Business Overview

A combination of professional and knowledgeable support staff and compassionate, trained, and carefully vetted care providers deliver quality care to seniors and the disabled living in private homes, retirement communities, and independent and assisted living communities. The company provides part-time and full-time home care services including companionship, nutrition planning, meal preparation, light housekeeping, safety and security, and personal hygiene and mobility assistance. Alzheimer’s, dementia, diabetes, Parkinson’s care are among areas of specialization and opportunity.

Located about 1-hour northeast of Los Angeles. The company acquired this territory in 2016, but was serving clients here before that from an adjacent territory.

Potential ROI (Example Only):
ASSUMPTIONS OF POSSIBLE ACQUISITION STRUCTURE – 10% Down Payment, 90% 10-year SBA Loan @ 5.5%, and $63K Working Capital funded through LOC as part of the SBA Loan.

***Debt Services for SBA Loan and LOC = $121K/year***

SDE ROI (Cash on cash) CALCULATION
$310K (SDE) – $121K (Debt Services) = $188K (Take home after debt)
188%+ ROI

SDE ROI (Total equity) CALCULATION
$310K (SDE) – $52K (The interest portion of Debt Services) = $258K (Equity earned from cash flow after debt services and including the principal portion of the debt services)
258%+ ROI

Note: The SBA is providing Buyer incentives for transactions that close this year. This would make the ROI even higher.

Financial

  • Asking Price: $1,000,000
  • Cash Flow: $310,000
  • Gross Revenue: $2,000,000
  • EBITDA: $310,000
  • FF&E: $12,000
  • Inventory: $5,000
  • Inventory Included: N/A
  • Established: 2016

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:1,000
  • Lot Size:N/A
  • Total Number of Employees:60
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

Private offices, cubicles, and training 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 of best practices and advice on issues being faced. One week training program for new owners provided by the Franchisor.

Purpose For Selling:

Retirement

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 company was established in 2016, making the business 6 years old.
The transaction doesn't include inventory valued at $5,000*, which ins't included in the asking price.

The business has 60 employees and is situated in a building with disclosed square footage of 1,000 sq ft.
The building is leased by the business for $1,410 per Month

Why is the Current Owner Selling The Business?

There are all sorts of reasons why people choose to sell businesses. Nonetheless, the genuine factor and the one they tell you might be 2 completely different things. For instance, they might say "I have way too many various commitments" or "I am retiring". For numerous sellers, these reasons are valid. But also, for some, these may simply be excuses to try to conceal the reality of altering demographics, increased competition, current reduction in earnings, or an array of other factors. This is why it is very crucial that you not count absolutely on a seller's word, but rather, make use of the vendor's solution along with your total due diligence. This will repaint a more reasonable image of the business's existing situation.

Existing Debts and Future Obligations

If the current business is in debt, which numerous companies are, then you will certainly need to consider this when valuating/preparing your offer. Lots of operating businesses borrow money with the purpose of covering things like inventory, payroll, accounts payable, and so on. Bear in mind that in some cases this can mean that profit margins are too tight. Many companies come under a revolving door of taking on debt as a way to pay back other loans. In addition to debts, there may additionally be future obligations to think about. There might be an outstanding lease on tools or the structure where the business resides. The business may have existing agreements with vendors that need to be satisfied or might cause penalties if terminated early.

Understanding the Customer Base, Competition and Area Demographics

How do operating businesses in the area attract new consumers? Often times, operating businesses have repeat clients, which create the core of their daily profits. Particular factors such as brand-new competition sprouting up around the location, road construction, as well as staff turn over can affect repeat consumers as well as adversely affect future profits. One essential point to consider is the placement of the business. Is it in a very trafficked shopping mall, or is it concealed from the main road? Undoubtedly, the more individuals that see the business on a regular basis, the greater the opportunity to construct a returning client base. A final idea is the basic location demographics. Is the business situated in a largely populated city, or is it situated on the outside border of town? Exactly how might the regional average family earnings impact future earnings prospects?