FDD Talk Daily: Average Annual Gross Revenues of Homewatch Caregivers Franchisees, Based Upon Number of Full Years in Business

This special FDD Talk series will highlight the financial performance representations of 13 Senior Care franchises, with a cross-analysis of the featured franchises to be published at the end of the series.

Highlights of Homewatch Caregivers’ Item 19 Financial Performance Representations (2012 FDD) – Part 1

• Homewatch International, Inc. (HII) is offering franchises for the operation of a business which offers companionship, personal care, complex personal care, and nursing 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.

• The total investment necessary to begin operation of a Homewatch Caregivers franchised business ranges from $73,500 to $125,000. This includes $39,000 to $50,000 that must be paid to the franchisor.

Gross Revenues of Franchisees

• The section below presents the actual, average twelve-month Gross Revenues of all Homewatch Caregivers franchisees who were in business as of December 31, 2011 and had been reporting Gross Revenues for the full year in each of the representative years that are shown.

• Excluded from this data are:

• (1) any franchisee who purchased its Business from a former Homewatch Caregivers franchisee;
• (2) Gross Revenues for four of the company’s earliest franchisees for which HII does not have Gross Revenues information for the franchisees’ first 60 months of operation; and
• (3) Gross Revenues for the first 21 months of operation for one other early franchisee for which HII does not have information from these months of operation, but does have Gross Revenues information commencing with month 22.

• Some franchisees own two or more territories and the results from these territories are combined for the purpose of calculating the averages.

• Some of these territories have not yet been developed and some territories that have been developed contain a population of more than 30,000 seniors.

• Some franchisees’ reported results represent Gross Revenues derived from Businesses governed by more than one Franchise Agreement.

Average Yearly Gross Revenues of Homewatch Caregivers Franchisees in Business as of December 31, 2011, Based Upon Number of Full Years in Business

• For the purposes of determining the averages and ranges included in the section below, Gross Billings and Gross Sales were treated as the same thing and both are referred to as “Gross Revenues.”

• Gross Billings are the amounts billed in any period. Gross Sales (i.e. cash receipts) in a period are amounts collected from prior periods and current period Gross Billings. The franchisor estimates that less than two percent of all accounts receivables are never collected.

• A business is included in all applicable years based on the earliest territory to start operations.

• For example, if a franchisee started its business in its first territory on March 1, 2009, by December 31, 2011, the franchisee would have been in business for 34 months, and its average Gross Revenues for Years 1 and 2 would be included, but not its Gross Revenues for Year 3. If that franchisee had opened a second territory 13 months after the first territory, the Gross Revenues from both territories would be included in the average for Year 2.