Considering a Synergy HomeCare Franchise? Don’t Overlook These 28 Important Franchise Fees

Updated July 13, 2020.

If you are considering a Synergy HomeCare franchise, don’t get blindsided by these 28 important franchise fees (from the initial franchise fee, to the royalty fee, to 26 other fees found in Items 5 and 6 of Synergy HomeCare’s 2020 FDD).

1.  Initial Franchise Fee:  $27,000 to $52,000

• You must pay an initial Franchise Fee when you sign the Franchise Agreement. The Franchise Fee is $52,000 for one Protected Territory, which will include approximately 20,000 persons who are 65 or over, as of the date of the Franchise Agreement.

• If the Protected Territory has less than 20,000 persons who are aged 65 or older, then the Franchise Fee shall be reduced by $2.50 per person, but not below a minimum territory size of 10,000 persons who are aged 65 or older.

• You may purchase an additional Protected Territory at a discounted price if (i) you do so in conjunction with the purchase of your initial Protected Territory, and (ii) if approved by Synergy (which approval may be granted or denied for any reason or no reason at all). The price of the additional Protected Territory shall be calculated as set forth in the above paragraph, but will also receive a 20% discount.

• If the Franchise Agreement is fully executed within the consideration period after attending Synergy’s Meet the Team Day, Synergy will reduce your Franchise Fee by $2,000 for each Protected Territory you purchase.

• Synergy also participates in the International Franchise Association’s VetFran program. You may qualify for the International Franchise Association’s VetFran program if you are a qualified veteran of the United States Armed Forces. If you qualify for the International Franchise Association’s VetFran program, the Franchise Fee is reduced by 10%.

2.  Royalty Fee:  5% of Gross Sales

• Due Date:  Weekly.

3.  Minimum Royalty Fee:  the difference between (a) 5% of Gross Sales from the prior month, and (b) the Royalty Fee that would have been payable had you obtained the Minimum Sales Quota

• Due Date:  Monthly, if applicable.

• Beginning in the seventh month after your Franchised Business opens, only if you do not obtain your Minimum Monthly Sales Quota for the prior month, you must pay Synergy the Minimum Royalty Fee.

• The Minimum Royalty Fee shall be paid monthly.

4.  Marketing Fund Contribution:  2% of Gross Sales

• Due Date:  Weekly.

• Synergy reserves the right to reduce or suspend the Marketing Fund Contributions. It may also require Marketing Fund Contributions to be used in Cooperative Advertising.

5.  Minimum Local Advertising Requirement:  the greater of $300 or at least 2% of Gross Sales per month

• Due Date:  Monthly.

• If the franchisee fails to spend the minimum every month, Synergy reserves the right to collect the required Minimum Local Advertising Requirement from you, to charge Synergy’s then-current Advertising Service Fee, and to cause the money collected to be spent on behalf of you in your Protected Territory.

• Synergy may require Local Advertising expenditures to be used in Cooperative Advertising.

6.  Advertising Service Fees and Costs:  Synergy’s then-current fee (which now is $250 per month), plus the cost to use an advertising firm in your Protected Territory

• Due Date:  Monthly.

• Payable to Synergy and collected only if you fail to spend the Minimum Local Advertising Requirement and Synergy is forced to collect it.

7.  Technology Fee:  Synergy’s then-current fee, which currently is $72.12 per week

• Due Date:  Weekly, beginning four months after the Effective Date of the Franchise Agreement.

8.  Software Fees:  currently $150 to $500 per month

• Due Date:  Monthly.

• You must pay Synergy or its designated supplier the then-current fees for access to the scheduling software.

9.  Computer Maintenance and Updates:  approximately $150 to $1,500 for maintenance and approximately $500 to $2,000 to replace computer

• Due Date:  As required.

10.  Software Support and On-line Data Storage and Backups:  approximately $200 to $1,000

• Due Date:  As required.

11.  Audit Expenses:  cost of audit

• Due Date:  Upon demand.

• Audit costs are payable to Synergy only if the audit shows an understatement in amounts due of at least 3%.

12.  Late Fees:  the highest rate allowed by law, plus collection costs

• Due Date:  Upon demand.

• Applies to all overdue Royalty Fees, Marketing Fund Contributions, and other amounts due to Synergy. Also applies to any understatement in amounts due revealed by an audit.

13.  Insurance Policies:  amount of unpaid premiums, plus Synergy’s expenses in obtaining coverage for you

• Due Date:  Upon demand.

• Payable only if you fail to maintain required insurance coverage and Synergy elects to obtain coverage for you.

14.  Transfer Fee:  for Protected Territories with at least 20,000 persons who are age 65 or older: $19,500; for Protected Territories with between 10,000 and 19,999 persons who are age 65 or older: $15,000; for Protected Territories with less than 10,000 persons who are age 65 or older: $10,000

• Due Date:  A deposit of 50% of the transfer fee due when you notify Synergy that you intend to sell your Franchised Business. The remaining 50% is due at the time of transfer.

• The transfer fee will not be charged if you transfer your interest in the Franchise Agreement to an entity controlled by you.

15.  Customer Service:  all costs incurred in assisting your customers

• Due Date:  Upon demand.

16.  System Modifications:  this amount will vary depending upon the type of modification made

• Due Date:  As required.

17.  Cost of Enforcement System:  all costs, including attorneys’ fees and expenses

• Due Date:  Upon demand.

• You must reimburse Synergy for all costs in relation to your default and termination and enforcing obligations under the Franchise Agreement.

18.  Indemnification:  all costs, including attorneys’ fees and expenses

• Due Date:  Upon demand.

• You must defend lawsuits at your cost and hold Synergy harmless against lawsuits arising from your operation of the Franchised Business. You must reimburse Synergy for all costs in relation to your default and termination and enforcing obligations under the Franchise Agreement.

19.  Franchisor’s Investigative Fee:  then-current fee (now $150 an hour), plus attorneys’ fees and costs

• Due Date:  Upon demand.

• Incurred if you service clients in another franchisee’s territory without permission and are given notice.

20.  Violation Fees:  the greater of (i) $2,500 for each client serviced in the territory of another franchisee without permission, or (ii) the net profit the other franchisee would have realized had it serviced the client

• Due Date:  Upon demand.

21.  Background Check Fees:  will vary; currently between $13 and $75 per caregiver

• Due Date:  Upon demand.

• May be from any approved vendor.

22.  Ongoing Training:  varies

• Due Date:  Time of program/meeting.

• Synergy does not charge for ongoing training programs, but you must attend mandatory training programs and pay your own expenses in training.

23.  Ongoing Training Non-Attendance Fee:  $1,500

• Due Date:  Upon demand.

• If you fail to attend mandatory training, you must pay Synergy a non-attendance fee in the amount of $1,500.

24.  Annual Franchise Meeting (AFM):  $350 for three people; $125 for each additional person

• Due Date:  Time of program/meeting.

• You must attend the AFM Synergy hosts and pay for the conference and your own expenses in attending.

• Synergy may increase this fee at any time with 60 days’ written notice to you.

25.  Annual Franchise Meeting (AFM) Non-Attendance Fee:  $1,500

• Due Date:  Upon demand.

• If you fail to attend the AFM, you must pay Synergy a non-attendance fee in the amount of $1,500.

26.  Manual Replacement Fee:  $5,000

• Due Date:  Upon demand.

• The confidential manuals remain at all times the sole property of Synergy and must be returned to it within 30 days upon the expiration or termination of the agreement. Failure to return any confidential manuals will result in a $5,000 charge, plus any costs associated with Cost of Enforcement.

27.  Additional E-Mail Fees:  $144

• Due Date:  Yearly.

• Synergy will provide you with three approved e-mail addresses in connection with the operation of the Franchised Business. If you would like more than three approved e-mail addresses, you must pay to Synergy $144 per year for each additional approved e-mail address.

28.  Compliance Guidance Fee:  $1,000

• Due Date:  Upon demand.

• You must purchase access to an online resource of compliance with state and federal laws regarding operating a home care agency.