If you’re passionate about senior care but not inclined to become a hands-on caregiver, then you should consider starting a senior services franchise. By becoming a franchisee, you can play an integral part in delivering vital, compassionate care to our nation’s most vulnerable seniors.
In this blog, we’ll help you determine whether opening a home care franchise is a good investment for you, specifically from a cost perspective. We’ll provide a brief overview of the costs involved, potential profitability, and tips for finding a home care franchise for sale that’s right for you.
What Are the Costs Associated with Home Care Franchises?
To get a clearer idea of the one-time fees and recurring expenses of franchising, consider this franchise cost list of the three main cost categories:
- Franchise Fees: The U.S. Small Business Administration (SBA) offers a concise point about franchise fees, stating simply that “They’re the cost of entry.” Paying the required franchise fees unlocks your ability to use any and all of the franchisor’s proprietary business systems and related assets. It’s “a license to own and operate the franchise business,” the SBA adds, noting that these fees often range between $20,000 to $50,000.
- Startup Costs: The startup costs for a home health care business can be fairly wide-ranging, and typically include expenses like:
- Recruiting and hiring qualified staff
- Acquiring proper facilities and equipment
- Initial advertising and marketing
- Paying for applicable insurance, licensing, and permits
- Covering any legal and professional fees that arise
- Recurring Fees: Franchisees are expected to pay the franchisor certain recurring fees. These include royalty fees as well as ongoing advertising and marketing expenses.
- Franchisees pay ongoing royalty fees, typically on a monthly basis, to the franchisor (parent company). Rather than being a fixed cost, royalty fees are based on a certain percentage of the franchise’s revenue, and may be as low as 4%—or as high as 12%—of the total revenue.
- In addition to the advertising and marketing fees paid at the onset of franchising, franchisees typically pay ongoing marketing fees as well. Similar to royalty fees, marketing fees are not a fixed cost from one month to the next, and are instead based on a percentage of the franchise revenue over a given period.
How Can I Learn the Costs for a Particular Franchise?
There are a few different steps you take to better understand and compare different franchises’ potential costs, starting with doing some basic online research. Franchise.com is an ideal place to begin your search for senior care franchises. There, you can…
- Browse and compare available franchises by industry or category, state, or investment level.
- Read more about individual home care franchises, including the total investment cost.
- Request additional information about one or more franchises with a simple click of the Get Free Info button.
As you narrow your search and zero in on specific franchise opportunities, the next step is to perform due diligence. This includes reviewing the Franchise Disclosure Document (FDD). The FDD is a vital and legally required document that’s made up of 23 sections in which the franchisor must disclose different types of information a franchisee would need in order to make a smart investment. (This Investopedia article provides a run-down of each of these sections and their purpose.)
Now that we’ve covered the various startup costs and recurring expenses associated with franchising, let’s pivot to the potential profitability of such a venture.
How Much Do Home Health Care Owners Make?
A 2021 Franchise Business Review study found that “the average income for senior care franchises is $155,132.” It’s important to note, however, that a franchisee’s income is typically a little lower ($118,792) during the first two years of operation, which is considered a startup period.
To give these figures some additional context, consider that the same study also identified senior care as the most profitable franchise industry, narrowly edging out the real estate category for that top spot.
What Is the Average Profit Margin for a Home Care Business?
When you consider all the factors in starting a home care business—not to mention the numberous variables that can impact its profitability—it becomes difficult to pin down an average profit margin. That being said, individual franchises will often have this information available online. For example:
- An article on ComForCare’s website claims that “the average ComForCare franchise generates more than $1 million in annual sales and a 33% gross margin.” (Learn more about investing in a ComForCare franchise.)
- Similarly, an article on A Place at Home’s website includes the statistic that “home health businesses experience an average gross profit margin of more than 35%.” (Learn more about investing in an A Place at Home franchise.)
Home Care Franchises You Can Start Today (with Approximate Costs)
Whether you’re ready to invest or just getting a lay of the land, Franchise.com is your one-stop-shop for all things franchising. There, you can browse home care and senior services franchises, narrow down your choices by factors like location and investment level, and learn more about the ins and outs of franchising. As you read more about individual franchises, you can view vital information like the upfront cost as well as the total investment over time.
Top Home Care and Senior Service Franchise Opportunities Available Today
In addition to ComForCare and A Place at Home, other top franchises include Home Instead, Senior Helpers, Visiting Angels, and Right at Home. Here’s a quick run-down of these franchises’ costs:
- ComForCare | Investing in a ComForCare franchise requires $50,000 cash and a total investment between $71,475 and $154,150.
- A Place at Home | You can franchise A Place at Home for a $50,000 cash investment, and a $50,000 total investment.
- Home Instead | A Home Instead senior care franchise requires a $50,000 investment, and a total investment ranging from $125,000 to $135,000.
- Senior Helpers | A Senior Helpers franchise can profit after a $50,000 cash investment and total investment between $214,883 and $408,183.
- Visiting Angels | To purchase a Visiting Angels franchise, you’ll need to come up with $64,950 cash and a total investment between $125,460 and $171,150.
- Right at Home | A Right at Home franchise requires $150,000 cash investment and a total Investment of $88,719 to $157,669.
There’s no time like the present to take the first step to your next endeavor. Browse our lineup of senior care franchises today! Still not sure whether franchising is the right move for you? Read our Franchising FAQs to learn more.
