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Is Vision Source Franchise Fishy?
Written by: Patrick Findaro
Last Updated by
María Fernández Amato: January 24, 2023
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This article is based on its 2022 FDD.
Vision Source is a leading franchise network of optometric and ophthalmologic offices, dedicated to providing high-quality eye care to patients across the country. As a franchisee, you will have the opportunity to operate your own optometric or ophthalmologic office, serving a specific territory.
Contents
As a Vision Source provider, you will have the ability to diagnose vision and eye health problems, prescribe corrective measures such as glasses or contact lenses, and offer a wide range of other eye care services within the scope of your professional practice.
In addition to providing essential medical care, Vision Source franchisees also have the opportunity to retail eyewear and optical supplies to their patients. If you are a licensed optometrist or ophthalmologist looking to take control of your career and build a successful business, you might want to consider joining the Vision Source network.
The company was founded by Glenn Ellisor, O.D. in 1991. Brazos Equity Partners LLC invested in Vision Source in 2011 to support the company’s growth. In 2015, the U.S. subsidiary of Essilor International acquired Vision Source from Brazos Equity Partners LLC for an undisclosed amount.
How Much Is a Vision Source Franchise?
There is no initial Vision Source Franchise Fee. You do not have to pay this upfront fee when opening a franchise.
Vision Source Franchise Cost
The estimated total investment necessary to begin the operation of a Vision Source Franchise ranges from $85,000 to $333,300. The following costs are part of the upfront costs included in the initial investment for a franchise. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it costs to buy a Vision Source franchise in 2022.
Estimated Initial Investment
| Type of Expenditure | Amount | To Whom Payment Is to Be Made | |
|---|---|---|---|
| Low | High | ||
| Initial Franchise Fee | $0 | $0 | |
| Architectural & Miscellaneous Site Improvement Changes | $5,000 | $100,000 | Vendors |
| Leasing of Eye Care Center (deposit and first month’s rent) | $2,500 | $15,000 | Landlord |
| Signage | $500 | $7,500 | Suppliers |
| Legal Fees | $800 | $3,000 | Attorneys |
| Initial Inventories (Contact Lenses, Optical Frames & Lenses, Supplies) | $20,000 | $30,000 | Vendors & Affiliates |
| Point-of-Sale Computer & Accounting Setup | $2,000 | $8,000 | Vendors and Accounting Professional(s) |
| Office Equipment and Furniture | $30,000 | $100,000 | Suppliers |
| Prepaid Expenses and Deposits | $1,000 | $3,000 | Vendors & Utilities |
| Practice Development Expenses | $2,000 | $5,000 | Suppliers |
| Insurance (initial premium) | $1,200 | $1,800 | Insurance Company |
| Additional Funds – 3 months | $20,000 | $60,000 | Vendors & Suppliers |
| TOTAL | $85,000 | $333,300 | (Does not include real estate costs, if any) |
Ongoing Fees
Royalty: Up to 2.50% of Gross Receipts
How Much Do Franchise Owners Make?
Vision Source does not provide financials for its franchises, and instead says, “The FTC’s Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances.”
Vision Source (Franchisor) Income Statement Key Insights
Statement of Income
| (in thousands) | Years ended in December 31, | ||
|---|---|---|---|
| 2021 | 2020 | 2019 | |
| Revenues | |||
| Marketing group fees | $307,861 | $436,175 | $986,427 |
| Operating Expenses | |||
| Advertising | 3,841 | 2,503 | 183,684 |
| Online marketing | 257,071 | 335,689 | 704,808 |
| Bad debt expense | 24,393 | 80,592 | 47,767 |
| Other | 22,556 | 17,391 | 50,168 |
| Total operating expenses | $307,861 | $436,175 | $986,427 |
| Net Income (Loss) | $- | $- | $- |
Vision Source has not seen any income or loss in the last three years. This is highly unusual and may point to them intentionally hiding the financial health of its business.
How many Vision Source 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 | 3,279 | 3,250 | -29 |
| 2020 | 3,250 | 3,143 | -107 | |
| 2021 | 3,143 | 3,139 | -4 | |
| Company-Owned | 2019 | 0 | 0 | 0 |
| 2020 | 0 | 0 | 0 | |
| 2021 | 0 | 0 | 0 | |
| Total Outlets (United States) | 2019 | 3,279 | 3,250 | -29 |
| 2020 | 3,250 | 3,143 | -107 | |
| 2021 | 3,143 | 3,139 | -4 |
Over the last three years, the company has been in decline. Franchising units have steadily decreased. In the previous three years, franchises have closed at a rate of 47 units a year. This is an indicator that these stores may not be performing well. Or their franchise term is up and they are not renewing it.
Conclusion
Vision Source has a ton of franchises operating. Given that they are very secretive about their finances, we recommend that you talk to 3 – 5 existing franchisees before you start your own business with Vision Source.
While this may be the business for you, make sure also to check out other companies offered on Vetted Biz and in the Vision and Healthcare industry.
