Year Business Began: 1976
Franchising Since: 1996
Headquarters: Columbia, Maryland
Estimated Number of Units: 220
Franchise Description: The franchisor is Homewatch CareGivers Franchising SPE LLC. The franchisor’s parent company is Authority Brands, LLC. The ultimate majority owner is a fund advised by Apax Partners, LLP, a private equity firm based in London, United Kingdom. The franchisor offers franchises for the operation of a business which provides companionship, personal care, complex personal care and nursing and other skilled services provided by home health aides, personal care providers, certified nurse assistants, licensed practical nurses and registered nurses for seniors and clients of all ages. Caregivers may provide care services to clients with disabilities, long-term health conditions and chronic illnesses. Care services also include post-hospitalization care, nursing coordination services, specialized dementia care and temporary staffing for nursing homes and other health care facilities.
Training Overview: Before the franchised business opens, the key person and any owners that the franchisor designate must attend and successfully complete an initial training program. The training program consists of two phases: phase one, which is conducted online (pre-training), and phase two, which is a proprietary franchise performance and development training program conducted in a classroom setting. Classroom hours include simulated “on-the-job” training. The franchisor may require that the training be conducted virtually or at an alternative location that it designates. In addition to the training program, franchisees must also participate in the franchisor’s Business Implementation Program, a 52-week program that starts several weeks prior to their participation in the training program and that provides them with week-to-week guidance (in the form of phone and email consultations, educational materials, sample forms and other resource materials) on the building of their franchised business, including sales and marketing planning. After the franchised business opens, the franchisor will make available, at the time(s) and location(s) it designates, such other required and optional training programs as the franchisor deems necessary and appropriate. For training that the franchisor designates as required, the individuals that the franchisor designates are required to successfully complete the training.
Territory Granted: The franchise is granted for the approved location only. Franchisees may not relocate a franchisee’s business premises without the franchisor’s prior written approval. Typically, the territory is based on total population of 32,500 seniors. The franchisor determines the number of seniors in the territory by reference to information provided by third-party data compilation and demographic service providers. Franchisees will have a protected territory during the term of their Franchise Agreement, provided they are in full compliance with the terms of the Franchise Agreement, including certain minimum performance requirements and their obligation to primarily service customers in their territory. “Protected” means that the franchisor will not operate a business under the marks and the system in the territory or authorize others to operate franchised businesses within the territory, except as described in the FDD. This does not prohibit the franchisor from advertising or soliciting employees or independent contractors in the territory. In the franchisor’s sole discretion, it may allow franchisees to add population to their existing territory during the term of their Franchise Agreement. If the franchisor does so, franchisees will be required to pay the then-current additional seniors fee, currently $1.75 per senior.
Obligations and Restrictions: Franchisees must designate an individual who will be responsible for the day-to-day operational performance of the franchised business and who has the authority to bind the franchisee in all decisions regarding the franchised business (the key person). The key person must own at least 5% of the equity in any limited liability company, corporation, or partnership, unless otherwise agreed upon in writing by the franchisor. The key person must complete the initial training program and, in the franchisor’s discretion, may be required to work on premises at the business office. The spouse of an owner is not required to sign a personal guarantee if the spouse has no ownership interest in the business entity. However, the spouse will be required to sign a spouse acknowledgement in the form attached to the personal guarantee. Franchisees are required to offer and sell all products and services that the franchisor designates as required items for Homewatch Caregivers businesses. Franchisees may also offer for sale any optional products and services that the franchisor has approved for sale in the franchised business. Franchisees are prohibited from offering any unapproved products or services without our prior written consent, and they must discontinue selling or offering for sale any products or services that the franchisor disapproves at any time.
Term of Agreement and Renewal: The length of the initial franchise term is 10 years. Franchisees can renew the franchise for one additional term of 10 years if they meet certain conditions.
Financial Assistance: In the franchisor’s discretion, it may permit franchisees to finance up to 75% of the franchise fee and any applicable additional seniors fee rather than paying the entire amount in a lump sum when they sign the Franchise Agreement. However, the franchisor does not offer financing for any transaction involving brokers or any other third party referral sources.
| Name of Fee | Low | High |
|---|---|---|
| Franchise Fee | $50,000 | $50,000 |
| Telephone System | $250 | $500 |
| Training Expenses | $2,000 | $5,000 |
| Office Equipment and Computer Hardware and Off-the-Shelf Software | $1,060 | $4,500 |
| Lease and Security Deposits | $3,000 | $8,000 |
| Office Furniture | $1,000 | $3,500 |
| Insurance | $8,000 | $18,000 |
| Compliance Toolkit Fee | $1,500 | $1,500 |
| Licenses, Permits and Professional Fees | $500 | $8,000 |
| Additional Funds for 3 months | $25,000 | $55,000 |
| ESTIMATED TOTAL | $92,310 | $177,750 |
| Type of Fee | Amount |
|---|---|
| Royalty Fee | 5% of gross revenue or the minimum royalty, whichever is greater. The minimum royalty is calculated based upon the number of months the franchised business has been open. |
| Brand Fund Contribution | Currently, the contribution is based on gross revenue during the calendar year, starting at 2% of gross revenue and decreasing as revenue increases. |
| Brand Fund Materials | The franchisor’s costs. |
| Local Marketing and/or Cooperative | The greater of $1,500 a month or 2% of monthly gross revenue averaged over the past 12 months. |
| Technology Fees | The current technology fees are:Email Service and Technical Assistance Fee: $175 per month. Homewatch CareGivers Care+ Monthly Software Fees: The then-current fee; monthly fees are established according to the number of service hours of care delivered, currently beginning at a minimum of $360 per month. Homewatch CareGivers University Fees: $2.75 per month per employee enrolled in any of the franchisor’s online education courses. |
| Additional Opening Support Fee | A reasonable fee, plus the reasonable travel, meal, and lodging expenses of the franchisor’s opening support personnel. |
| Training Fee – Pre-Opening | None, unless franchisees request and the franchisor agrees to accept extra trainees. $1,000 per day per extra trainee plus the franchisor’s trainers’ reasonable costs and expenses, when applicable. |
| Training Fees – Remedial and Optional Training | $1,000 per trainee. |
| Annual Conference | Currently, two complimentary registrations and a cost set by the franchisor thereafter. Applies only if the franchisor schedules an annual conference for franchisees. |
| Conference Non-Attendance Fee | $2,000 |
| Call Center Fee | None currently. |
| Service Deficiency Fee | The franchisor’s costs. |
| Renewal Fee | $5,000 |
| Transfer Fee | Generally, $10,000. However, if the proposed transferee was referred by a third-party (e.g., a broker) with whom the franchisor has a referral arrangement, then franchisees must pay the franchisor an additional fee equal to the amount owed under that referral arrangement. If the franchisor identifies the prospective purchaser, then in addition to the $10,000 fee, franchisees must pay the greater of: (a) $15,000; (b) 3% of the total purchase price; or (c) the franchisor’s actual costs to identify the prospective purchaser. |
| Change of Ownership Fee | Currently, (a) the greater of $500 or the franchisor’s external legal and administrative costs; plus (b) applicable training fees for the individuals it requires to attend training. |
| Procurement of Insurance | Cost of insurance plus reasonable fee. |
| Vendor Review | The franchisor’s reasonable costs. |
| Management Fee | Commercially reasonable fee. |
| Step-In Fee | Up to $500 per day, plus the franchisor’s costs and overhead. |
| Interest | 12% per annum or the maximum rate permitted by applicable law, whichever is less. |
| Late Fee | $100 for second occurrence of payment more than 30 days past due; $200 for third occurrence; $300 for each subsequent occurrence. |
| Insufficient Funds Fee | $50 or the amount the bank charges the franchisor due to the insufficient funds, whichever is greater. |
| Indemnity for Tax Withholding | Amount of any penalties, interest, and expenses the franchisor incurs. |
| Audit Costs | The franchisor’s costs and expenses of conducting an audit, including travel and lodging. |
| Non-Compliance Fee | 1% of gross revenue. |
| Enforcement Costs | Will vary under circumstances. |
| Defense Costs | The franchisor’s actual costs and expenses. |
| Indemnification | Will vary under circumstances. |
| Liquidated Damages | The greater of: (i) two years of royalty fees (calculated as the average royalty fees per payment period in the year preceding the termination of the Franchise Agreement, multiplied by the number of payment periods occurring in a two-year period); or (ii) $100,000. |
| De-Identification Fee | The franchisor’s costs. |
The above information has been compiled from the FDD of Homewatch CareGivers. Year of FDD: 2022.
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