Financial Performance Representations
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.
For the purposes of this Item 19, each SYNERGY HomeCare “Unit” refers to a single Protected Territory. Many SYNERGY HomeCare Businesses operate more than one SYNERGY HomeCare Unit because they have multiple Protected Territories. As of December 31, 2015, there were a total of 154 SYNERGY HomeCare Businesses in operation with a total of 291 Units. The following is a statement of the “Average Annual Gross Sales” of 79 SYNERGY HomeCare Businesses consisting of 119 Units that have been in operation for 3 years or more as of December 31, 2015, for the period from January 1, 2015 to December 31, 2015. The remaining 75 SYNERGY HomeCare Businesses consisting of 172 Units, were not included in the information below because the SYNERGY HomeCare Businesses had not been in operation for 3 years or more as of December 31, 2015 or the businesses closed during the 2015 calendar year. “Average Annual Gross Sales” was calculated by taking the total Gross Sales (as defined in Note 1 of Item 6) reported for each SYNERGY HomeCare Business by a franchisee during the 2015 calendar year and dividing it by the number of SYNERGY HomeCare Businesses in the Number of Years of Operation. We have presented Average Annual Gross Sales by SYNERGY HomeCare Business instead of by individual Units because our franchisees report Gross Sales by business and not by Units. Of the SYNERGY HomeCare Businesses in the statement, 32 of them operated one Unit and the rest operated two or more Units. The information presented in the statement does not distinguish between SYNERGY HomeCare Businesses with one Unit and SYNERGY HomeCare Businesses with two or more Units.
These statements have not been prepared in accordance with generally accepted accounting principles. The figures were compiled from data received from the SYNERGY HomeCare franchisees using a uniform system of reporting Gross Sales to us. All of the SYNERGY HomeCare Businesses offered substantially the same services to the public. Substantially the same services were offered by us to the SYNERGY HomeCare Businesses upon which the data is based.
(1) These SYNERGY HomeCare Businesses opened between January 1, 2005 to December 31, 2007. These 10 SYNERGY HomeCare Businesses operated 25 Units. Of the 10 SYNERGY HomeCare Businesses, 3 Businesses (30%) met or exceeded the average annual Gross Sales and these Businesses operated a total of 10 Units. Of the 10 SYNERGY HomeCare Businesses, 6 Businesses (60%) met or exceeded the Average Gross Profit Margin and these Business operated a total of 12 Units.
(2) These SYNERGY HomeCare Businesses opened between January 1, 2008 and December 31, 2010. These 44 SYNERGY HomeCare Businesses operated 83 Units. Of the 44 SYNERGY HomeCare Businesses, 22 Businesses (50%) met or exceeded the average annual Gross Sales and these Businesses operated a total of 46 Units. Of the 44 SYNERGY HomeCare Businesses, 26 Businesses (59%) met or exceeded the Average Gross Profit Margin and these Businesses operated a total of 44 Units.
(3) These SYNERGY HomeCare Businesses opened between January 1, 2011 and December 31, 2012. These 25 SYNERGY HomeCare Businesses operated 50 Units. Of the 25 SYNERGY HomeCare Businesses, 11 Businesses (44%) met or exceeded the average annual Gross Sales and these Businesses operated a total of 27 Units. Of the 25 SYNERGY HomeCare Businesses, 14 Businesses (56%) met or exceeded the Average Gross Profit Margin and these Businesses operated a total of 28 Units.
(4) Gross Sales has the meaning described in Item 6.
(5) This section identifies our franchisees’ average gross profit margin for 2015. Average gross profit margin is defined as gross margin divided by revenues. Gross margin is defined as Revenues less Cost of Good Sold. Cost of Good Sold includes only wages paid to caregivers, excluding state and federal payroll taxes and worker’s compensation insurance.
The information described above is based on SYNERGY HomeCare Businesses open and operating for at least 3 years and does not include information based on SYNERGY HomeCare Businesses that have been operating for less than 3 years.
Except as explained in Note 5, these figures do not reflect the costs of sales, operating expenses, or other costs or expenses that must be deducted from the gross revenue or gross sales figures to obtain your net income or profit. You should conduct an independent investigation of the costs and expenses you will incur in operating your SYNERGY HomeCare Business. Franchisees or former franchisees, listed in this disclosure document, may be one source of this information.
Many factors such as your location, management capabilities, local market conditions and other factors, are unique to your territory and may significantly impact the financial performance of your business.
You are responsible for developing your own business plan for your business. You should contact a professional of your own choosing to help you read this Item 19 (and the entire FDD) and to help you determine your costs and expenses.
Some SYNERGY HomeCare Businesses have earned this amount. Your individual results may differ. There is no assurance you will earn as much.
Written substantiation of the data used in preparing this Statement will be made available to you upon reasonable request.
Other than the preceding financial performance representation, we do not make any financial performance representations. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future revenue and/or income, you should report it to the franchisor’s management by contacting Peter Tourian, SYNERGY HomeCare Franchising, LLC at 1757 E. Baseline Road, Bldg. 6, Suite 124, Gilbert, Arizona, 85233, (480) 659-7771, the Federal Trade Commission, and the appropriate state regulatory agencies.