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FDD Talk 2017: What You Need to Know About the Right at Home Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

by Franchise Chatter on July 13, 2017

in FDD Talk 2017: Service Franchises, Franchise Earnings, Senior Home Care Franchises

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Right at Home Photo

In this FDD Talk 2017 post, you’ll learn the following:

  • Section I – Background information on the Right at Home franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Right at Home franchise, based on Item 7 of the company’s 2017 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Right at Home franchise, based on Items 5 and 6 of the company’s 2017 FDD
  • Section IV – Presentation and analysis of Right at Home’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
  • 2016 average, median, high, and low net billings and average percent increase over 2015 for Right at Home franchised offices in business for 73 to 192 months, 61 to 72 months, 49 to 60 months, 37 to 48 months, 25 to 36 months, 13 to 24 months, and all offices open 1 year or more ending 2016, respectively
  • 2016 average, median, high, and low net billings for all Right at Home franchisee entities, which may own one or more Right at Home franchised businesses
  • number and percent of Right at Home franchised businesses operating for the full 12 months in 2016 that reported net billings, with 2016 net billings of over $1,000,000, $750,001 to $1,000,000, $500,001 to $750,000, $250,001 to $500,000, and $0 to $250,000, respectively
  • 2010, 2011, 2012, 2013, 2014, 2015, and 2016 average gross margin percentage, office payroll percentage, and marketing percentage for all Right at Home franchised business that had been open for at least the entire year indicated

Section I – Background Information

13 Things You Need to Know About the Right at Home Franchise

Opening of 500th Territory

1.  In early 2016, Right at Home celebrated a company milestone with the opening of its 500th global territory. Prior to opening the 500th location, Right at Home experienced four years of sales growth resulting from 289 territories signed since 2012.

2.  According to the company, franchisee revenue growth has been strong as Right at Home’s franchisees continue to expand their businesses to keep up with the significant demand for in-home care.

3.  Right at Home reports that nearly 114 franchisees own more than one territory and that 2016 was the third year in a row that the brand surpassed its goal for franchise sales.

Best of Home Care and National Provider Endorsements from Home Care Pulse

4.  In early June, Right at Home announced that it had been named both an Endorsed National Provider and a Best of Home Care® Endorsed National Provider for 2017 by Home Care Pulse, the leading satisfaction research and quality assurance firm specializing in private duty home care.

5.  Home Care Pulse interviews a portion of in-home care clients and caregivers monthly, providing companies with detailed, unbiased feedback. The designation that Right at Home received recognizes leading home care companies that commit to providing the highest quality care to clients.

6.  In addition to the Endorsed National Provider accolades, four Right at Home locations received the Provider of Choice Award, 13 locations received the Employer of Choice Award, and 11 locations received both Provider of Choice and Employer of Choice Awards. Additionally, 12 Right at Home franchises were given both awards plus the Leader in Excellence Award.

Plans for More Growth in 2017

7.  Right at Home started 2017 with plans to build upon the previous year’s momentum and reach more clients than ever before. Eric Little, Right at Home’s Chief Development Officer, says that the company is committed to improving the care experience for families who need assistance in caring for aging loved ones through the brand’s partnership with Philips and Harvard Medical School. Little says that these partnerships will help make care more personalized and effective for decades to come.

8.  During 2016, Right at Home opened 45 new locations in the U.S., including several in new markets like Chattanooga, Tennessee; Miami, Florida; Waterloo, Illinois; Lima, Ohio; Anderson, Indiana; Terre Haute, Indiana; Bozeman, Montana; and Issaquah, Washington.

9.  The company has plans to open 30 new U.S. locations in 2017 with a focus on cities like Jacksonville, Florida; Cleveland, Ohio; Norfolk/Virginia Beach, Virginia; Buffalo, New York; and Spokane, Washington.

Company History

10.  Right at Home was founded in 1995 by Allen Hager in Omaha, Nebraska after Hager, who was a hospital administrator, realized that many senior patients could use help caring for themselves after they were sent home from the hospital.

11.  According to Hager, Right at Home’s first client was a retired farmer who wanted someone to drive him around in his 1958 Chevy truck. Hager was able to find a local caregiver who could also drive an old manual transmission vehicle and Hager officially launched the company.

12.  Right at Home began franchising in 2000 and today there are over 500 franchises in the U.S. and countries such as China, Canada, Ireland, Japan, Australia, and the Netherlands.

Entrepreneur’s Franchise 500

13.  Right at Home has ranked on Entrepreneur’s annual Franchise 500 list every year in the past decade, except in 2009. The company’s highest rank was No. 51 in 2017, while its lowest rank was No. 265 in 2008. Right at Home also ranked on Entrepreneur’s Top Low Cost Franchises lists in 2009 and 2010 at No. 39 and No. 43, respectively.

Section II – Estimated Costs

  • Please click here for detailed estimates of Right at Home franchise costs, based on Item 7 of the company’s 2017 FDD (updated).

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Please click here for detailed information on Right at Home’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis

  • For the purpose of this Item 19, “Net Billings” means the total of all revenues from the operation of the Franchised Business whether received in cash, services in kind, from barter and/or exchange, on credit (whether or not payment is received therefore), or otherwise.
  • Net Billings does not include the amount of all sales tax receipts or similar tax receipts which, by law, are chargeable to clients, if such taxes are separately stated when the client is charged and if such taxes are paid to the appropriate taxing authority.
  • In addition, Net Billings does not include the amount of any documented refunds, chargebacks, credits, and allowances given in good faith to clients by the franchisee, and the amount of mileage and out-of-pocket expenses incurred by and reimbursed to your employees in connection with providing services to clients.
  • Importantly, the success of your franchise will depend largely upon your personal abilities, your use of those abilities, and your market. The financial results of your franchise will likely differ, perhaps materially, from the results summarized in this Item.

Part 1 – Net Billings Information for Franchised Offices Open at Least One Year

  • Tables 1, 1A, and 2 presented below contain certain information related to Net Billings realized by Right at Home franchisees for the period beginning January 1, 2016 and ending December 31, 2016.
  • The opening date of a Franchised Business is the date the franchisee is able to take on his or her first client.
  • The information and figures regarding Net Billings presented in Table 1 below is based upon information reported to the franchisor by Right at Home franchisees for 418 Franchised Businesses.
  • Right at Home has not audited this information, nor has it independently verified this information. The information is for the period commencing January 1, 2016 through December 31, 2016. The information has been extracted from actual franchise reports made to Right at Home.
  • The Franchised Businesses classified below, together with the breakdown of information, represent only those franchisees that reported data to the franchisor as specifically noted following the Net Billings Information table.
  • The information may be used to evaluate the experience of existing Right at Home Franchised Businesses. The information is not a projection or forecast of what a new franchisee may experience.
  • Some franchisees have earned these amounts. Your individual results may differ. There is no assurance that you will sell as much.

73 to 192 Months in Business

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