In this FDD Talk 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 2021 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 2021 FDD

• Section IV – Number of franchised and company-owned Right at Home outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD

• Section V – Presentation and analysis of Right at Home’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• 2020 average, median, high, and low net billings and average percent increase over 2019 for Right at Home franchised offices in business for 61 months or more, 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 2020, respectively

• 2020 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 2020 that reported net billings, with 2020 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, 2016, 2017, 2018, 2019, and 2020 average gross margin percentage, office payroll percentage, and marketing percentage for all Right at Home franchised businesses that had been open for at least the entire year indicated

• 2020 average and median number of caregivers placed with clients per week and caregiver hours worked per week for Right at Home franchised offices with a single license for the designated software operating for at least 12 months during the period beginning January 1, 2020 and ending December 31, 2020

Section I – Background Information

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

Joins Coalition to Bring More Care to the Home Setting

1.  In late May 2021, Right at Home announced that it has joined Moving Health Home, a coalition of innovative companies in their fields that is exploring ways to move more health care into the home setting. Right at Home joined the Washington, D.C.-based group that includes Amazon Care, hospital groups, and in-home care providers to collaborate on meeting consumer demand for care at home.

2.  Formed in March 2021, Moving Health Home members are working to change federal and state policies to enable the home to be a clinical site of care. The pandemic has put into sharper focus the urgent need for safe and reliable in-home care. Moving Health Home advocates for increased access to high-quality home-based services and pushes for permanent flexibility to transfer or treat patients in their home when it is found to be clinically appropriate.

3.  According to Krista Drobac, founder of Moving Health Home, “Moving Health Home members believe home-based care affords an opportunity to deliver significantly more clinical care in the setting most people prefer, and to approach care in a more holistic way. Right at Home will be helpful in advocacy efforts to integrate the home as a site of clinical care, utilizing and sharing their firsthand knowledge and lessons learned from providing care in the home.”

4.  Brian Petranick, president and CEO of Right at Home, said, “Recognizing we are in a consumer-driven industry, where aging adults want to be at home, we are encouraged to see coalitions like Moving Health Home focused on ensuring care can be delivered where the patient is most comfortable, leading to improved satisfaction and outcome.”

5.  Right at Home continues to build strong strategic partnerships that allow the provider to deliver collaborative, quality care. For over 25 years, Right at Home’s focus has been on the consumer, putting their needs first. “As health care costs continue to rise, and since more than one in seven Americans is an older adult, it is critical that all stakeholders work together to develop affordable models of care, while keeping consumer choice in mind,” Petranick said.

6.  Right at Home was one of the first providers to develop and implement a hospital-to-home model in 2007. The results of the program showcased how the inclusion of home care in the overall post-acute continuum can dramatically impact outcomes and readmission rates. From there, Right at Home has continued to innovate, working with their partners to develop collaborative care programs, virtual care models, and models for a skilled nursing facility at home.

Changes New Franchisee Training with Mix of Virtual and In-Person Training Programs

7.  In mid-November 2021, Right at Home announced that it has changed the way it trains new franchisees, which, in turn, will make a positive impact on the senior care franchise system and the success of each franchise owner.

8.  Emily Undajon, vice president of strategic operations for Right at Home, confirmed that the franchise has replaced its 100% in-person training model with a hybrid of both in-person and virtual training. Undajon explained that the new RightStart Learning Path eliminates the need for a new owner to come to Right at Home’s global headquarters in Omaha, Nebraska, and train in person for two consecutive weeks. Instead, this new model is a hybrid training plan that allows the new owner the ability to retain information longer by learning it in multiple ways.

9.  The new curriculum is made up of four different phases, with each phase consisting of 25 hours. The training is led by Right at Home’s director of organizational learning, with more detailed content covered by individual subject matter experts. As far as the role virtual learning plays in the rollout of the new training, Undajon stated, “The RightStart Learning Path begins with phase one’s self-study, which is completed via virtual learning through our Right at Home University; this phase is dedicated to really understanding the industry.” Included in phase one, Zoom sessions allow franchisees to network with peers who are in similar phases of the startup model.

10.  In phase two, new owners move into more virtual, instructor-led learning. The director of organizational learning leads trainees through discussions in phase two, assessing what they’re retaining before they move to phase three, which takes place in person in Omaha. “That’s when the subject matter experts teach them the keys to running the business successfully,” Undajon explained. “I call them our centers of excellence, which includes all facets of the business.”

11.  During phase three, the marketing team discusses with the new franchisees how they can gain brand awareness and preference as they’re establishing themselves in the market both online and offline. New franchisees also hear from the sales team on how to make sales calls, which includes role playing in the classroom, and they learn how to work closely with the technology team.

12.  Phase four gathers the new owners virtually again in the Zoom classroom, where they discuss what they learned before entering the market to launch their own businesses. In the last 30 minutes of the last Zoom meeting, the corporate team joins the new Right at Home owners to conduct a graduation celebration.

13.  While not included in the four phases of training but certainly part of the onboarding process, a new owner will also go into the marketplace to shadow an existing owner. The existing franchisee will walk the new owner through a checklist so they see the “big picture” of running the business over the course of a few days: They’ll manage payroll, watch an orientation, and possibly go on a couple of sales calls to observe.

14.  Besides the aforementioned transition to a hybrid model of training, the length of the program has changed from two to four weeks.

Company History

15.  Right at Home was founded in 1995 by Allen Hager in Nebraska. Before starting his own senior home care business, Hager had spent many years in healthcare as a hospital administrator. Hager said that he repeatedly witnessed patients returning to the hospital after being discharged. He believed that patients were not getting adequate care once they returned home. Hager wanted to change things and wanted to provide high quality home care for seniors and anyone who needed to recover at home following a hospital stay.

16.  After a few years of successfully running Right at Home and refining the business model, Hager began franchising the concept in 2000. Over the next decade, Right at Home continued to expand around the United States. In 2009, the company opened its first international locations in the United Kingdom and Brazil. Today, Right at Home has locations across the United States, Brazil, the UK, China, Canada, Ireland, Japan, Australia, and the Netherlands.

Entrepreneur’s Franchise 500

17.  Right at Home ranked No. 211 on Entrepreneur’s 2022 Franchise 500 list.

Section II – Estimated Costs

• Detailed estimates of Right at Home franchise costs, based on Item 7 of the company’s 2021 FDD.

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

• 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 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

• Outlets at the Start of the Year:  475
• Outlets at the End of the Year:  471
• Net Change:  -4

2019

• Outlets at the Start of the Year:  471
• Outlets at the End of the Year:  474
• Net Change:  +3

2020

• Outlets at the Start of the Year:  474
• Outlets at the End of the Year:  482
• Net Change:  +8

Company-Owned

2018

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2019

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  4
• Net Change:  +4

2020

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  5
• Net Change:  +1

Section V – Financial Performance Representations (Item 19, 2021 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 Franchised Business will depend largely upon your personal abilities, your use of those abilities, and your market. The financial results of your Franchised Business 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, 2020 and ending December 31, 2020.

• 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 354 Franchised Offices.

• Right at Home has not audited this information, nor has it independently verified this information. The information is for the period commencing January 1, 2020 through December 31, 2020. 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.

61 Months or More

• Total Offices:  291
• Average Net Billings:  $1,392,121.40
• Median Net Billings:  $1,108,303.27
• Number and % of Franchised Offices That Attained or Exceeded the Average Revenue Amount:  111/38.14%
• Number and % of Franchised Offices That Attained or Exceeded the Median Revenue Amount:  146/50.17%
• Highest Office Net Billings:  $11,404,741.96
• Lowest Office Net Billings:  $52,395.26
• Average Percent Increase Over 2019:  -0.1%

49 to 60 Months in Business

• Total Offices:  26
• Average Net Billings:  $798,960.19
• Median Net Billings:  $615,828.36
• Number and % of Franchised Offices That Attained or Exceeded the Average Revenue Amount:  9/35%
• Number and % of Franchised Offices That Attained or Exceeded the Median Revenue Amount:  13/50%
• Highest Office Net Billings:  $3,155,001.04
• Lowest Office Net Billings:  $201,012.54
• Average Percent Increase Over 2019:  6.7%

37 to 48 Months in Business

• Total Offices:  18
• Average Net Billings:  $639,341.26
• Median Net Billings:  $522,387.90
• Number and % of Franchised Offices That Attained or Exceeded the Average Revenue Amount:  6/33%
• Number and % of Franchised Offices That Attained or Exceeded the Median Revenue Amount:  8/44%
• Highest Office Net Billings:  $1,785,815.36
• Lowest Office Net Billings:  $109,747.75
• Average Percent Increase Over 2019:  4.4%

25 to 36 Months in Business

• Total Offices:  4
• Average Net Billings:  $661,399.12
• Median Net Billings:  $643,891.95
• Number and % of Franchised Offices That Attained or Exceeded the Average Revenue Amount:  2/50%
• Number and % of Franchised Offices That Attained or Exceeded the Median Revenue Amount:  2/50%
• Highest Office Net Billings:  $1,081,353.13
• Lowest Office Net Billings:  $276,459.47
• Average Percent Increase Over 2019:  21.1%

13 to 24 Months in Business

• Total Offices:  15
• Average Net Billings:  $809,974.30
• Median Net Billings:  $364,913.15
• Number and % of Franchised Offices That Attained or Exceeded the Average Revenue Amount:  5/33%
• Number and % of Franchised Offices That Attained or Exceeded the Median Revenue Amount:  8/53%
• Highest Office Net Billings:  $4,794,529.89
• Lowest Office Net Billings:  $28,611.38
• Average Percent Increase Over 2019:  Percent not included because the Franchised Businesses were open less than 12 months in 2020.

All Offices Open One Year or More Ending 2020

• Total Offices:  354
• Average Net Billings:  $1,277,354.93
• Median Net Billings:  $980,928.11
• Number and % of Franchised Offices That Attained or Exceeded the Average Revenue Amount:  127/36%
• Number and % of Franchised Offices That Attained or Exceeded the Median Revenue Amount:  177/50%
• Highest Office Net Billings:  $11,404,741.96
• Lowest Office Net Billings:  $28,611.38
• Average Percent Increase Over 2019:  2.7%

• Table 1 includes data reported by 354 Franchised Offices operated by franchisees that reported Net Billings during 2020.

• There were 25 franchises that transferred ownership in 2020. The date used to report the Net Billings for those franchises was the date of the original franchise.

Part 1A – Net Billings Information by Franchisee Entity for Franchised Businesses Open at Least One Year

• Table 1A is the data reported for each of the 469 Franchised Businesses operated by franchisees that reported Net Billings during 2020.

• A Franchisee Entity may own and operate more than one Franchised Business that is under common ownership with other Franchised Businesses.

• Net Billings data for those Franchised Businesses were reported based on the date the respective original Franchised Businesses opened.

• Number of Franchisee Entities:  273
• Total Number of Franchised Businesses Owned by Franchisee Entities:  469
• Average Net Billings Per Franchisee Entity:  $1,969,686.90
• Number and % of Franchisee Entities Meeting or Exceeding Average:  90/34%
• Median Net Revenue Per Franchisee Entity:  $1,534,177.44
• Number and % of Franchisee Entities Meeting or Exceeding Median:  137/50%
• Highest Franchisee Entity Net Revenue:  $11,433,093.64
• Lowest Franchisee Entity Net Revenue:  $71,501.71

Part 2 – Net Billings of Franchised Businesses

• Table 2 is the data reported for all of the 469 Franchised Businesses operating for the full 12 months from January 1, 2020 to December 31, 2020 that reported Net Billings.

2020 Net Billings:  Over $1,000,000

• Number of Franchised Businesses:  195
• Percent:  42%

2020 Net Billings:  $750,001 to $1,000,000

• Number of Franchised Businesses:  79
• Percent:  17%

2020 Net Billings:  $500,001 to $750,000

• Number of Franchised Businesses:  76
• Percent:  16%

2020 Net Billings:  $250,001 to $500,000

• Number of Franchised Businesses:  63
• Percent:  13%

2020 Net Billings:  $0 to $250,000

• Number of Franchised Businesses:  56
• Percent:  12%

2020 Net Billings:  Total Franchised Businesses

• Number of Franchised Businesses:  469
• Percent:  100%

Part 3 – Average Business Performance as a Percentage of Net Billings

• Table 3 sets forth the year-by-year average business performance of Right at Home franchisees based on those costs listed and then measured against their Net Billings.

• In Table 3, you will find financial data reported only from those Franchised Businesses that had been open for at least the entire year indicated.

• Gross Margin means Net Billings less the Cost of Goods Sold.

• Cost of Goods Sold includes all direct costs related to direct care staff, including wages, workers’ compensation insurance, crime-fidelity employee dishonesty coverage, and other professional and general liability insurance.

• Payroll taxes and payroll related insurance are included in the Cost of Goods Sold both for office staff and direct care staff because they were combined in the information reported to the franchisor by these franchisees.

• Office Payroll means all wages for office staff employees. Payroll taxes and payroll related insurance are included in Cost of Goods Sold.

• Marketing costs are those associated with marketing and promoting the business, including such items as local telephone directory advertising, web-based advertising, media advertising, and trade show fees.

2010

• Gross Margin %:  37.89%
• Office Payroll %:  14.75%
• Marketing %:  2.87%

2011

• Gross Margin %:  37.13%
• Office Payroll %:  10.36%
• Marketing %:  2.09%

2012

• Gross Margin %:  37.44%
• Office Payroll %:  10.27%
• Marketing %:  1.33%

2013

• Gross Margin %:  37.29%
• Office Payroll %:  10.56%
• Marketing %:  1.30%

2014

• Gross Margin %:  38.26%
• Office Payroll %:  10.76%
• Marketing %:  1.46%

2015

• Gross Margin %:  38.03%
• Office Payroll %:  11.08%
• Marketing %:  2.10%

2016

• Gross Margin %:  38.71%
• Office Payroll %:  10.93%
• Marketing %:  2.11%

2017

• Gross Margin %:  39.22%
• Office Payroll %:  10.67%
• Marketing %:  2.06%

2018

• Gross Margin %:  39.50%
• Office Payroll %:  10.50%
• Marketing %:  2.04%

2019

• Gross Margin %:  39.34%
• Office Payroll %:  10.42%
• Marketing %:  2.20%

2020

• Gross Margin %:  39.42%
• Office Payroll %:  12.27%
• Marketing %:  2.42%

Part 4 – Average and Median Number of Caregivers and Hours Worked

• Part 4 contains certain information related to the average and median number of caregivers placed with clients per week and the average and median number of hours worked by caregivers per week for Franchised Offices with a single license for the Designated Software operating for at least 12 months during the period beginning January 1, 2020 and ending December 31, 2020.

• The information and figures regarding number of caregivers per week and number of hours worked by caregivers per week presented in Part 4 are based upon information reported to the franchisor by all Right at Home franchisees whose Franchised Businesses had been open for at least 12 months during the period beginning January 1, 2020 and ending December 31, 2020. During such period, all Franchised Businesses offered the same or similar services.

• Right at Home has not audited this information, nor has it independently verified this information. The information has been extracted from actual franchise reports made to Right at Home.

All Offices Open One Year or More Ending 2020

• Number of Franchised Offices With Single Designated Software License:  290

• Average Number of Caregivers Placed With Clients Per Week:  58
• Number and % of Franchised Offices with Single Designated Software License That Attained or Exceeded Average:  101/35%
• Median Number of Caregivers Placed With Clients Per Week:  43

• Average Number of Caregiver Hours Worked Per Week:  25
• Number and % of Franchised Offices with Single Designated Software License That Attained or Exceeded Average:  156/54%
• Median Number of Caregiver Hours Worked Per Week:  25

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