If you are considering an Interim HealthCare franchise, don’t get blindsided by these 11 important franchise fees (from the initial franchise fee, to the royalty fee, to 9 other fees found in Items 5 and 6 of Interim HealthCare’s 2018 FDD).
1. Initial Franchise Fee: $50,000
- The initial franchise fee is $50,000. You must pay Interim HealthCare the entire initial franchise fee when you sign the Franchise Agreement.
- The initial franchisee fee, less the sum of $10,000, will be refunded to you if you fail to complete Interim HealthCare’s initial training program to its satisfaction, and as a result of such failure, Interim HealthCare elects to terminate the Franchise Agreement. Otherwise, no portion of the initial franchise fee is refundable after you sign the Franchise Agreement.
- All franchise fees are payable in lump sum.
- Interim HealthCare offers a one-time discount of $5,000 on the initial franchise fee to honorably-discharged veterans of the United States Armed Forces. The $5,000 discount is only available on the initial franchise fee for the first franchise purchased by a veteran.
- Interim HealthCare may discount the initial franchise fees for new franchisees that purchase multiple franchise markets simultaneously.
- In addition to the initial franchise fees, if Interim HealthCare agrees to expand the area after the Franchise Agreement has been signed, you may be required to pay a fee of $200 for each additional 1,000 people added to your area as a result of the expansion.
- Occasionally, Interim HealthCare may establish various franchise expansion programs, which are generally available only to existing franchise owners. These programs are intended to provide incentives for existing franchise owners to establish additional offices within their existing franchise territories, expand their existing franchise territories, acquire existing franchise operations from other franchise owners, or expand into additional franchise territories.
- Under these programs, which are established and maintained at Interim HealthCare’s sole discretion, initial franchise fees for additional franchise territories may be reduced, rebated, or waived entirely, provided that the new franchise meets certain sales or other performance criteria.
- Interim HealthCare does not currently offer any “standard” reduced franchise fee incentives for new franchise owners.
- Interim HealthCare may also reduce or waive the initial franchise fee when the owner of an existing business that provides services similar to those authorized under the Interim HealthCare Franchise Program agrees to convert that business to an Interim HealthCare franchise.
2. Insurance: $1,000 to $3,000 per franchise
- Before opening for business, you must purchase certain insurance coverage required by the Franchise Agreement.
- You may, but are not required to, purchase a portion of such insurance under master policies administered by Interim HealthCare. If you elect to purchase this insurance through Interim HealthCare’s master policies, Interim HealthCare estimates that pre-opening costs for these items will range from $1,000 to $3,000 per franchise.
- Interim HealthCare is under no obligation to make master policies available to its franchisees in the future.
3. Weekly Royalty: 3.5% of Medicaid sales; 4.5% of Medicare sales; 5.5% of all other sales; minimum weekly payment of $100
- Due Date: Friday of each week based on sales of previous week.
4. Sales Quota Deficiency: will vary
- Due Date: Within thirty days after Interim HealthCare provides you written notice
5. Medicare OASIS and Billing Fee (OASIS): $150 per month, plus $.80 to $1.10 per assessment
- Due Date: Invoiced monthly.
6. Medicare OASIS and Billing Fee (Billing): $175 per month, plus 2.27% to 3.40% of adjusted net Medicare revenue (maximum of $1,000 per week)
- Due Date: Invoiced monthly.
7. Indemnification: will vary under circumstances
- Due Date: Upon demand.
- You must reimburse Interim HealthCare for all losses and expenses resulting from certain of your acts or omissions.
8. Transfer Fee: one-third of then-current initial franchise fee
- Due Date: Upon transfer.
- Interim HealthCare has the right to condition any proposed sale or transfer upon your payment of a transfer fee equal to one-third of its standard initial franchise fee at the time of the transfer, as well as various other transfer conditions set forth in the Franchise Agreement.
9. Renewal Fee: $5,000
- Due Date: Upon renewal.
- You must pay a renewal fee equal to $5,000 and satisfy various other conditions set forth in the Franchise Agreement in order to exercise your option to renew your Franchise Agreement.
10. Non-Compliance Fee: 2% of all sales
- Due Date: On demand, following your failure to cure a default.
- If you are in default of your Franchise Agreement and you fail to timely cure the default, Interim HealthCare may, at its option, charge a Non-Compliance Fee in the amount of 2% of your total sales, payable to Interim HealthCare in the same manner as the Weekly Royalty.
- The Non-Compliance Fee will continue until the default is cured.
11. Annual Conference: then-current fee
- Due Date: At time of conference.
- Interim HealthCare may hold an annual conference and require you to attend the conference and to pay its then-current registration fee.
- All expenses, including transportation and lodging, meals, and salaries during the event, are your sole responsibility.