The Qualicare Family Homecare Franchise Disclosure Document (FDD) asks that improper financial performance representations (earnings claims) being made in regard to the Qualicare franchise be reported to President & CEO Wayne Nathanson. So we did.
(UnhappyFranchisee.com) Dear Wayne Nathanson, President & CEO, Qualicare of America, Inc.:
The Qualicare Franchise Disclosure Document (FDD) states:
ITEM 19. FINANCIAL PERFORMANCE REPRESENTATION
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…
We do not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned of franchised outlets. We also do not authorize our employees or representatives to make any such representations. We also do not authorize our employees or representatives to make any such representations either orally or in writing…
If you receive any other financial performance information or projections of your future income, you should report it to the franchisor’s management by contacting Wayne Nathanson, Qualicare of America, Inc, 28290 Franklin Road, Southfield, Michigan 48034, Telephone (888) 561-0616
Your Qualicare FDD states that you could legally provide information on the potential financial performance of its franchisees (also called earnings claims) if you were willing to disclose those claims in its FDD and provide a basis for those claims.
And since Qualicare chooses NOT to do so, it is prohibited by the Federal Trade Commission from making any such claims.
The Qualicare Item 19 further invites anyone who believes Qualicare if furnishing such illegal claims to report it to you.
Unhappy Franchisee would like to report claims on the Qualicare website and in its franchise marketing and public relations efforts that we believe intentionally contain prohibited earnings representations meant to mislead prospective franchisees.
Franchise Business Review Earnings Claims Posted on Qualicare website
Qualicare includes the Franchise Business Review earnings claims in a USA Today article posted to its site:
“Franchise Business Review, a market research firm, found that… the potential return on investment [for senior care franchises] is significantly higher than many other franchise businesses… The survey, released last week, showed top franchises grossed $1 million or more, with gross margins at 30% to 40%.”
Qualicare also, one assumes, shares its 2014 FBR Special Report: Senior Care Franchises which contains the same misleading and poorly documented claim. Additionally, the FBR Special Report: Senior Care Franchises includes the earnings representation: “Average income of senior care franchisees: $95,264 compared with $79,684 for all franchisees.”
Do Qualicare franchisees gross over $1 million with “gross margins at 30% to 40%”?
Does the average Qualicare franchisee earn “$95,264 compared with $79,684 for all franchisees.”?
If so, why don’t you disclose that in Item 19 of your FDD?
On the franchise section of your website, you state:
The average revenue for each [senior care] business is $256,000 in 2010 and projected to grow at 5.5% a year, outpacing the projected growth of the economy…
Was the average revenue for Qualicare franchisees over $256,000 in 2010? Has it been growing at 5.5% a year? If so, why not disclose it in your FDD?
Qualicare Franchise Website Promises Success, Profit & High ROI
The franchise section of your website states:
Own a Successful Homecare Franchise
Own a successful business
If you are want to leverage a high growth industry, with a profitable franchise business model…
Can you really guarantee that each franchise you are selling will be successful?
Is there really such thing as a profitable business “model”… Are you promising success for all businesses following that model, regardless of market, regulatory or competitive factors?
Your franchise website and video displays, in large bold letters:
High Return on Investment
Highest Revenue Potential
Mr. Nathanson, if you can guarantee a high return on investment and document that you provide the “highest” revenue potential, why don’t you disclose and substantiate these claims in Item 19 of your Franchise Disclosure Document?
Why run the risk of these being deemed misleading, deceptive and even illegal Financial Performance Representations by the Federal Trade Commission, state regulatory agencies or civil courts?
We look forward to receiving clarifications, corrections, explanations, rebuttals, or other statements regarding these representations.
We will be happy to publish them in conjunction with this post.
We appreciate the invitation in your FDD to report them to you.
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TAGS: Qualicare, Qualicare franchise, Qualicare Family Homecare, Qualicare Family Homecare franchise, Wayne Nathanson, Andrea Nathanson, Nathan Weber, Qualicare of America Inc, Franchise Business Review, Franchise Business Review Awards, FBR, FBR 50, Michelle Rowan, Eric Stites, Emma Pearson, franchise earnings claims, Item 19