Senior Helpers Franchise Cost Justified By Strong Profits (2024)
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?
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 Expenditure | Estimated 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 – $3,000 | Airlines, 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 – $4,000 | Suppliers |
| Additional Staffing (6) | $22,000 – $25,000 | Employees |
| Furniture & Fixtures and Equipment (including Computer System) (7) |
$5,000 – $7,000 | Suppliers |
| Supplies (8) | $700 – $1,500 | Suppliers |
| Initial Advertising (9) | $3,000 – $6,000 | Third parties; suppliers |
| Business License & Permits (10) |
$0 – $12,500 | Third parties |
| Legal/Professional Fees (11) |
$100 – $1,300 | Attorney / Accountant |
| Insurance (12) | $3,500 – $5,000 | Insurance agent or carrier |
| Recruitment (13) | $1,000 – $2,000 | Third 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%) |
(2021) Senior Helpers Median Franchise Sales: $317,860
| Initial investment (midpoint) | %Profit margin of average franchise sales | Estimated Profits | Time 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
| Successor | Predecessor | |||||
|---|---|---|---|---|---|---|
| – | 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 Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2019 | 289 | 299 | 10 |
| 2020 | 299 | 302 | 3 | |
| 2021 | 302 | 319 | 17 | |
| Company-Owned | 2019 | 5 | 4 | -1 |
| 2020 | 4 | 4 | 0 | |
| 2021 | 4 | 5 | 1 | |
| Total Outlets | 2019 | 294 | 303 | 9 |
| 2020 | 303 | 306 | 3 | |
| 2021 | 306 | 324 | 18 |
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.
