FRANCHISE BUSINESS REVIEW Senior Care Report Raises Questions

Franchise Business Review is celebrating its 10th year as a source of awards and positive rankings for franchisors trying to sell more franchises.  Unhappy Franchisee is celebrating by taking a close look – for the first time – at its methodology, methods and representations.

(UnhappyFranchisee.Com)  Unhappy Franchisee is investigating Franchise Business Review and trying to determine whether it is a legitimate franchise marketing research firm, which it claims to be, or just a seller of awards and rankings to credibility-hungry franchise sellers, as its critics claim it is.

After reading through one of its publications, the FBR Special Report: Senior Care Franchises we had a number of questions and concerns.

We sent many of these questions a few days ago to Franchise Business Review CEO Eric Stites, President Michelle Rowan, and Editorial Director Molly Rowe but have not received any answers.

We have added a few more and are inviting them, once again, to provide clarification on some pretty basic issues.

We have dealt with professional research organizations in the past, and find that they have detailed explanations of their methodology at the ready and can generally answer the most complex questions at a moment’s notice… especially when someone starts questioning the validity of their research.

Are you familiar with Franchise Business Review and the validity of its research techniques and results?  Please share your opinions or questions below.

Questions re: FBR Special Report on Senior Care Franchises

Here are our questions and concerns regarding the Franchise Business Review senior care franchise report:

Franchise Business ReviewFBR  report states:  “To compile the data for this report, we surveyed 1,300 senior care franchise owners and researched more than 30 franchise companies.”

How many different franchise systems were the 1,300 senior care franchise systems from?  Did you send surveys to franchisees of the “more than 30 franchise companies,” just the 17 that appear on your list, or some other amount?

How do you get the contact information to survey franchisees whose franchisors have not contracted with Franchise Business Review?  How many of the 17 top Senior Care franchises have NOT paid FBR for surveying, advertising and/or lead generation?

Our concern:  Franchise Business Review (and its top franchisors) positions the franchises on its lists as the “Top Franchises” and the “Best of the Best” in terms of franchisee satisfaction in their industry segment.  But are they really only ranking companies that paid for or cooperated with the FBR survey program?

FBR’s response:  No response yet.

FBR survey reports state:  “All active franchise owners were invited to participate in this survey process… any franchise owners that [sic] had left the franchise system prior to the survey process were not included.”

By excluding franchisees who were terminated, whose franchises were reacquired by the franchisor, or who otherwise ceased operation, isn’t Franchise Business Review excluding an important segment of the franchisee population and skewing the results to the positive?

Our concern:  Franchise Business Review claims to be an independent market research firm, but excluding failed franchisees is one of several elements likely skewing the results positive.

FBR’s response:  No response yet.

FBR survey reports state: “All active franchise owners were invited to participate in this survey process… Franchise owners were made aware of the survey process by their corporate office and encouraged to participate and share their honest feedback regarding their franchise experience.

Franchise Business Review then contacted each franchisee individually and supplied them with their unique login information to complete the survey. Franchise Business Review made at least three attempts to  reach each franchise owner directly by email, the postal service and/or by telephone.”

Qualicare franchiseSeveral aspects of the methodology seem designed to skew the results positive, including

1) announcement of the survey coming from franchisor,

2)  unique login information making the survey-taker identifiable, and

3) a sample size as small as 10 respondents.  This would further dispel any notion of anonymity.

33% – 37% of the franchisees of several top-rated  senior care franchises did not complete the survey despite the encouragement of the franchisor and three attempts to get them to do so.

It would seem likely that unsatisfied franchisees would not respond or skew positive to prevent negative repercussions.

Our concern:  Franchise Business Review claims to be an independent market research firm reporting the unbiased truth, but FBR seems to have created a methodology that intentionally skews the results positive. There seems to be an inherent conflict of interest here, since only franchisors with good ratings will want to advertise with Franchise Business Review.

FBR’s response:  No response yet.

FBR  report states: “We contact all active operators within a system and ask them to rank their franchise system in the areas of financial opportunity, training and support, leadership, operations and product development, core values (e.g., honesty and integrity of the franchise company), general satisfaction, and the franchisee community.  We also ask franchisees about their market area, demographics, business lifestyle, overall enjoyment running the business, and role in the franchisee community. From this data, we identify our list of top franchises with above average satisfaction.”

FBR  report also states:  “The ROI (return on investment) for a senior care franchise can be significantly higher than that of other franchise opportunities in different industries. It is not uncommon among the top senior care franchises to build gross revenues to a million dollars or more, with gross margins of 30%–40%.”

FBR  report states:  “Average income of senior care franchisees: $95,264 compared with $79,684 for all franchisees”

Your list of survey questions does not include questions related to actual gross revenue, profit margins or the income of senior care franchisees.   You do not cite a source for these statistics.

Can you cite the source of the statistic that it’s not uncommon for top senior care franchises to gross more than a million dollars with gross margins of 30% to 40%?

Can you cite the source of the statistic:  “Average income of senior care franchisees: $95,264 compared with $79,684 for all franchisees”

Our concern:  Franchise Business Review clients and advertisers are distributing and quoting unsubstantiated Financial Performance Representations and may be violating FTC and state franchise regulations.

FBR’s response:  No response yet.

Franchise Business ReviewFBR  report states:

“’I was able to break even within 6 months, so the wait time is not long if you launch successfully and begin to grow,’ said Synergy Homecare franchisee Mitch Opalski…” 

“Leann Reynolds, president of Homewatch CareGivers, says franchisees typically break-even (revenue minus expenses and not counting owner salary or loan payments) in 6-9 months.”

Both Synergy Homecare and Homewatch Caregivers are prohibited by the FTC Franchise Rule from providing break-even representations to prospective franchisees – the audience for this guide.

Several senior care franchises have the statistics in the last question posted in the franchise marketing sections of their websites.

Our concern:  Franchise Business Review are putting its clients and advertisers at risk by disseminating earnings representations disguised as editorial content and independent research.  When these representations are provided by the franchisor to prospective franchisees, they may become Financial  Performance Representations that they neither disclosed nor can substantiate.

FBR’s response:  No response yet.



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TAGS: Franchise Business Review, Franchise Business Review Awards, Franchise Business Review Senior Care Franchise Report, FBR 50, Michelle Rowan, Eric Stites, Molly Rowe, franchise advertising, franchise marketing, Home Instead Senior Care, Visiting Angels, Qualicare, Amada Senior Care, FirstLight HomeCare, Homewatch CareGivers, Synergy HomeCare, Right at Home, BrightStar Care, Home Care Assistance, Preferred Care at Home, Interim HealthCare, Stay at Home, Caring Senior Service, Nurse Next Door, 101 Mobility, CarePatrol

7 thoughts on “FRANCHISE BUSINESS REVIEW Senior Care Report Raises Questions

  • April 27, 2015 at 8:40 pm

    Oh Eric Stites you been called out. What do you say about this?

  • May 1, 2015 at 9:34 am

    Eric Stites if you truly have a research firm you should welcome this enquiry.

    When can we expect to hear from you?

  • May 6, 2015 at 9:07 am

    Eric, Michelle and Molly are you going to give the franchisors a refund on the money they spent to advertise on FBR? Since you misinformed them about making earnings claims?

  • May 7, 2015 at 10:04 am

    Franchise attorneys for franchise owners are going to use this against franchisors.

    Franchisor attorneys are going to use this against Franchise Business Review.

    FTC is going to go after Franchise Business Review and franchisors.

    Hi Eric Stites how’s it going bud?

  • May 13, 2015 at 11:07 am

    Eric, Michelle and Molly where are on this?

  • May 21, 2015 at 1:01 pm

    Eric we’re waiting for you bud

  • May 26, 2015 at 8:52 pm

    Eric, Michelle and Molly what has the FTC had to say to you, if anything on Franchise Business Review’s reports?

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