Senior Helpers Franchise Cost Justified By Strong Profits (2022)

Written by: Parth Parth
Last Updated by Rocío Somoza: July 20, 2022
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This article is based on the video featured above, originally recorded for Vetted Biz Youtube Channel.

This article is based on its 2022 FDD

Senior Helpers provides in-home senior assistance services. In addition, they also assist seniors with Alzheimer’s, Dementia, and Parkinson’s care. It was started in 2002 by Tony Bonacuse with the help of Peter Ross. At the end of 2021, it had 319 franchised and 5 company-owned locations.

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How is Senior Helpers Franchise Positioned in the Senior Care Industry?

senior helpers

The United States home care market is expected to grow from $100 billion in 2016 to $225 billion by 2024.  An intensifying shortage of US home health aides and physicians, a booming senior population, and the prevalence of chronic illnesses all point to a greater need for senior care services. Senior Helpers competes in the Senior Care market against other services that provide at-home eldercare.

How Much is a Senior Helpers Franchise?

The initial Senior Helpers Franchise Fee is $55,000. But, you have to pay this upfront fee when opening a Senior Helpers franchise.

Franchise Cost

The estimated total investment necessary to begin the operation of a Senior Helpers Franchise ranges from $125,800 – $169,800

The following costs are part of the upfront costs included in the initial investment for Senior Helpers.

Many of these are one-time fees that are needed to launch the franchise.

¿How much it costs to buy a Senior Helpers franchise in 2022?

Type of ExpenditureEstimated Amount/(Low-High Range)To Whom Payment Is To Be Made
Initial Franchise Fee (1) $55,000 Us
Travel and Living
Expenses While Training
(2)
$1,500 – $3,000Airlines, hotels
and restaurants
Lease, Utility and
Security Deposits (3)
$3,000 – $4,000 Landlord,
Utilities
Leasehold Improvements
(4)
$2,500 – $6.500 Third parties
Promotional Items (5)$2,000 – $4,000Suppliers
Additional Staffing (6)$22,000 – $25,000 Employees
Furniture & Fixtures and
Equipment (including
Computer System) (7)
$5,000 – $7,000Suppliers
Supplies (8)$700 – $1,500Suppliers
Initial Advertising (9) $3,000 – $6,000 Third parties;
suppliers
Business License &
Permits (10)
$0 – $12,500Third parties
Legal/Professional Fees
(11)
$100 – $1,300Attorney /
Accountant
Insurance (12)$3,500 – $5,000Insurance agent
or carrier
Recruitment (13) $1,000 – $2,000Third parties
Additional Funds (3
months) (14)
$26,500 – $37,000 Employees,
suppliers,
utilities
Total (15) $125,800 – $169,800

Franchise Requirements

After a prospective franchisee shows interest in the brand, the Senior Helpers team conducts an initial call reviewing the territory and the investment required. Moreover, also reviewed during this call are the candidate’s personal goals regarding owning a homecare business and why they think they would be a good fit.

Owning a Senior Helpers Franchise Requires Ongoing Fees

 

Royalty: 5% of Gross sales for the first year. Adjusts after that

Marketing Fee: Up to 2% of Gross sales 

IT Fee: $275 monthly

LIFE Licensing Fee: $350 monthly

These fees are comparable to others in the industry

How much do owners make?

Franchised Senior Helpers Care Businesses: 2021 Gross Revenue (Unaudited)

Number of Franchised Businesses (open 60+ months) 221
Range of Gross Revenue $40,862 to $5,914,742
Average Annual Gross Revenue $1,229,889
Median Annual Gross Revenue $970,830
Number of Franchised Businesses Greater Than
Average
79 (35%)
Number of Franchised Businesses (open 48 – 59
Months)
17
Range of Gross Revenue $110,417 to $2,845,982
Average Annual Gross Revenue $1,137,732
Median Annual Gross Revenue $927,364
Number of Franchised Businesses Greater Than
Average
7 (41%)
Number of Franchised Businesses (open 36 – 47
months)
19
Range of Gross Revenue$85,970 – $1,935,381
Average Annual Gross Revenue $901,001
Median Annual Gross Revenue $751,270
Number of Franchised Businesses Greater Than
Average
9 (47%)
Number of Franchised Businesses (open 24 – 35
months)
15
Range of Gross Revenue $116,666 to $1,312,216
Average Annual Gross Revenue $508,484
Median Annual Gross Revenue $398,090
Number of Franchised Businesses Greater Than
Average
6 (40%)
Number of Franchised Businesses (open 12-23
months)
16
Range of Gross Revenue $68,130 to $611,486
Average Annual Gross Revenue $314,986
Median Annual Gross Revenue $317,860
Number of Franchised Businesses Greater Than
Average
8 (50%)

senior helpers

(2021) Senior Helpers Median Franchise Sales: $317,860

Initial investment (midpoint)%Profit margin of average franchise salesEstimated ProfitsTime to recoup investment
$147,800 20% $63,572 4 years
$147,800 25% $79,465 3.5 years
$147,800 30% $95,358 3 years

Based on the median sales provided by Senior Helpers’ franchise locations operating 12 to 23 months, at an average of a 25% profit margin, it will take around 3.5 years to recoup your investment. You may not get a 25% profit margin, which would elongate getting a return on your investment.

Is the Senior Helpers Franchise Profit Worth the Franchise Cost?

To assign a valuation multiple for Senior Helpers franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems.

Under $1 Million Net Sales

  • Estimated Selling Price = Net Sales – 0.46

$1 Million – $5 Million Net Sales

  • Estimated Selling Price = Net Sales – 0.50

Over $5 Million Net Sales

  • Estimated Selling Price = Net Sales – 1.10

When you go to sell a Senior Helpers franchise based on the median multiple of .50 and net sales for a 5-year franchise at $970,830, it would sell for $485,415. This is more than double the midpoint investment of $147,800.

Senior Helpers (Franchisor) Income Statement Key Insights

 SuccessorPredecessor
For the Periood: April 1, 2021, through December 31, 2021 For the period January 1, 2021 through March 31, 2021 For year ended December 31, 2020
Revenue
Royalties$13,095,279 $4,220,853 $16,123,602
General Marketing Fund Fees$2,099,508$688,674$2,640,727
Franchise Sales Fees $522,961$177,377$686,254
Other$822,578$277,557$1,039,294
Total Net Revenue$16,540,326$5,364,461$20,489,877
Operating Costs and expenses
Cost of Service expenses$1,210,587 $348,246 $1,242,910
Marketing expenses$2,595,746$721,905$3,120,009
Salaries and wages $4,384,621$2,665,031$4,583,900
General and administrative expenses$2,243,842$682,887$2,914,199
Depreciation and amortization$13,144,369$3,026,450$12,195,483
Total operating costs and expenses$23,579,165$7,444,519$24,056,501
Loss from operations($7,038,839)($2,080,058)($3,566,624)
Interest expense($828,750)($1,230,856)($5,408,468)
Acceleration of amortization of
deferred issuance costs
Other income$22,861$102,778$644,817
Net loss ($7,844,728)($3,931,562)($8,330,275)

Senior Helpers is a loss-making business with a net loss of $7.8 million in 2021. Although this has shrunk from the $8.3 million dollars of loss in 2019, it is still higher than the $3.9 million loss in 2020.

How many units have opened and closed?

Outlet TypeYearOutlets at the Start of the YearOutlets at the End of the YearNet Change
Franchised201928929910
20202993023
202130231917
Company-Owned201954-1
2020440
2021451
Total Outlets 20192943039
20203033063
202130632418

Over the last three years, the company has been expanding. Franchised units have been increasing at an average rate of 10 per year. This adds to their strong network of 319 units.

Conclusion

Senior Helpers offers people the opportunity to be part of a rapidly expanding industry that will need to cater to a growing senior population. The business has been running a huge loss for the last three years, however. While this may be the business for you, make sure to also check out other businesses offered on Vetted Biz and in Senior Care.

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