Homewatch CareGivers
Initial Investment Range
$121,640 to $177,830
Franchise Fee
$54,330
The franchise described in this disclosure document is for the operation of a Homewatch CareGivers business. We offer franchises for businesses which provide companionship, personal care, complex personal care and nursing and other skilled services provided by home health aides, personal care providers, certified nurse assistants, licensed practical nurses and registered nurses for seniors and clients of all ages.
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Homewatch CareGivers April 23, 2025 FDD Risk Analysis
Free FDD Library AI Analysis Date: July 16, 2025
DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The financial statements present a mixed picture. The guarantor, AB Assetco LLC, reported a net loss of over $14 million in 2024, partly due to a significant impairment loss. More concerningly, the managing affiliate, Authority Brands Inc., which provides your support, has sustained large and recurring net losses, including over $100 million in 2024. These persistent losses could suggest financial strain that may impact the franchisor's ability to support you and grow the brand.
Potential Mitigations
- A franchise-experienced accountant should thoroughly analyze the audited financial statements for both the guarantor and the managing affiliate, including all footnotes.
- Understanding the implications of the multi-layered private equity ownership and the securitization structure requires discussion with your franchise attorney.
- Ask your financial advisor to assess whether the managing entity has sufficient cash flow and resources to meet its support obligations despite its reported net losses.
High Franchisee Turnover
High Risk
Explanation
The data in Item 20 tables indicates a notable level of franchisee turnover. In 2023, there were 25 total territory exits (terminations, non-renewals, and cessations) against a starting base of 222, an exit rate over 11%. In 2024, there were 15 exits against a starting base of 213. Particularly concerning is the high number of units listed as having 'ceased operations for other reasons' in 2023. This trend could indicate underlying issues with franchisee profitability or satisfaction.
Potential Mitigations
- It is crucial to contact a significant number of former franchisees listed in Item 20, especially those who 'ceased operations,' to understand their reasons for leaving.
- Your business advisor should help you calculate and benchmark these turnover rates against industry averages for home care franchises.
- A discussion with your attorney is prudent to understand the potential systemic issues that such turnover rates might imply.
Rapid System Growth
Medium Risk
Explanation
Item 20 shows the system added a net of 11 territories in 2024, but this involved opening 26 while 15 exited. While not explosive, this rate of churn combined with the managing affiliate's financial losses in Item 21 raises questions about whether support resources are strained. Rapid growth or high churn can tax a franchisor's ability to provide adequate training, site selection assistance, and ongoing operational support to all franchisees, which could impact your business's success.
Potential Mitigations
- In discussions with current franchisees, you should specifically inquire about the quality and timeliness of the support they currently receive from the franchisor.
- A review of the franchisor's support staff size and experience relative to the number of franchisees can be a helpful exercise with your business advisor.
- Your accountant can assess if the franchisor's investment in support infrastructure appears to keep pace with system changes.
New/Unproven Franchise System
Medium Risk
Explanation
The Homewatch CareGivers brand has a long history, dating back to 1996. However, the current franchisor entity, Homewatch CareGivers Franchising SPE LLC, was formed in 2021 as part of a complex securitization transaction under a private equity owner. While the brand itself is established, the current ownership and management structure is relatively new, which can introduce different operational philosophies and priorities than those of a founder-led system. This new structure carries its own distinct risks.
Potential Mitigations
- It's wise to investigate the track record of the ultimate parent, Apax Partners, and the managing company, Authority Brands, with their other franchise systems.
- Consulting your franchise attorney is important to understand the full implications of the recent change in ownership and the securitization structure.
- Speaking with franchisees who have been with the system both before and after the 2021 transaction could provide valuable insight into any changes in support or culture.
Possible Fad Business
Low Risk
Explanation
The in-home senior care industry is well-established and supported by long-term demographic trends, not appearing to be a short-term fad. The franchisor provides a range of services from companionship to complex personal care, indicating a broad and sustainable market. The risk of the entire business concept being a temporary fad appears to be low.
Potential Mitigations
- A business advisor can help you research local demographic trends and competition to confirm the long-term viability of these services in your specific market.
- Engaging with a financial advisor will help you project long-term demand and profitability based on the durable need for senior care services.
- Your attorney should review how the franchise agreement allows for the evolution of services to meet future market needs.
Inexperienced Management
Medium Risk
Explanation
Item 2 lists executives with extensive experience in the home care and franchising industries at other large brands like BrightStar Care and Camp Bow Wow. However, the current franchisor entity was formed in 2021 under a private equity owner, Apax Partners, as part of a securitization. While the management team has industry experience, the private equity ownership structure may introduce priorities focused on financial returns, which can differ from those of a traditional franchisor.
Potential Mitigations
- A business advisor can help you evaluate the resumes of the key executives listed in Item 2 to assess the depth of their relevant operational experience.
- Discussing the management team's accessibility and support quality with current franchisees is a critical due diligence step.
- Your attorney can help you understand the potential impact of private equity ownership and a securitization structure on management's priorities.
Private Equity Ownership
High Risk
Explanation
The franchisor is part of a complex structure ultimately owned by a private equity firm, Apax Partners. The FDD also details a securitization transaction, where franchise assets and royalty streams are used to back debt. This structure may create pressure to increase fees, use affiliated vendors like BuyMax, and enforce rules strictly to maximize cash flow for investors and debt service, potentially at the expense of franchisee support and long-term brand health. The agreement grants the franchisor broad rights to sell the system.
Potential Mitigations
- A franchise attorney should explain the implications of both private equity ownership and the securitization structure on your rights and the franchisor's obligations.
- Speaking with franchisees from other Authority Brands systems could offer insight into the parent company's operational style.
- Your accountant should review the financial statements to understand the level of debt and how it might influence franchisor decisions.
Non-Disclosure of Parent Company
Low Risk
Explanation
Item 1 clearly discloses the complex parent structure, including the immediate parent (AB Assetco LLC), the managing affiliate (Authority Brands, Inc.), and the ultimate owner (Apax Partners). The FDD includes audited financial statements for both AB Assetco as guarantor and Authority Brands as the service provider. Therefore, the risk of non-disclosure of a parent company appears to be low.
Potential Mitigations
- Your accountant should review the provided financial statements for both the parent guarantor and the managing affiliate to assess the system's overall financial health.
- It is important to have your attorney review the Guarantee of Performance from AB Assetco to understand the extent and any limitations of that guarantee.
- A business advisor can help you understand the roles and responsibilities of the various entities in the corporate structure.
Predecessor History Issues
Low Risk
Explanation
Item 1 identifies the predecessor entity, Homewatch CareGivers, LLC, which operated the franchise system from 1996 until the securitization transaction in May 2021. Item 3 discloses litigation that was initiated by this predecessor. The FDD appears to provide the required information regarding the predecessor's history, so this specific risk is not identified.
Potential Mitigations
- It is prudent to ask your attorney to confirm that the disclosures about the predecessor's litigation and bankruptcy history appear complete.
- When speaking with long-term franchisees, asking about their experience under the previous ownership can provide valuable context.
- A business advisor can help you research the predecessor's reputation in the industry prior to its acquisition.
Pattern of Litigation
Low Risk
Explanation
Item 3 discloses two legal actions. One was a concluded case brought by the franchisor's predecessor against a franchisee for post-termination violations, which the franchisor won. The other is a pending action brought by the current franchisor against a franchisee for collections. There are no disclosed cases of franchisees suing the franchisor for fraud or similar claims. While any litigation is noteworthy, this does not appear to represent a pattern of franchisee-initiated disputes alleging misconduct.
Potential Mitigations
- Your attorney should review the details of the disclosed litigation to understand the context and potential implications.
- It's a good practice to ask current franchisees about the nature of disputes within the system and how the franchisor typically handles them.
- A business advisor can help you research public records for any other litigation involving the franchisor or its affiliates that may not have required FDD disclosure.
Disclosure & Representation Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Financial & Fee Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Legal & Contract Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Territory & Competition Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
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Regulatory & Compliance Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
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Franchisor Support Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
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Operational Control Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Term & Exit Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Miscellaneous Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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