Elder-Well
Healthcare
Founded 20193 locationsCompany Profile
Year Founded:2019
Elder-Well Franchise Cost
| Franchise Fee: | $48,500Key Metric |
| Total Investment: | $131,000 - $508,000Key Metric |
| Liquid Capital: | $47,500 |
| Royalty Fee: | 6% of gross sales |
| Marketing Fee: | 2% of gross sales |
Quick ROI Calculator
Based on Elder-Well's actual financial data
Outlet Counts by Year
Historical outlet data extracted from FDD documents
Total US Locations:3
Scale relative to 1,000 locations
Franchised Units:2
Corporate Units:1
Additional Information
Processing Franchise Details
Our AI is extracting detailed information from franchise documents.
Company history, executive team profiles, and legal disclosures will appear here once document processing is complete.
Search Interests & Trends
Search Volume Data and Trend Analysis
Search Interest & Trends
No Trends Data Available
Trend analysis data for Elder-Well is being collected. Check back soon for insights.
AI-Powered Due Diligence Analysis
Our advanced AI analyzes Franchise Disclosure Documents (FDDs) to identify potential risks and opportunities across 10 critical categories.
15
High Risk
Critical items
38% of total
19
Medium Risk
Monitor closely
49% of total
5
Low Risk
Manageable items
13% of total
39
Total Items
Factors analyzed
10 categories
6.28
Overall Score
Low RiskHigh Risk
010
Franchisor Stability Risks
3 risks identified
1
2
Limited Operating History of Franchisor
High
Explanation:
- Spend The Day Franchising, Inc. was formed in June 2019, and began offering franchises in September 2019. This short history (relative to the FDD publication date of 2025) presents a significant risk as there is limited demonstrable evidence of the franchisor's ability to successfully support a franchise system long-term.
- The previous business operated by the owners, "The Constance Rose House Adult Day Program," operated from 2014-2018, but its connection to the current franchise model and its success/failure is not clearly articulated.
Potential Mitigations:
- Thoroughly investigate the reasons for the closure of "The Constance Rose House Adult Day Program." Determine if any lessons learned are incorporated into the current franchise model.
- Request detailed financial performance information for the franchisor and its affiliate, BSocial, Inc., to assess their financial stability and profitability.
- Speak with existing franchisees to understand their experiences and assess the level of support provided by the franchisor.
FDD Citations:
- Item 1: "We are Spend The Day Franchising, Inc. a Massachusetts corporation formed on June 10, 2019."
- Item 1: "We began offering franchises in September 2019..."
- Item 1: "Our owners have operated a business of the type being franchised under the tradename 'The Constance Rose House Adult Day Program' in Massachusetts from November 2014 through November 2018."
Untested Ancillary Business
Medium
Explanation:
- The Elder-Well AT HOME ancillary business is in a pilot phase. Its viability and profitability are unproven, and the franchisor's eventual requirements for participation are unclear.
- While currently voluntary, the franchisor reserves the right to mandate participation in the future, potentially creating unforeseen costs and operational complexities for franchisees.
Potential Mitigations:
- Request detailed information about the pilot program, including financial projections and the criteria for evaluating its success.
- Seek clarification on the potential future mandatory participation and associated costs.
- Negotiate terms in the Franchise Agreement that protect against unexpected costs or obligations related to the ancillary business.
FDD Citations:
- Item 1: "We are piloting an ancillary business, Elder-Well AT HOMETM."
- Item 1: "Franchisor reserves the right to require such participation."
Dependence on a Developing Market Segment
Medium
Explanation:
- The FDD states that the adult day model is "currently an underdeveloped segment of the senior care services market." This presents a risk as market demand and acceptance are not fully established.
- While the FDD projects growth, this is not guaranteed, and the franchisee's success is tied to the market's development.
Potential Mitigations:
- Conduct thorough independent market research in your target LSA to validate the franchisor's claims about market demand.
- Develop a robust marketing plan to build awareness and generate leads in a potentially nascent market.
- Consider the competitive landscape and differentiate your services to attract clients.
FDD Citations:
- Item 1: "The adult day model offered by the franchise business is currently an underdeveloped segment of the senior care services market."
Disclosure & Representation Risks
6 risks identified
2
3
1
Limited Operating History and Financial Performance
High
Explanation:
- Elder-Well, operating under Spend the Day Franchising, Inc., was founded in 2019 and has a limited operating history. The provided financials are only for 2023 and 2024.
- This short history makes it difficult to assess long-term trends, profitability, and sustainability of the business model, especially in the face of economic downturns or industry changes.
- The company shows a net loss in both 2023 and 2024, raising concerns about its ability to achieve profitability and support its franchisees.
Potential Mitigations:
- Request older financial information or projections to understand the company's financial trajectory.
- Thoroughly research the senior care industry and market conditions to assess the long-term viability of the business model.
- Consult with a financial advisor to evaluate the franchisor's financial stability and potential for future success.
FDD Citations:
- Item 23, Exhibit A: Financial Statements for 2023 and 2024 showing net losses.
- Item 23, Exhibit A, Note 1: "Spend the Day Franchising, Inc is a Massachusetts corporation formed in June 2019."
Dependence on Franchise Fees and Limited Revenue Diversification
High
Explanation:
- The franchisor's revenue is heavily reliant on franchise fees, with a significant portion coming from initial fees. This dependence creates a risk if franchise sales slow down or if the franchisor struggles to attract new franchisees.
- Limited revenue diversification makes the franchisor vulnerable to market fluctuations and changes in the franchising landscape.
Potential Mitigations:
- Analyze the franchisor's strategy for attracting new franchisees and its historical franchise sales performance.
- Inquire about the franchisor's plans for diversifying revenue streams and developing alternative sources of income.
- Assess the overall health and growth potential of the senior care market to gauge the long-term demand for this type of franchise.
FDD Citations:
- Item 23, Exhibit A, Statement of Operations: Shows revenue breakdown with a significant portion from franchise fees.
Concentration of Credit Risk
Medium
Explanation:
- The FDD mentions a concentration of credit risk related to franchisee accounts receivable and cash held in financial institutions.
- While cash balances are stated to be within FDIC limits, a significant portion of revenue tied to a small number of franchisees could pose a risk if those franchisees default on payments.
Potential Mitigations:
- Inquire about the franchisor's credit policies and procedures for managing accounts receivable from franchisees.
- Request information on the number of current franchisees and their payment history to assess the actual concentration of credit risk.
FDD Citations:
- Item 23, Exhibit A, Note 2: "Concentration of Credit Risk-Financial instruments that potentially expose the Company to concentration of credit risk primarily consist of cash and cash equivalents and franchisee accounts receivable."
Going Concern Uncertainty
Medium
Explanation:
- The auditor's report mentions management's responsibility to evaluate conditions that raise substantial doubt about the company's ability to continue as a going concern.
- While the auditor doesn't explicitly express such doubt, the inclusion of this statement warrants further investigation.
Potential Mitigations:
- Discuss the going concern issue with the franchisor and seek clarification on their assessment and plans to address any underlying concerns.
- Carefully review the financial statements for indicators of financial distress, such as negative cash flow, high debt levels, or declining revenues.
FDD Citations:
- Item 23, Exhibit A, Auditor's Report: "In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Spend the Day Franchising, Inc.’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued."
Limited Disclosure on Franchise Arrangements
Medium
Explanation:
- The FDD provides minimal details about the franchise arrangements, including the license terms, fees, and ongoing support provided to franchisees.
- Lack of comprehensive information makes it difficult to fully understand the franchise agreement and assess the potential return on investment.
Potential Mitigations:
- Request a complete copy of the franchise agreement and all related documents.
- Seek clarification from the franchisor on any unclear aspects of the franchise arrangement, including fees, royalties, and support services.
FDD Citations:
- Item 23, Exhibit A, Note 2: "Franchise Arrangements-The Company's franchise arrangements generally include a license which provides for payments of initial fees as well as continuing royalties to the Company based upon a percentage of sales."
Reliance on a Single Auditor
Low
Explanation:
- The financial statements are audited by a single CPA firm, which could create a potential for bias or lack of objectivity.
- While not necessarily a major risk, it's worth noting the absence of a larger, more established auditing firm.
Potential Mitigations:
- Research the reputation and experience of the auditing firm to assess their credibility and independence.
- Consider consulting with a financial professional to review the audited financial statements and identify any potential red flags.
FDD Citations:
- Item 23, Exhibit A: Independent Auditor's Report by Muhammad Zubairy, CPA PC.
Financial & Fee Risks
3 risks identified
2
1
Franchisor Dependence on Franchise Fees
High
Explanation:
- The FDD discloses that the franchisor has not demonstrated adequate capitalization and relies on franchise fees to fund operations. This raises significant concerns about the franchisor's financial stability and ability to support franchisees. If the franchisor's financial health deteriorates, it may impact their ability to provide ongoing support, training, and marketing resources, potentially jeopardizing the franchisee's success.
Potential Mitigations:
- Carefully review the franchisor's financial statements and discuss their financial health with a financial advisor. Seek clarification on their plans for achieving sustainable profitability and reducing reliance on franchise fees.
- Inquire about the franchisor's historical performance and future projections, focusing on revenue streams beyond franchise fees.
- Consider the implications of the surety bond and its coverage in the event of franchisor default.
FDD Citations:
- Item 19: "The Department has determined that we, the franchisor, have not demonstrated we are adequately capitalized and/or that we must rely on franchise fees to fund our operations."
Financial Assurance Requirement (Surety Bond)
Medium
Explanation:
- While the existence of a surety bond offers some protection, it also signals a potential financial weakness of the franchisor. The fact that regulatory bodies require a bond suggests concerns about the franchisor's ability to meet its obligations. The bond amount may not fully cover all potential losses.
Potential Mitigations:
- Obtain a copy of the surety bond and review its terms and conditions with legal counsel. Understand the coverage limitations and the process for making a claim.
- Investigate the financial strength of the surety company backing the bond.
- Consider the bond as a partial mitigation, not a complete guarantee against franchisor default.
FDD Citations:
- Item 5: "Based upon the franchisor’s financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, we have secured a surety bond…"
- Item 19: "…The Commissioner has imposed a requirement for us to maintain a surety bond…which must remain in effect during our registration period."
Limited Operating History
High
Explanation:
- Elder-Well was founded in 2019, indicating a relatively short operating history. This limited track record increases the uncertainty of the business model's long-term viability and the franchisor's ability to provide effective support.
Potential Mitigations:
- Thoroughly research the franchisor's management team's experience in the healthcare industry and franchising.
- Speak with existing franchisees about their experiences and challenges.
- Carefully analyze the franchisor's business plan and projections, considering the potential impact of their limited history.
FDD Citations:
- Franchise Context: "Founded: 2019"
Legal & Contract Risks
7 risks identified
2
3
2
Waiver of Claims Limitation
Medium
Explanation:
- While the FDD states that franchisees cannot waive claims under state franchise laws, the inclusion of an "Addendum Acknowledgment to Franchise Agreement" (Item 22, Exhibit B-5) raises concerns. This addendum could potentially contain language that contradicts the non-waiver clause, creating confusion and potential legal challenges.
Potential Mitigations:
- Carefully review the Addendum Acknowledgment to ensure it does not contain any language that contradicts the non-waiver provisions related to state franchise laws. Any conflicting language should be addressed and clarified with the franchisor before signing.
- Consult with an experienced franchise attorney to review the entire Franchise Agreement, including all addenda, to ensure your rights are protected.
FDD Citations:
- Item 17: "No statement...shall have the effect of (i) waiving any claims under any applicable state franchise law..."
- Item 22: "Exhibit B: Franchise Agreement with the following Schedules...5. Addendum Acknowledgment to Franchise Agreement"
Unregistered States
High
Explanation:
- The FDD lists several states where the franchise is "Not Registered." Operating in unregistered states can expose the franchisee to legal and financial risks, including potential fines, cease and desist orders, and difficulty enforcing the franchise agreement.
Potential Mitigations:
- Confirm the current registration status of the franchise in your intended state of operation. Verify the information provided in Item 3 with the relevant state regulatory agencies.
- If the franchise is not registered in your state, understand the implications and seek legal counsel before proceeding. Non-registration may indicate legal non-compliance or ineligibility to operate.
FDD Citations:
- Item 3: "State Effective Dates" table showing multiple states as "Not Registered."
Maryland Claim Time Limit
Medium
Explanation:
- The specific mention of a three-year claim period under Maryland law, overriding any conflicting provisions in the Franchise Agreement, creates potential ambiguity. It raises questions about the applicability and enforceability of other clauses within the agreement and potential conflicts with other state laws.
Potential Mitigations:
- If operating in Maryland, carefully review the interplay between this three-year limit and any other relevant statutes of limitations. Consult with legal counsel specializing in Maryland franchise law to understand the full implications.
- Clarify with the franchisor how this specific provision interacts with other dispute resolution mechanisms outlined in the Franchise Agreement.
FDD Citations:
- Item 17: "Despite any contradicting provision in the Franchise Agreement, you have three years from the date...to bring a claim under the Maryland Franchise Registration and Disclosure Law."
Personal Guaranty and Collateral Assignment
High
Explanation:
- The requirement of a Personal Guaranty of Payment and Performance (Exhibit B-2) and a Collateral Assignment of Lease (Exhibit B-3) exposes the franchisee to significant personal financial risk. This means personal assets could be at stake if the franchise business fails or defaults on its obligations.
Potential Mitigations:
- Fully understand the terms and implications of the Personal Guaranty and Collateral Assignment. Negotiate the scope and limitations of these guarantees with the franchisor.
- Consult with a financial advisor and legal counsel to assess the potential personal financial risks and explore options for limiting liability.
FDD Citations:
- Item 22: "Exhibit B: Franchise Agreement with the following Schedules...2. Personal Guaranty of Payment and Performance...3. Collateral Assignment of Lease"
State Law Variations and Compliance
Medium
Explanation:
- The FDD mentions "State Law Addenda, if applicable" (Exhibit B-4). Variations in state franchise laws can create complexities in understanding and complying with legal requirements. Failure to comply with specific state regulations can lead to penalties and legal disputes.
Potential Mitigations:
- Carefully review the State Law Addendum applicable to your state. Consult with legal counsel specializing in franchise law in your state to ensure full compliance with all applicable regulations.
- Understand how state-specific laws might impact your franchise operations, including regulations related to terminations, renewals, and dispute resolution.
FDD Citations:
- Item 3: "Other states may require registration, filing, or exemption of a franchise under other laws..."
- Item 22: "Exhibit B: Franchise Agreement with the following Schedules...4. State Law Addenda, if applicable"
Renewal and Release Agreement Terms
Low
Explanation:
- The FDD references a Renewal and Release Agreement (Exhibit H) without providing details about its terms. Lack of clarity regarding renewal options and release conditions can create uncertainty for the franchisee regarding the long-term viability and exit strategy of the franchise.
Potential Mitigations:
- Carefully review the Renewal and Release Agreement to understand the conditions for renewal, the costs involved, and any restrictions on transferring or selling the franchise.
- Negotiate favorable renewal terms and ensure the agreement provides a clear and reasonable exit strategy.
FDD Citations:
- Item 22: "Exhibit H: Renewal and Release Agreement"
Disclosure Document Delivery Timing
Low
Explanation:
- The FDD emphasizes the legally mandated delivery timeframe for the Disclosure Document, highlighting the potential for violations. Receiving the document late or not at all can hinder the franchisee's ability to make informed decisions and could invalidate the agreement.
Potential Mitigations:
- Document the date you receive the FDD and ensure it complies with the 14-day (or 10-business day in certain states) rule before signing any agreement or making any payments.
- If the FDD is not delivered on time, do not sign any agreements or make payments until the legal timeframe is met.
FDD Citations:
- Receipt of Disclosure Document Section: "If Spend The Day Franchising, Inc. offers you a franchise, it must provide this Disclosure Document to you 14 calendar days...before you sign a binding agreement..."
Territory & Competition Risks
3 risks identified
1
2
Intense Competition from Existing Elder Care Businesses
High
Explanation:
- The FDD acknowledges competition from assisted living facilities, non-medical home care businesses, and other adult-day service programs. These established players may have greater brand recognition, market share, and resources.
- Competition could lead to price wars, reduced profitability, and difficulty attracting clients.
Potential Mitigations:
- Focus on a niche market within elder care, such as specialized care for specific conditions (e.g., dementia, Alzheimer's).
- Develop a strong local marketing strategy to build brand awareness and highlight the unique value proposition of Elder-Well.
- Offer competitive pricing and service packages while emphasizing quality of care and personalized attention.
FDD Citations:
- Item 1: "Your business will compete with other elder-care businesses such as assisted living facilities, non-medical home care businesses, and other adult-day services programs."
Increasing Competition from Emerging Adult Day Service Providers
Medium
Explanation:
- The FDD anticipates growth in the adult day services sector, which will likely attract new competitors.
- Increased competition could erode market share and profitability.
Potential Mitigations:
- Continuously innovate and improve service offerings to stay ahead of the competition.
- Build strong relationships with referral sources, such as hospitals and healthcare providers.
- Focus on customer retention through excellent service and personalized care.
FDD Citations:
- Item 1: "We believe the industry and the demand for our services will experience long-term expansion and growth, and more competitors will emerge."
Restricted Territory/Limited Service Area (LSA)
Medium
Explanation:
- Franchisees are restricted to operating within a designated LSA. This limits the potential customer base and expansion opportunities.
- The size and demographics of the LSA are crucial for business success.
Potential Mitigations:
- Carefully evaluate the demographics and market potential of the assigned LSA before signing the Franchise Agreement.
- Negotiate a favorable LSA with the franchisor, considering population density, competition, and growth potential.
- Maximize market penetration within the LSA through targeted marketing and networking.
FDD Citations:
- Item 1: "You will conduct your Franchised Business at a location that you will obtain and for which you must receive our prior approval… within a specified geographic Licensed Service Area (the “LSA”)."
- Item 1: "You are prohibited from marketing, advertising, competing for business or promoting the Franchised Business or otherwise soliciting guests outside your LSA except for the Marketing Exceptions identified in Item 12."
Regulatory & Compliance Risks
3 risks identified
1
2
Evolving Regulatory Landscape for Social Model Adult Day Programs
High
Explanation:
- The FDD states that the social model adult day program is a relatively new field and that states are likely to continue adopting regulatory frameworks. This creates uncertainty and the potential for increased compliance burdens and costs over time.
- Changes in regulations could require significant adjustments to operations, staffing, and facilities, impacting profitability.
Potential Mitigations:
- Engage legal counsel specializing in healthcare and adult day care regulations to monitor regulatory changes and advise on compliance.
- Develop a flexible business plan that can adapt to evolving regulatory requirements.
- Build relationships with state and local regulatory agencies to stay informed and proactively address potential changes.
- Allocate a contingency fund for potential compliance costs.
FDD Citations:
- Item 1: "As a social model is a relatively new field, it is likely states will continue to adopt a similar regulatory framework."
Varied State and Local Licensing Requirements
Medium
Explanation:
- The FDD notes that licensing requirements for adult day services vary significantly by state, including bonding, background checks, fees, and training requirements. This complexity can make it challenging to operate across multiple states or expand the business.
- Failure to comply with specific state and local requirements can lead to penalties, fines, or even business closure.
Potential Mitigations:
- Conduct thorough research on licensing requirements in the target state before establishing a franchise.
- Consult with legal counsel specializing in healthcare licensing to ensure compliance.
- Develop a checklist of licensing requirements and maintain meticulous records of compliance.
FDD Citations:
- Item 1: "There are many states that have licensing requirements to operate the Franchised Business as a social model day program."
- Item 1: "You are responsible for determining what your state requires, and for researching and meeting the licensure, certification, and/or registration requirements for businesses in your local jurisdiction, including all associated costs."
HIPAA Compliance
Medium
Explanation:
- The FDD mentions that the franchised business may be considered a Covered Entity under HIPAA, requiring compliance with strict regulations regarding protected health information (PHI). Failure to comply can result in significant financial penalties and reputational damage.
Potential Mitigations:
- Implement HIPAA-compliant policies and procedures, including training for all employees.
- Engage a HIPAA compliance consultant to assess and improve privacy practices.
- Maintain appropriate safeguards for PHI, including physical and electronic security measures.
FDD Citations:
- Item 1: "Your Franchised Business may be considered a Covered Entity for the purposes of HIPAA covered transaction."
Franchisor Support Risks
3 risks identified
1
2
Limited Initial Support Beyond Site Selection and Training
Medium
Explanation:
- The FDD states limited pre-opening assistance beyond site selection guidance and initial training. While design layouts and supplier lists are provided, the franchisor explicitly states they do not handle delivery or installation of equipment. This lack of hands-on support could create challenges for franchisees, especially those new to business ownership or the senior care industry.
Potential Mitigations:
- Thoroughly review the provided layouts, manuals, and supplier lists. Independently research and compare suppliers to ensure competitive pricing and quality.
- Develop a detailed project plan for pre-opening activities, including equipment procurement, installation, and staff hiring. Secure quotes and contracts from third-party vendors in advance.
- Network with existing franchisees to understand their experiences with pre-opening setup and identify recommended vendors or strategies.
FDD Citations:
- Item 11: "We do not deliver or install any of these items for you."
- Item 11: "We will assist you with site selection and, guide you in retaining a third-party real-estate brokerage firm for additional assistance."
Limited Ongoing Operational Support
Medium
Explanation:
- The FDD mentions providing assistance during "certain normal working hours" without specifying the extent or nature of this support. This vagueness raises concerns about the availability and responsiveness of franchisor support for day-to-day operational challenges.
Potential Mitigations:
- Clarify with the franchisor the specific hours of support availability, response times for inquiries, and the types of operational issues they will assist with.
- Develop internal resources and procedures for handling common operational challenges to minimize reliance on franchisor support.
- Network with other franchisees to establish peer support and share best practices for addressing operational issues.
FDD Citations:
- Item 11: "Provide assistance during certain normal working hours."
Unilateral Control Over Brand Development Fund
High
Explanation:
- The franchisor has "sole discretion" over the Brand Development Fund, including how it's spent and allocated geographically. This lack of franchisee input or transparency creates a risk that funds may not be used effectively to benefit all franchisees equally, particularly in specific regions.
- The FDD mentions the fund can compensate the franchisor and affiliates for "Corporate Services" at comparable costs to third parties. This lacks specificity and raises concerns about potential conflicts of interest and the true value received for these services.
Potential Mitigations:
- Request detailed information on past Brand Development Fund expenditures, including marketing campaigns, administrative costs, and payments to affiliates. Compare these expenses to industry benchmarks.
- Inquire about the process for proposing local marketing initiatives and the criteria used for approving fund allocations.
- Consult with a franchise attorney to understand the legal implications of the franchisor's control over the fund and potential recourse for franchisees.
FDD Citations:
- Item 11: "We shall direct all marketing programs financed by the Brand Development Fund with sole discretion..."
- Item 11: "The Brand Development Fund may compensate us or our affiliated entities for...Corporate Services..."
Exit & Transfer Risks
5 risks identified
1
3
1
Limited Transfer Rights
Medium
Explanation:
- The FDD does not provide details regarding the transfer process or restrictions. Lack of clarity on transfer rights can make it difficult to sell the franchise in the future, impacting your exit strategy.
Potential Mitigations:
- Request a copy of the Franchise Agreement and carefully review all clauses related to transfer rights, including any fees, approval processes, and restrictions.
- Consult with a franchise attorney to understand the implications of the transfer provisions and negotiate more favorable terms if necessary.
- Inquire about the franchisor's past practices regarding franchise transfers and the average time it takes to complete a transfer.
FDD Citations:
- The FDD lacks specific information on transfer rights within Item 19.
Limited Termination Rights
Medium
Explanation:
- The FDD does not provide comprehensive details about termination rights, including conditions for termination by the franchisee and potential penalties. Lack of clarity on termination options can limit your flexibility and create financial risks if you need to exit the franchise prematurely.
Potential Mitigations:
- Request a copy of the Franchise Agreement and thoroughly review the termination clauses, including grounds for termination, notice periods, and any associated costs or penalties.
- Consult with a franchise attorney to understand the implications of the termination provisions and negotiate more favorable terms if necessary.
- Inquire about the franchisor's past practices regarding franchise terminations.
FDD Citations:
- The FDD lacks specific information on termination rights within Item 17 beyond the Maryland Franchise Law reference.
Renewal Rights and Restrictions
Medium
Explanation:
- The FDD mentions a "Renewal and Release Agreement" in Exhibit H but doesn't detail the terms for renewal. Unfavorable renewal terms could impact the long-term value of the franchise and your ability to continue operating after the initial term.
Potential Mitigations:
- Review the Renewal and Release Agreement (Exhibit H) carefully to understand the conditions for renewal, including any fees, required renovations, or changes to the franchise agreement.
- Consult with a franchise attorney to assess the fairness of the renewal terms and negotiate more favorable conditions if necessary.
- Speak with existing franchisees about their renewal experiences and any challenges they faced.
FDD Citations:
- Receipt of Disclosure Document lists Exhibit H: Renewal and Release Agreement.
Potential Conflicts with State Laws
Low
Explanation:
- The FDD mentions various state registrations as "pending" or "Not Registered." Operating in a state without proper registration could lead to legal issues and impact your ability to operate the franchise.
Potential Mitigations:
- Verify the current registration status of the franchise in your target state before signing any agreements.
- Consult with a franchise attorney to understand the implications of operating in a state where registration is pending or not required.
FDD Citations:
- Item 1: State Effective Dates section lists several states with "pending" or "Not Registered" status.
Waiver of Claims Limitation in Maryland
High
Explanation:
- While seemingly protective, the specific mention of a three-year limit for claims under Maryland law, despite contradicting provisions, raises concerns. This could limit your legal recourse in case of disputes or misrepresentations, especially considering the broad waiver prohibition immediately following.
Potential Mitigations:
- Consult with a Maryland-licensed franchise attorney to thoroughly understand the implications of this clause and how it interacts with other state and federal laws.
- Seek clarification from the franchisor regarding the intent and scope of this provision.
- Document all communications and representations made by the franchisor.
FDD Citations:
- Item 17: "Despite any contradicting provision in the Franchise Agreement, you have three years from the date on which we grant you the franchise to bring a claim under the Maryland Franchise Registration and Disclosure Law."
Operational & Brand Risks
3 risks identified
1
1
1
Technology Fee Increases and Changes
Medium
Explanation:
- The franchisor has sole discretion to increase the Technology Fee ($150/month) and alter the services it covers.
- Unpredictable fee increases can strain franchisee budgets and profitability.
- Changes to technology offerings may not align with franchisee needs or preferences.
Potential Mitigations:
- Negotiate a cap on annual Technology Fee increases within the franchise agreement.
- Request clear communication and justification for any fee increases or service changes.
- Explore alternative technology solutions if franchisor offerings become unsuitable or expensive.
FDD Citations:
- Item 8: "...you are required to pay us a Technology Fee, which is currently $150 per month, but subject to increase...The amount of the Technology Fee as well as the tools, software and programs offered through the Technology Fee are subject to change at Franchisor’s sole discretion."
Mandatory Software and Hardware Requirements
Low
Explanation:
- Franchisees are required to purchase specific software (QuickBooks, Office 365, CRM) from approved suppliers, potentially limiting flexibility and cost savings.
- Hardware requirements (laptops) may necessitate additional investments and compatibility issues.
Potential Mitigations:
- Clarify the exact specifications and costs of required software and hardware upfront.
- Negotiate for flexibility in choosing software providers if possible.
- Research compatibility of existing hardware with mandated software.
FDD Citations:
- Item 8: "Other required software you are required to purchase, such as accounting software and related financial reporting software, Office 365 and customer relationship management software. Your laptop must have commercially available software such as Office 365...You must purchase accounting software that we designate as provided by an Approved Supplier (currently QuickBooks Essentials Online)..."
Location Approval and Site Development Challenges
High
Explanation:
- Franchisor has ultimate authority over location approval, potentially delaying or preventing franchise launch.
- Franchisees bear responsibility for meeting local ordinances and building codes, which can be complex and costly.
- Limited franchisor support for site selection and development increases franchisee burden.
Potential Mitigations:
- Thoroughly research local zoning regulations and building codes before proposing a location.
- Engage experienced real estate professionals and contractors to assist with site selection and development.
- Request clear criteria for location approval from the franchisor and engage in open communication throughout the process.
FDD Citations:
- Item 8: "You must select a location...subject to our approval...In determining whether a location will be approved, we will consider the territory licensed, the population density...distance from other franchise locations...We will advise you whether your proposed location is approved or disapproved within 30 days...Although we will provide you with overall, general site selection, we do not provide assistance with conforming the premises to local ordinances and building codes or obtaining any required permits..."
Performance & ROI Risks
3 risks identified
3
Lack of Franchisor Capitalization
High
Explanation:
- The FDD explicitly states that the franchisor has not demonstrated adequate capitalization and relies on franchise fees to fund operations. This raises serious concerns about the franchisor's financial stability and ability to support franchisees.
- Dependence on franchise fees for operational funding may incentivize the franchisor to prioritize selling franchises over providing adequate support and resources to existing franchisees.
- The franchisor's financial instability could lead to inadequate training, marketing, and operational support, hindering franchisee success.
Potential Mitigations:
- Carefully review the franchisor's financial statements and assess their long-term viability.
- Consult with a financial advisor to evaluate the franchisor's financial health and the potential risks involved.
- Inquire about the franchisor's plans for achieving sustainable profitability and reducing reliance on franchise fees.
FDD Citations:
- Item 19: "The Department has determined that we, the franchisor, have not demonstrated we are adequately capitalized and/or that we must rely on franchise fees to fund our operations."
No Financial Performance Representations
High
Explanation:
- The FDD explicitly states the absence of financial performance representations. This makes it difficult to assess the potential profitability of the franchise and creates uncertainty about return on investment.
- Without financial benchmarks, it's challenging to develop realistic financial projections and evaluate the feasibility of the business model.
Potential Mitigations:
- Conduct thorough independent market research to estimate potential revenue and expenses in your target market.
- Interview existing franchisees to gather information about their financial performance (while acknowledging potential limitations due to confidentiality clauses).
- Develop conservative financial projections based on your research and seek expert advice to validate your assumptions.
FDD Citations:
- Item 19: "The financial performance representation does not reflect all of the costs of sales… You should conduct an independent investigation…"
Limited Operating History & New Franchise
High
Explanation:
- Elder-Well was founded in 2019 and the FDD shows no franchised units until 2024. This limited operating history and lack of franchise experience increases the risk of unforeseen challenges and operational inefficiencies.
- The franchisor's lack of experience in supporting franchisees could lead to inadequate training, marketing, and operational guidance.
Potential Mitigations:
- Thoroughly research the franchisor's management team and their experience in the healthcare industry.
- Seek legal and financial advice from experienced professionals specializing in franchising.
- Request detailed information about the franchisor's support systems and resources for franchisees.
FDD Citations:
- Item 20, Table 1 & 3: Shows zero franchised units prior to 2024.
FDD Documents by Year
Download and view official Franchise Disclosure Documents
FDD Year: 2025
Uploaded: 8/9/2025
FDD Documents
Access and download Franchise Disclosure Documents by year