With over 1,100 franchises globally of which 600 in the US, Home Instead is the leading franchise in the senior home care industry along with other giants like Visiting Angels and Comfort Keepers.
So if you’re looking for a solid franchise to start in the senior care industry, Home Instead is an obvious alternative. Even though the franchise has grown abroad, the number of franchises in the US has stagnated over the past 10 years. Why is that? Is this a profitable franchise after all?
Home Instead is not only affordable (the initial investment stands at $116,500 on average) but it’s also a business earning on average just over $2 million in turnover per year.
In this article we’re diving into Home Instead franchises and their latest FDD to find out all you should know about this franchise. Let’s dive in!
Key stats
| Franchise fee | $54,000 |
| Royalty fee | 5.50% |
| Marketing fee | 2.00% |
| Investment (mid-point) | $112,000 |
| Average sales | $1,912,000 |
| Sales to investment ratio | 262.0x |
| Payback period | [franchise_value_investment_payback] |
| Minimum net worth | n.a. |
| Minimum liquid capital | n.a. |
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 | Home Instead Senior Care |
| FRANCHISE FEE | $54,000 |
| ROYALTY FEE | 5.50% |
| INITIAL INVESTMENT | $98,000 – $125,000 |
| AVERAGE REVENUE | $1,912,000 |
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About Home Instead
Home Instead Senior Care is a chain of home care services for aging adults based in Omaha, Nebraska. Its centers provide personal care services, hospice, nurse-directed care, transportation and more.
Paul and Lori Hogan founded Home Instead Senior Care in 1994 to help their family’s ailing matriarch age well at home and ease their family’s caregiving struggles. The company has grown to a recognized global homecare network, leading to its acquisition in 2021 by Honor Technology, a technology and operations platform, bringing the combined organization’s homecare services and revenue to more than $2.1 billion.
Today, it is a great business opportunity for franchise owners looking to have a share in the projected $500 billion homecare industry and continue its vision of providing compassionate care and improving the lives of millions of aging adults across the country.
Home Instead Senior Care began franchising in 1994 and by 2022 it had 1187 locations in operation, with 609 franchises in the US.
Home Instead franchise pros and cons
The Pros:
- Exclusive territory protection: The franchisor grants the franchisees the right to operate in a defined geographical area. Under the agreement, it does not authorize any other franchise or operate another Home Instead Senior Care in the area.
- Third-party financing: The franchisor has relationships with third-party partners to fund the franchisee’s startup costs, franchise fees, equipment, inventory, accounts receivable and payroll.
- Comprehensive training: Home Instead Senior Care offers its franchisees a detailed training program consisting of 9 hours of on-the-job training and 44.5 hours of classroom training. It trains them about the business concept, how to launch their centers successfully, customer service and more.
- Marketing and advertising: The franchisor has detailed marketing systems to help its franchisees attract more clients and boost their sales. These include social media, website development, SEO, loyalty program apps, national media, regional advertising and email marketing.
- Flexible franchise options: The franchisor offers its franchisees three franchise options to choose from, giving them the flexibility to work within their budgets. These are opening a new center, converting an existing center to a Home Instead Senior Care center or purchasing an existing franchise.
The Cons:
- Not a home-based opportunity: A Home Instead Senior Care franchise cannot be run from home. Franchisees must have a fixed office space, a retail facility or a warehouse.
- Not a passive investment: The franchise does not allow for absentee ownership. It requires franchisees to be fully involved in the decision-making and day-to-day operations of their centers.
- Not a part-time business: The franchisor requires franchises to be open full-time for at least 40 hours per week.
Home Instead franchise costs
You would have to invest an average of $117,000 to open a Home Instead franchised business.
The investment covers all the start-up costs you may need to open a senior home care franchise. In addition to a $59,000 initial franchise fee which you must pay to the franchisor, the investment also covers:
- Equipment: signage, equipment, operating software, etc.
- Operating costs: training expenses, lease deposit, miscellaneous costs including insurance deposits, inventory, working capital for first 6 months, etc.
Startup costs
Here’s the full breakdown of costs:
| Type of Expenditure | Amount |
|---|---|
| Initial franchise fee | $59,000 |
| Formulation costs | $1,000 – $5,000 |
| Equipment | $3,000 – $5,500 |
| Initial marketing fees | $1,000 – $5,000 |
| Operating costs | $39,000 – $55,500 |
| Total | $103,000 – $130,000 |
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| Home Instead Senior Care |
| FRANCHISE FEE | $54,000 |
| ROYALTY FEE | 5.50% |
| INITIAL INVESTMENT | $98,000 – $125,000 |
| AVERAGE REVENUE | $1,912,000 |
Home Instead franchise fees
The initial franchise fee for a Home Instead Senior Care franchise is $54,000
In addition to the initial franchise fee, you must pay to the franchisor a royalty fee of 5.50% of revenues, as well as a variable marketing fee of 2.00% of revenues.
Home Instead franchise sales
A Home Instead franchise makes $2,229,000 in revenue per year on average.
This number is the average sales per franchise for 604 of the 609 franchises that operated in all of 2021.
Yet, revenue vary significantly from one franchise to another: the highest revenue was over $9 million and the lowest just over $100,000… Here is the distribution of revenue for the 604 US franchised businesses as disclosed in the FDD:
Is Home Instead a good franchise investment?
Home Instead is an incredibly profitable business. Assuming a 10% net profit margin, we estimate the payback period for opening a new Home Instead franchise is around 3-4 years, which is excellent.
In other words, you would be able to repay creditors (banks) and / or investors within 3-4 years on average, by using the profits generated by the business. Note that we also assumed a 2-year revenue ramp-up as you wouldn’t necessarily be able to reach the average franchise revenue of $2,229,000 day one.
Find the most profitable franchises on
Compare 1,000+ franchises and download unlimited FDDs
| Home Instead Senior Care |
| FRANCHISE FEE | $54,000 |
| ROYALTY FEE | 5.50% |
| INITIAL INVESTMENT | $98,000 – $125,000 |
| AVERAGE REVENUE | $1,912,000 |
Disclaimer
Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.
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