Business Overview

This profitable, established company owns two franchise territories. Its mission is to enhance the lives of aging adults and their families by offering an individualized approach to keep seniors safe and sound at home, instead of anywhere else. This is accomplished through a combination of skilled and compassionate caregivers and professional support staff. The company provides part-time and full-time non-medical services including dementia care and personal care services for the elderly who require assistance, supervision, light housework, and companionship to remain in their homes.

Potential ROI (Example Only):
ASSUMPTIONS OF POSSIBLE ACQUISITION STRUCTURE – 10% Down Payment, 90% 10-year SBA Loan @ 5.5%, and $240K Working Capital funded through LOC as part of the SBA Loan.

***Debt Services for SBA Loan and LOC = $330K/year***

ROI (Cash on cash) CALCULATION
$880K (SDE) – $450K (Debt Services) = $430K (Take home after debt)
116%+ ROI

ROI (Total equity) CALCULATION
$430K + $257K (The principle portion of Debt Services) = $687K (Equity earned from cash flow after debt services and including the principal portion of the debt services)
186%+ ROI

Financial

  • Asking Price: $3,700,000
  • Cash Flow: $880,000
  • Gross Revenue: $6,000,000
  • EBITDA: $780,000
  • FF&E: $69,000
  • Inventory: $2,000
  • Inventory Included: Yes
  • Established: 1997

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:6,090
  • Lot Size:N/A
  • Total Number of Employees:210
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

Great office space with cubicles, private offices, meeting rooms, training rooms and community area.

Is Support & Training Included:

The seller will provide training and transition assistance on the local level regarding the staff, local market, and office management. Seller is available for onsite support for up to 2 weeks and is available for call / email support for up to 3 months. The Franchisor offers telephone support 24/7. There are also numerous ways in which franchisees support each other through sharing best practices and advice on issues being faced. One week training program for new owners provided by the Franchisor.

Purpose For Selling:

Owner is ready to retire

Pros and Cons:

The In-Home Senior Care Franchises industry is benefiting from a growing number of aging baby boomers. Over the five years to 2019, the number of adults older than 65 grew 3.6% to 55.0 million people. As people live longer due to advancements in medicine and technology, a growing number of seniors are looking to stay in their own homes and maintain independence for as long as possible. Franchise establishments that provide medical and non-medical in-home services enable seniors to do just that. The high cost of nursing homes and assisted living accommodations, coupled with the escalating healthcare costs associated with hospital stays, has also continued to drive growth in demand for industry services. The Patient Protection and Affordable Care Act (PPACA) of 2010 includes a list of changes to nursing services for seniors and the disabled, among them encouraging the transition from nursing home services to at-home managed care. As a result, industry revenue grew at an annualized rate of 8.0% to $10.9 billion over the five years to 2019, including an increase of 6.8% in 2019 alone. Average profit margins were 15.4% of revenue in 2019. The franchise model has gained traction to capture the business of assisting senior citizens who want to remain in their homes. There are now more than 60 brands selling home healthcare franchises, which entice franchisees with moderate initial investment requirements and strong business support in key areas such as marketing and advertising. Instead of having to build reputations from the ground up as non-franchise businesses do, franchise owners benefit from the clout and name recognition of strong national brands. The number of enterprises grew at an annualized rate of 10.8% to 9,726 companies over the five years to 2019. Although industry growth slowed slightly during the economic downturn, in-home senior care franchising has remained strong. This growth is expected to accelerate over the next five years, with demographic changes expected to continue unabated. Over the five years to 2024, the number of adults aged 65 and older is expected to grow to 63.4 million people, accelerating industry growth. Additionally, solidification of changes implemented under the PPACA will shift demand toward at-home care, and an improving economy will better enable seniors to pay for non-medical services. Over the next five years, revenue is forecast to grow at an annualized rate of 6.4% to $15.0 billion.

Opportunities and Growth:

The Franchisor expansion into home based medical care will increase revenue potential. Hospitals now have a financial incentive to reduce readmission and will encourage patients to receive care from agencies such as this company. The incredible Baby Boomer/age wave phenomenon coming makes it likely that Medicare will include Home Care payments as a benefit to prevent hospitalization, a new source of revenue. Expected expansion of the scope of care will include medication administration, glucose monitoring and oxygen management and greatly enhance the ability to care for more seniors. Continuing to build and establish relationships with local referral providers will ensure a continued solid client base. The location is experiencing growth in population and commerce which in turn enhances the growth of this market.

Established Franchise:

This Business Is An Established Franchise

Additional Info

The business was established in 1997, making the business 25 years old.
The transaction will include inventory valued at $2,000, which is included in the asking price.

The company has 210 employees and is located in a building with disclosed square footage of 6,090 sq ft.
The real estate is leased by the business for $4,366 per Month

Why is the Current Owner Selling The Business?

There are all types of reasons why people resolve to sell companies. Nevertheless, the real factor vs the one they tell you might be 2 absolutely different things. For instance, they might claim "I have way too many other obligations" or "I am retiring". For many sellers, these reasons are valid. However, for some, these might simply be excuses to attempt to hide the reality of changing demographics, increased competition, current reduction in revenues, or a range of various other reasons. This is why it is very essential that you not depend totally on a seller's word, yet instead, make use of the vendor's answer together with your general due diligence. This will repaint a much more reasonable image of the business's present scenario.

Existing Debts and Future Obligations

If the existing entity is in debt, which many businesses are, then you will certainly have reason to consider this when valuating/preparing your offer. Numerous businesses take out loans in order to cover things like supplies, payroll, accounts payable, etc. Remember that occasionally this can imply that revenue margins are too thin. Numerous businesses come under a revolving door of taking loans as a way to pay back various other loans. Along with debts, there may likewise be future obligations to think about. There might be an outstanding lease on tools or the building where the business resides. The business may have existing agreements with suppliers that need to be satisfied or may lead to penalties if canceled early.

Understanding the Customer Base, Competition and Area Demographics

How do companies in the location draw in new customers? Many times, companies have repeat customers, which form the core of their everyday profits. Certain aspects such as new competitors growing up around the area, roadway building, as well as staff turnover can impact repeat consumers and adversely affect future profits. One crucial point to think about is the placement of the business. Is it in an extremely trafficked shopping center, or is it hidden from the highway? Undoubtedly, the more individuals that see the business often, the higher the possibility to develop a returning client base. A final thought is the general location demographics. Is the business situated in a densely populated city, or is it located on the outside border of town? Exactly how might the neighborhood median house income impact future earnings potential?