzheimer’s and other forms of dementia.

It costs $135 a day for a senior at the Sarasota Town Square location, which is open Monday-Friday from 8:30 a.m. to 4:30 p.m. At that rate, Rickenbach-Barclay says the Sarasota branch needs about 100 members to reach profitability. She projects it will break even by the summer and be profitable by the end of the year.

Finn says the $135 a day rate, compared to other costs of senior care, is a bargain. That’s equivalent to about four hours of home nursing care, he says — and without the socialization perks. “We think there’s a gap in the marketplace for a place like this,” he says.

Friendly place

The idea of a senior day care center focused on reminiscence therapy started with the George C. Glenner Alzheimer’s Family Centers, a San Diego nonprofit. The concept? Since most memories are formed in adolescence, taking people back to that place in time later in life can provide a soothing and enriching experience.

The centers are then filled with things that evoke that time and era. The Sarasota Town Square Thunderbird (which cost about $17,000) is one of many 1950s-esque components of Town Square. Others include a jukebox — the first piece Finn acquired for Sarasota — portraits of Hollywood stars and mini-diners and mock gas stations. There are currently four Town Squares open nationwide, including the Sarasota one. Another 25 or so are in development, according to the company's website. 

The Town Square model got a jolt soon after it debuted in 2018 — with coverage on the Today Show, the Wall Street Journal and The Atlantic, among other media. 

Locally, reminiscence therapy has big believers beyond Finn, Rickenbach-Barclay and the other Town Square franchisees. One is Kris Chana, who has been in the senior living space for a decade, first with Chelsea Place Retirement and Assisted Living, a 12-bed facility in Port Charlotte. Chana and his wife Chelsea bought that facility in 2011 for $350,000 after state regulators shut it down under previous owners. They spent another $150,000 on renovations, gutting the old place.

Chana, seeing a shift in market needs, now believes “adult day care is the future of senior living.”

Lori Sax. An old-school diner is one of the rooms at Town Square.

And he’s also all in. The Chanas sold Chelsea Place in October and have been gearing up to launch a franchise adult day care concept under a brand dubbed ActivAge. Kris Chana says he recently closed on a building on Bee Ridge Road in Sarasota — a $2.8 million acquisition — that will serve as a company headquarters and franchise support center. 

For a few months Chana’s been operating an adult day care center in Punta Gorda, where he, much like Finn and Rickenbach-Barclay, says watching the seniors come alive has been a near-magical experience. “The way it transforms people's lives is unbelievable,” Chana says. “It gives them a sense of purpose. It gives them a sense of meaning.”

‘I’m addicted to the hugs and I’m addicted to the smiles.’ Wendy Rickenbach-Barclay, Town Square

Chana says his version of the Town Square concept is more 1960s, Jimmy Buffett-Margaritaville vibe than 1950s Elvis Presley — one big difference between the entities. The ActivAge footprint will be a bit smaller, too, 8,000 square feet over some 12,000 square feet on the Town Square side. An ActivAge franchisee will need an investment of $500,000-$750,000, says Chana, lower than some Town Square franchise opportunity investments.

All in

The senior living space for Rickenbach-Barclay, meanwhile, like Finn, is a second career. She worked in business development and recruiting for several Wall Street banks, including Citi Smith Barney, and was also a stockbroker. Soon after the 2008-09 recession, Rickenbach-Barclay sought a change of pace and career. She considered law school, and had a five-year plan for that, but the lure of being her own boss was strong. Franchising, she believed, was the right format. “Everyone I knew who started a business had failed,” she says. “But a franchise offered stability and a foundation that was really important to me.”

Rickenbach-Barclay got into senior living with an Arizona franchise, CarePatrol, which specializes in helping seniors and their families navigate the maze of living options, from aging-in-place to a nursing home. After she heard Sarasota was one of the country’s oldest demographics, and it had an open territory for CarePatrol, she quickly moved from where she was living at the time, in Virginia. “I knew nothing about working with seniors,” she says, adding she was a single mom of two children at the time, “and I had $100 to my name. I scraped together everything I had to move down here.”

Lori Sax. The approach at Town Square is known as reminiscence therapy.

That was in 2010. A decade later, Rickenbach-Barclay’s CarePatrol is one of the top-performing franchises in the chain. She also consults with other franchisees on best practices and improving profit margins.  

Rickenbach-Barclay discovered the Town Square concept through Peter Ross, an industry contact. Ross founded SH Franchising, parent of home care services company Senior Helpers, and he turned the Town Square reminiscence therapy concept from the San Diego nonprofit to a for-profit entity. A private equity firm, New York City-based Altaris Capital, now owns Town Square.

Rickenbach-Barclay and Finn connected with each other in 2020 – early in the pandemic. Finn was going to move from New York City to St. Louis, and open a Town Square there. And while both he and Rickenbach-Barclay believed in the concept, they agreed that partnering, to spread the risk at such an uncertain time for seniors and health care, was a prudent move.

Big goals

One core challenge, seen in different ways, all the entrepreneurs face in adult day care is awareness. That includes everyone from potential members and their relatives, investors, employees and state regulators, to even bankers, landlords and build-out crews designing or retrofitting the facility. “The biggest thing for senior adult day care in the next five to 10 years,” Chana says, “is making people aware of it and how it can help seniors.”

Specific to Town Square, Finn says space was an obstacle because it requires 18-foot ceilings and a big square in the middle, among other features. “When you put it all together,” he says, “you’re eliminating 99% of what’s available.”

Then, he adds, once you find the space, it’s a “fairly complicated construction project. There are a lot of pieces to this.”

Lori Sax. It cost more than $2 million to open the Sarasota location of Town Square.

Rickenbach-Barclay offers another obstacle: financing. She says she and Finn spent about 20% out of pocket on the $2.5 million for the first Town Square, between $420,000 and $430,000. “The biggest challenge is to get banks to finance it,” she says, “because no one’s ever done this before.”

She and Finn ultimately went out of the area for banking. They obtained an SBA loan through First Bank of the Lake in The Ozarks, quipping she banks at Marty Byrde’s bank — the fictional character in the Netflix hit TV show Ozark. “Getting banks to loan money for something new is really hard,” she says.

On the employee front, Finn says staffing, given the labor market challenges, has gone better than he thought. The Sarasota Town Square has about 15 employees and looks to hire another five or so. The goal is to maintain a ratio of five members per employee, he says, better than the state requirement to have one for every eight people.

Rickenbach-Barclay says all the challenges are worth it to get to the end goal: helping seniors and their families adjust to their situation. “I’m addicted to the hugs and I’m addicted to the smiles,” she says. “We want to do something positive in the community. We want to help people live their best life until their very last breath.”

 

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