If you are considering a Home Instead franchise, don’t get blindsided by these 20 important franchise fees (from the initial franchise fee, to the royalty fee, to 18 other fees found in Items 5 and 6 of Home Instead’s 2021 FDD).
1. Initial Franchise Fee: $59,000
- You must pay Home Instead an initial franchise fee of $59,000, which is fully earned when paid. The initial franchise fee is due when you sign the Franchise Agreement. Except as provided below, the initial franchise fee is not refundable under any circumstances.
2. Deposit: $29,500
- To reserve the availability of a market prior to signing the Franchise Agreement, Home Instead may allow you to enter into a Deposit Agreement with it. A Deposit Agreement may be entered into at least 14 calendar days after you receive a Franchise Disclosure Document.
- The Deposit Agreement will require you to make a deposit payment of $29,500 to reserve the availability of a market. If you then enter into a Franchise Agreement with Home Instead, it will apply the deposit payment toward the initial franchise fee.
- If you choose not to purchase a franchise, Home Instead will refund $26,550 of your original deposit payment. To receive this refund, you must notify Home Instead in writing that you are withdrawing your request to be considered as a franchisee within 90 days after the date of the Deposit Agreement.
- The entire deposit payment of $29,500 will be refunded to you if Home Instead decides, at its discretion, not to approve you as a franchisee.
3. Training Fees: no fee for up to two people; $1,000 per additional person for training and materials
- As a part of your initial franchise fee, Home Instead will provide initial franchise training and training materials for up to two people. Initial franchise training is currently offered as a 5-day training course at Home Instead’s headquarters located in Omaha, NE.
- You are responsible for travel expenses to and from the training site and for some limited meal costs for you and your employees.
- You may elect to have more than two people attend Home Instead’s franchise training program at your expense. If more than two people attend Home Instead’s franchise training program, the estimated costs are: $1,000 per additional person for training and materials and $500 per additional hotel room.
- Except for the circumstances described in this Item 5, Home Instead does not refund any initial fee.
- Home Instead uniformly imposes all fees described in this Item 5. All fees described in this Item 5 are collected by and payable to Home Instead.
4. Royalty Fee: 5% of Gross Sales
- Due Date: 15th and the last day of each month or such other dates as specified in the Operations Manual.
- Paid by automatic Electronic Funds Transfer (ETF).
5. Franchise Training Fee: $0
- Included in initial fees. No additional fee for first two attendees.
- Please note, you are responsible for your travel expenses to and from the training site and some limited meal costs.
6. Franchise Training Fee for Additional People: 1 person, no hotel: $1,000; 1 person, 1 hotel room: $1,500
🎯Find GOOD Franchises in Your Target Industries That Are STILL Available in Your Area (Free Tool)
💰How Much Franchise Can You Afford? Use Our Free Financial Calculator
- Due Date: Before training.
- You are responsible for your travel expenses to and from the training site and some limited meal costs.
7. Supplemental Training at Your Office: $500 a day plus expenses
- Due Date: As requested.
- Provided at your request.
8. Transfer Fee: $22,000
- Due Date: As requested.
- Payable by either the transferee or transferor at the time ownership of the franchise is transferred.
9. Additional Owner Fee: $5,000
- Due Date: As requested.
- Payable before starting the new owner vetting process.
10. Audit Fee: cost of audit, including travel expenses, compensation of employee(s), plus interest on amount of any underpayment
- Due Date: As requested.
- Payable if audit is made necessary by the failure to furnish reports, supporting records, financial statements, or other documents or information on a timely basis or as required, or shows an understatement of at least 2% of Gross Sales for any month.
11. Renewal Fee: $10,000
- Due Date: Automatically deducted via EFT on the Renewal date.
- Paid by automatic EFT.
12. Marketing Fund: 2% of monthly Gross Sales
- Due Date: Payable at same time and in same manner as Royalty Fee.
- Franchisee is required to contribute 2% of monthly Gross Sales to the Fund.
- Contributions to the Marketing Fund must be made by EFT.
13. Technology Fee: initially estimated to be a flat monthly fee of $500 (not currently charged)
- Due Date: To be determined.
- Home Instead may start collecting the Technology Fee upon 12 months’ written notice to the Home Instead franchisees.
- Home Instead may adjust the fee at any time upon 60 days’ written notice although Home Instead will not increase the Technology Fee by more than 25% per calendar year.
14. Shared Costs for Required Systems: varies, you will reimburse Home Instead for its actual costs
- Due Date: Varies.
- You must reimburse Home Instead for certain Shared Costs for Required Systems.
15. Shared Costs for Required Operating Software Systems: varies
- Due Date: Varies.
- Depending on which system you choose to use for your operations, you may reimburse Home Instead for your costs or you may pay the vendor directly.
16. Shared Costs for Optional Systems: varies, you will reimburse Home Instead for its actual costs
- Due Date: When incurred.
- You must only reimburse Home Instead these fees for related systems or products being utilized.
17. Interest Fee: prime commercial rate plus 3% as reported by the Wall Street Journal (Midwestern edition) (but no less than 12% per year)
- Due Date: When due.
- This fee is payable if you do not timely pay any amounts due Home Instead.
18. Insurance Costs and Attorneys’ Fees: cost of insurance
- Due Date: Immediately when Home Instead incurs costs.
- If you fail to obtain or maintain required insurance, then Home Instead may obtain insurance and seek reimbursement from you for the cost.
19. Costs and Attorneys’ Fees: will vary under circumstances
- Due Date: When incurred.
- Home Instead may recover costs and reasonable attorneys’ fees.
20. Indemnification: will vary under circumstances
- Due Date: When incurred.
- You must indemnify Home Instead for claims related to your operation of the Franchised Business.
Leave a Reply