When you’re thinking about acquiring a senior care franchise, it’s important to only move forward if you are excited by the idea of helping seniors and families in your local community and arranging the dedicated care they need. If you’re sure this is your main motivation for opening this type of business, the next step is to take a look at more detailed data that can help you make the best decision about which senior care franchise to choose.
Pay Attention to These Figures When Considering a Senior Care Franchise Opportunity
As you begin comparing franchises and determining which franchisor to work with, numbers will become increasingly important. To help you prioritize, we’ve listed five of some of the most crucial numbers to consider when evaluating a senior care franchise opportunity.
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The initial investment amount.
This will be one of the most significant numbers for determining whether a franchise is within your budget or should be cut from your short list. You can find this metric in item #7 of the Franchise Disclosure Document (FDD).
The range you see should include everything from capital requirements to the initial franchise fee and other upfront costs. One specific figure to keep in mind as you review this range is the amount listed Under “additional capital,” which represents how much you may need to come up with to get the business into full swing.
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Revenue potential of the senior care franchise.
Next, you should take a look at the potential earnings of the senior care franchise and the average amount of money this type of business brings in through sales. The majority of franchises disclose this kind of financial information in their Item 19 of the FDD, but it is necessary to take a look at the data these projections are based off of if they are provided.
Some franchisors will list revenue numbers, and others will offer gross margins. If this data is not disclosed in the FDD, it will be necessary to consult a number of current franchisees directly to better understand the financial potential of the business. Senior Helpers provides a strong Item 19, reflecting the average revenue of a single unit franchise owner being $1.3 million in 2022.
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Franchise failure rate.
This number will tell you how many franchises are closing down or choosing not to extend their contracts after the initial term. This figure can, in general terms, be seen to indicate the overall health of the franchise brand. A high franchise failure rate should be considered a red flag. Such turnover could indicate franchisee dissatisfaction with their relationship with the franchisor, repeated inability to produce a sizable profit margin, or other issues that you’ll want to avoid. Senior Helpers is happy to report that we have a 98% success rate.
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Number of franchisor ownership changes.
In addition to understanding the turnover of individual franchise locations, you’ll also want to know the details of how often the franchise brand itself has changed hands. It’s usually easy to find this information by looking at the first item of the FDD, which offers details about the current franchisor and the brand’s history. Taking a look at this historical information, you’ll be able to note whether frequent ownership changes have been a problem and also gain insight into the overall dynamics of the business as a whole.
If you’re currently evaluating senior care franchise opportunities, be sure to consider working with Senior Helpers. You can contact us today for essential details about our franchise opportunities or book a one-on-one call with one of our team members.