Seeing his father, a Korean War veteran, die of emphysema in a poorly managed Veterans Affairs nursing home in Ohio motivated Joseph Gebhardt of Pleasant Grove to switch from building luxury homes to building assisted-living homes in Utah.

"We saw how run-down, old and smelly the Ohio facility was," he said. "It's not the kind of home you'd want your parents to stay in. But my dad had no choice because the insurance monies were running out. He had a lot of lung surgery because of his emphysema. That's when we decided we would do things differently, build a much better quality of nursing home."

The opportunity came when Bee Hive Homes, a Boise, Idaho-based franchisor of assisted-living homes, offered to let Gebhardt and his wife, Cathy, take over the franchise rights to a 10-bed nursing home at 60 E. 1200 North in Pleasant Grove and a 13-bed home at 272 W. 500 North in American Fork.

The two properties were on the verge of being foreclosed on by Celtic Bank of Salt Lake City, after the previous franchisee defaulted on mortgage payments to the bank.

"These two homes were actually the first two Bee Hive homes started in Utah. We took over the loans, remodelled the homes and Bee Hive sold us the franchise last month," Gebhardt said.

These two homes plus two others in Salem and Payson were taken back by Bee Hive in recent months after a former franchisee mismanaged the homes and caused some of them to be foreclosed on, said Dennis Toland, cofounder and partner of Bee Hive Homes. He owns the business with his brother-in-law and partner, Twayne Walker.

"We pulled the Bee Hive license from that former franchisee a year and a half ago because she was repeatedly getting into trouble with the state Health Department for violating health codes," he said. One other Bee Hive home at 565 E. 300 South in Pleasant Grove is also in foreclosure proceedings.

Toland, however, maintains that this is an exception to the rule, saying the majority of its homes are well-managed by its franchisees. Nationwide, the company has 124 nursing homes, including 42 in Utah. Of that, 12 are in Salem, Payson, Santaquin, Pleasant Grove, American Fork, Spanish Fork and Orem.

Even though Celtic Bank is foreclosing on eight Bee Hive homes nationwide including the two in Utah, Charlie Meyers, the bank's vice president, puts the blame on the franchisees managing those homes.

"I've helped finance over 40 Bee Hive home purchases and construction including 30 in Utah over the last seven years," he said. "Those that failed failed because the franchisee was interested only in the bottom line and didn't take good care of their patients. They also didn't follow the franchise plan, which ensures that the franchisee stays current with state health codes and other laws."

While the recession may have made it less affordable for some patients to live in assisted-living homes, Toland said demand continues to be strong, especially as the baby boomer generation gets older.

Bee Hive nursing homes, which have between 12 and 16 patients each, tend to be smaller than the average home because of their focus on providing more personalized care to the patients, he said. The homes are also located within residential neighborhoods so the patients will be closer to their families and churches.

"Having their families nearby is great for the patients' mental health," Toland said.

For $2,100-$2,500 a month, the assisted living home offers 24-hour care with an on-site nurse, meals that are tailored to the patient's specific dietary needs, and assistance with bathing, diaper changes and laundry.

The company plans to build 18 more homes in Utah, which currently accounts for a third of its overall business. Of the 18, several will be in Provo, Orem, Lehi, Springville, Spanish Fork and Payson. Construction in Provo will start next month, and in Lehi, this summer.

Most of these homes will be designed to help care for elderly patients who need supervised long-term care such as those suffering from diseases like Parkinson's, Alzheimer's and diabetes. "There's a lot of need for these homes because of the growing elderly population, and most of them tend to want to stay near their families," Toland said.

Gebhardt's Pleasant Grove home opened last week, and his American Fork home is scheduled to open in May. A grand opening of the Pleasant Grove home is scheduled next Wednesday at 12:30 p.m.