Early this month Griswold Home Care, a 35-year-old chain of some 200 senior care locations, was recognized by the American Association of Franchisees and Dealers (AAFD) as having the best franchise contract, one that protects its franchise owners to a degree that stands out among all other American franchisors.
Griswold franchisees and their franchisor put considerable effort into that contract. The new franchise agreement, which the AAFD called “groundbreaking,” is the result of a collaboration between franchisor Griswold and its independent franchisee association, Griswold Home Care Franchise Association (GHCFA).
American franchisees of various brands honored Griswold with the AAFD’s 2017 Franchisor of the Year award. During the award ceremonies Griswold Home Care CEO Matt Murphy was puzzled by the lack of franchisors in the industry who are willing to recognize and work with the independent associations that their franchisees organize. “Common practice doesn’t always follow common sense,” he said.
What follows is part one of a two-part interview in which CEO Murphy shares his insights on franchisees, the history of Griswold, and managing the franchise relationship.
SNIEGOWSKI: Griswold is celebrating its 35th anniversary this year. Its founder Jean Griswold is an amazing person. Tell me her story.
MURPHY: Jean Griswold is indeed an amazing person. She passed away in February of this year, so we have been doing a lot this year to remember our history and our founder.
Jean and Lincoln Griswold were the founding family, if you will. Lincoln was a pastor at a church.
Jean spotted a need in her own congregation. As some church members aged, they needed help, more help than what their community and families could provide. Jean (Griswold) started to organize some services for older parishioners to provide the care that they needed. From that very altruistic beginning came the business model for Griswold. It didn’t take over the world, but it also didn’t take long for her to figure out that she had a business model that they could expand to help more people.
Jean had multiple sclerosis. To be that kind of groundbreaking entrepreneur with her own physical challenges to overcome was a remarkable story.
SNIEGOWSKI: As I understand her story, Jean Griswold was hard pressed to find employment because of her health record. Employers didn’t want to employ someone in a wheelchair with multiple sclerosis. She used her education in business administration to help solve the home care problems that surrounded her in her husband’s parish.
MURPHY: Exactly. A very inspirational story about her perseverance. She eventually turned her business over to her son Kent. We did not have a close relationship with Jean in the past few years just because of her condition. We had maintained a good relation with Kent. He was just in the office last week working on some things. He is very in tune with what is going on at Griswold.
SNIEGOWSKI: Is her son Kent Griswold on the company’s board of directors?
MURPHY: No. He’s not on the board and he doesn’t have an ownership position in the company anymore, so it really is just a collegial relationship that we have with him. We renamed our charitable foundation. It used to be called Griswold Foundation, but we renamed it the Jean Griswold Foundation in 2016. Kent was a big part of that. We included him in our communications around that.
There are certain acts of charity stemming from members of our franchise system spotting a need. For example, it could be the recent flooding in Louisiana. Our caregivers were impacted by it. Our foundation was able to raise money that went to those caregivers who needed help. We provide help in special conditions where we can support our caregivers or care recipients or any of the other social organizations that serve our same clients. So it could be Meals-on-Wheels—different grants like that that this foundation raises. They are mostly led by our franchisees.
SNIEGOWSKI: Griswold had been a family-run franchise system for years. Then it was acquired by private equity firms. What was that like?
|1982 — Jean Griswold forms Overnight Sitting Service, which later becomes Griswold|
|2009 — First wave of private equity invests in minority shares in Griswold|
|2012 — Private equity firms Pouschine Cook and Stonehenge acquire Griswold|
|2014 — CEO Matt Murphy joins Griswold from sister firm FHS|
|2015 — Griswold stops registering to sell franchises|
MURPHY: The first change in equity happened in 2009. That is when the family sold part of their interest to an investor group. That investor group, with the family, then sold again in 2012 when the current investor group came in.
Griswold was already a franchise business throughout the ’80s, ’90s and 2000s. But the more rapid franchising came after 2009.
The first franchisees that came in the ’80s would have experienced a family-run franchisor. Because of the small size of the franchise system back then, each franchisee would have probably experienced more of the franchisor’s attention when they wanted it.
At the same time there were benefits of the new investment firms coming in to modernize the business and the amount of technology that the business utilized. There was certainly change.
Like anything else there were some pros and cons. There certainly was a change of management processes. I am sure it was jarring to some franchisees who had been with Griswold for many years and had enjoyed a close relationship with the family.
I just know anecdotally through talking to our directors (franchisees) that they had been through a lot. They were accustomed to the family and then new ownership and new leadership happened in 2009, and then new ownership and new leadership happened again in 2012, and then new leadership with me in 2014.
I feel for them. It has been a lot for them to react to.
SNIEGOWSKI: Tell me about your background. I see that you came from Financial Health Services and that FHS has been affiliated with Griswold.
MURPHY: Financial Health Services SeniorCare Payment Solutions was also started by the family, so FHS was a separate legal entity, but we had a shared heritage. FHS was also the brainchild of Jean Griswold. It was a business that was set up to handle third-party billing in the home care context. It was part of the same investment when the current ownership group in 2012 came in. I started there in 2011, so I started before the new ownership group came in.
I started my career as a naval officer—Operation Desert Storm. But I was stationed on a ship that happened to not travel over there.
I got out and went to law school and practiced law as a health law lawyer.
I practiced health law for the University of Pennsylvania’s health system, but I really had a stronger inclination towards business than law. Having a background in a handful of service businesses, I had a chance to join FHS as their president and CEO in 2011.
It was a chance for me to get to know Griswold’s franchisees. FHS was the service provider to the franchisees. I was a known entity in 2014 when Griswold moved me from FHS over to here.
SNIEGOWSKI: Griswold’s franchise locations have dropped in the past few years. After 2014 the company stopped registering to sell franchises. Why did Griswold stop selling franchises?
MURPHY: When I joined Griswold in 2014 we were amidst a lot of changes on the regulatory side. These changes were impacting home care. I don’t know if you are tuned into the model challenges that we had. There used to be something called the companionship exemption under the FLSA [Fair Labor Standards Act]. Under that exemption, health care companies did not have to pay overtime or minimum wage to care agents.
That changed in 2014.
There was a lot of increased activity at the Department of Labor that was focused on our industry. That is what was at the heart of our challenges of what caused the retraction in our numbers.
With the confusion, it felt like it wasn’t the time to bring franchises into our system until we had our own house in order as it related to compliance with the new regulations from the Department of Labor. I did not feel it was appropriate to say come on in, everything is going to be fine, until we knew that we had it all sorted out.
SNIEGOWSKI: Is it sorted out now?
MURPHY: Yes. Griswold will be selling franchises again in a few weeks.
SNIEGOWSKI: What changed to make Griswold comfortable selling franchises again?
MURPHY: Quite frankly, we had to restore the trust between the home office and franchisees. We had to demonstrate our accountability to those folks. They deserved it. You cannot just demand it. We had to spend the time to make sure that our system knew that we were as focused on their success as we would be on the next ten (franchisees) that we could bring in.
We took the time off to focus on franchisees and strengthen the relationship between the home office and the [franchise] system.
SNIEGOWSKI: What did you do to strengthen the relationship?
MURPHY: We listened.
Collaboration with franchisees is the key. It is such a simple concept, but it is also a very elusive thing to bring about. We worked hard at it. We were constantly meeting and talking with our directors (franchisees). We spent time with them. We listen to them. What we tried to avoid was going away and then coming back later with all the solutions on a silver platter for them to follow. Franchisees were so ready to help us. People would come to the home office and work with us on issues. We had countless conference calls. Franchisees really gave us so much time, effort and energy. Again, it wasn’t that we went into the back room and cooked up a bunch of solutions for them. We were all in the kitchen together.
That is what made the collaboration so rewarding.