This is an estimated pre-tax residual earnings range for one established Right at Home franchised office, not an official owner-income disclosure. The base scenario is about $133,000. An owner who personally replaces a paid manager could have an estimated owner-operator benefit of about $178,000 to $311,000, but that higher figure includes the market value of the owner’s labor rather than passive business profit.
Pre-tax estimate before financing principal and personal taxes.
2025 median for 390 offices open at least one year.
Revenue after source-defined Cost of Goods Sold, not owner profit.
Rounded IRS Form 1120-S industry ratio for tax year 2022.
482 of 566 franchised businesses supplied complete 2025 cost data.
What does Right at Home Item 19 actually measure?
Item 19 officially measures Net Billings, Gross Margin, Office Payroll, Marketing, and operating activity—not annual owner earnings. The applicable period is January 1 through December 31, 2025, and the principal revenue cohort consists of 390 standard franchised offices open for at least 12 months. Conversion Franchised Businesses are excluded.
The FDD defines Net Billings as operating revenue after specified deductions for separately stated sales taxes, documented refunds or credits, and reimbursed employee mileage and out-of-pocket costs. Credit-card fees are not deducted. For offices open at least one year, average Net Billings were $1,836,498, while median Net Billings were $1,334,579. Only 134 of 390 offices, or 34%, met or exceeded the average; 195 of 390, or 50%, met or exceeded the median. That gap shows why the median is the cleaner central revenue anchor for this analysis. Right at Home’s official U.S. franchise website reproduces the 2025 average and reporting coverage.
Item 19 uses three different population units. An Office is a Designated Area with an office from which at least one Franchised Business operates; a Franchisee Entity may own multiple Franchised Businesses; and Table 2 reports individual Franchised Businesses. The $3,056,850 entity average for 277 entities owning 525 businesses is therefore not a per-office or per-unit earnings figure and is not used in this model.
The 44.60% figure is Gross Margin, not a 44.60% owner-profit margin. Item 19 defines Gross Margin as Net Billings minus Cost of Goods Sold, including direct-care wages and specified insurance and payroll-related costs. Office Payroll, rent, royalty, technology, professional services, administrative overhead, financing effects, and other expenses can still reduce the amount available to an owner.
- Gross Margin — 44.60% average; 44.05% median
- Net Billings less source-defined Cost of Goods Sold. It is an official 2025 FDD measure, but it is not Net Income or owner compensation.
- Office Payroll — 12.10% average; 11.26% median
- Wages for office staff. Payroll taxes and payroll-related insurance were included in Cost of Goods Sold because of how franchisees reported the data.
- Marketing — 2.83% average and median
- Reported costs for promoting the business. The FDD states that Tables 3A–3C do not include every business cost.
- Population coverage
- Complete 2025 financial data were received from 482 of 566 franchised businesses, or 85%. The franchisor states that the data were not audited or independently verified.
FDD basis: Right at Home 2026 FDD, Item 19, pp. 66–72. For a public explanation of the disclosure concept, see Right at Home’s Item 19 educational resource and the Federal Trade Commission guide to evaluating potential franchise earnings.
How is the owner-earnings estimate calculated?
The estimate multiplies a same-brand FDD revenue anchor by an external all-in net-income margin. It is a scenario calculation for one established standard office, not a result reported by Right at Home, LLC. The conservative, base, and upside cases use 80%, 100%, and 120% of the 2025 FDD median Net Billings because Item 19 does not provide revenue quartiles.
Base case = $1,334,579 × 9.971% = $133,074, rounded to $133,000.
The margin anchor comes from the IRS Corporation Income Tax Returns Complete Report, Table 6.1. For tax year 2022, active Form 1120-S corporations in “Miscellaneous health care and social assistance” reported approximately $86.876 billion of total receipts and $8.663 billion of net income from a trade or business, a 9.971% ratio. The conservative and upside margins are the benchmark minus or plus three percentage points.
| Scenario | Revenue assumption | Margin assumption | Residual earnings |
|---|---|---|---|
| Conservative | $1,067,663 | 6.971% | $74,429 |
| Base | $1,334,579 | 9.971% | $133,074 |
| Upside | $1,601,495 | 12.971% | $207,734 |
One established standard office; the chart rounds the full-precision table results to the nearest $1,000.
Interpretation: Revenue and margin move together in this sensitivity model, so the spread is analytical—not a probability forecast or a claim that the middle figure is most likely.
Source: Right at Home 2026 FDD, Item 19, pp. 67–69; IRS Publication 16, 2022 Table 6.1; editorial 80%/100%/120% revenue spread and ±3 percentage-point margin band.
- Revenue: The 2025 median Net Billings of $1,334,579 is the central anchor. The 80% and 120% cases are analytical assumptions, not FDD performance bands.
- Margin: The 9.971% IRS ratio is an all-in S-corporation benchmark. Right at Home royalties and recurring costs are not subtracted again because doing so could double-count expenses already reflected in the benchmark.
- Accounting treatment: IRS net income is after reported business deductions, including salaries, officer compensation, interest, and depreciation. Financing principal, personal income taxes, and a separate capital-expenditure reserve are not modeled.
- Population mismatch: The IRS category combines multiple health-care and social-assistance businesses and entity profiles. It is not a Right at Home franchise sample and is the largest source of model risk.
How does owner involvement change the result?
Active owner operation can increase economic benefit by about $103,640 in the established standard-office scenarios, but the added amount compensates the owner for performing management work. This is an estimated owner-role adjustment, not an official Right at Home result. The figure uses the 2025 median annual wage for Medical and Health Services Managers in Ambulatory Health Care Services from the U.S. Bureau of Labor Statistics.
The 2026 FDD does not frame Right at Home as a passive-income business. Item 15 requires an Operating Principal who generally holds at least 25% ownership, makes the franchised business a primary business focus, and devotes best efforts to its supervision and conduct, unless the franchisor agrees to a waiver or lower ownership percentage. The official Right at Home owner-profile page likewise describes owners as active participants who recruit and oversee caregivers and office staff, especially during early growth.
The BLS amount is a wage proxy, not a full employer-cost estimate: it excludes employer payroll taxes, benefits, and any recruiting cost. It also does not prove that every Right at Home office would hire a manager at that rate. The add-back is appropriate only when the owner genuinely performs comparable management duties that otherwise would be paid.
The right-hand marker adds $103,640 of replacement-manager labor value to each residual-profit scenario.
Interpretation: The owner-operator figures should not be read as passive profit. Approximately $103,640 of each value represents labor that otherwise could require paid management.
Source: Residual scenarios above; BLS Ambulatory Health Care Services, 2025 median wage for Medical and Health Services Managers; Right at Home 2026 FDD, Item 15, pp. 55–56.
A buyer should separate three cash-flow concepts: business profit, compensation for the owner’s working hours, and distributions actually taken. An owner may leave cash in the business for recruiting, payroll timing, growth, or reserves even when accounting profit is positive.
Why can a newer office earn much less than the headline range?
Revenue builds sharply with office age in the official 2025 cohort data, so the earnings range is most defensible for an established office rather than a start-up year. Median Net Billings were $448,134 for offices 13–24 months old and $718,951 for offices 25–36 months old, compared with $1,434,822 for offices operating 61 months or longer.
Official 2025 revenue medians for standard franchised offices open at least one year.
Interpretation: The strongest visible earnings driver is revenue scale, and revenue scale is closely associated with operating maturity in this disclosure. The cohorts are descriptive historical groups, not a guaranteed ramp schedule.
Source: Right at Home 2026 FDD, Item 19, Table 1, p. 67. Cohort sample sizes range from 12 to 332 offices.
The maturity comparison also limits how the headline estimate should be used. Applying a mature-office margin to a young office can produce false precision because early recruiting, client acquisition, office staffing, payroll timing, and fixed overhead may differ substantially. Right at Home’s official franchise FAQ says performance is not guaranteed and directs prospects to the FDD for historical revenue and gross-margin information.
Which FDD fees can materially reduce owner earnings?
The largest disclosed recurring charge is the 5% Royalty Fee on Net Billings, followed by required brand and local marketing obligations. These are official 2026 FDD terms for a standard franchised business. They are not subtracted line by line in the scenario because the IRS net-income benchmark is already an all-in margin; a buyer’s own unit model should replace the benchmark with actual expenses and then show each fee explicitly.
| Recurring item | 2026 FDD amount | Earnings interpretation |
|---|---|---|
| Royalty Fee | 5% of Net Billings | Variable expense payable weekly; minimum royalty requirements can apply after the initial no-minimum period. |
| Brand Marketing and Promotion Fee | 2% on first $1 million; 1% on next $2 million | Variable fund contribution, subject to the FDD’s MSA provisions and minimums. |
| Local Marketing | Generally 2% of Net Billings | May be reduced to 1% when the stated combined 3% cap applies; the franchisor may remove the cap on notice. |
| Ongoing Technology Fee | $2,100 annually | Fixed annual charge that may increase under the FDD formula. |
| Home Care Operating Software | $160–$4,800 monthly | Derived annual range of $1,920–$57,600, driven by client count and possible higher tiers. |
| Policy and Procedure Manual renewal | $500–$750 annually | Third-party renewal cost that may change. |
At the base revenue level, royalty and marketing obligations are material, but caregiver labor economics usually remain more consequential because Cost of Goods Sold consumes about 55.4% of Net Billings at the FDD’s average Gross Margin. Buyers should model bill rates, caregiver wages, workers’ compensation, insurance, recruiting, overtime, and unfilled shifts by market rather than relying on a system average.
FDD basis: Right at Home 2026 FDD, Item 6, pp. 10–16. Item 7 startup investment is not treated as an annual operating expense. The official Right at Home research process includes an FDD review followed by validation conversations with current franchise owners.
What could move actual earnings outside the range?
The largest unresolved uncertainty is the complete expense structure of a comparable Right at Home office in the buyer’s market. This uncertainty applies to the 2025 standard-office population and to every independent scenario on this page. Item 19 discloses revenue, Gross Margin, Office Payroll, and Marketing, but it does not reconcile rent, royalties, technology, professional fees, owner compensation, manager compensation, interest, depreciation, working-capital requirements, or other overhead to a final profit figure.
- Request Item 19 written substantiation. Confirm the 2025 cohort definitions, reporting completeness, treatment of transfers, and whether a candidate territory resembles the offices behind the medians.
- Interview owners by maturity and revenue band. Compare 13–36 month offices with 61+ month offices; ask separately about one-office and multi-business entities.
- Rebuild the profit-and-loss statement. Obtain local bill rates, caregiver wage rates, payroll burden, workers’ compensation, office payroll, rent, insurance, royalty, marketing, software, recruiting, professional fees, and bad-debt experience.
- Separate owner labor from distributions. Ask how many hours the Operating Principal works, whether an office manager is employed, and what salary or draw is included in the reported expenses.
- Model debt separately. The earnings range excludes financing principal and personal taxes. Test the buyer’s actual loan amount, interest rate, term, and required reserves rather than applying a generic debt assumption.
- Check closure and transfer context. Item 20 reports 29 franchised openings, two outlets ceasing operations for other reasons, and 15 transfers during 2025; contact current and former franchisees listed in the disclosure.
The FTC’s franchise-buying guidance emphasizes that gross sales do not establish profit, averages can be distorted by high performers, and buyers may request written substantiation for Item 19 claims. Right at Home also describes validation interviews after FDD review on its official process page. Those interviews are the best route to replacing the broad IRS proxy with market-specific evidence.
What is the strongest defensible annual earnings range?
The strongest defensible range is approximately $74,000 to $208,000 of estimated pre-tax residual earnings for one established standard Right at Home office, with a base case near $133,000. This Mode C scenario is anchored to 2025 Item 19 Net Billings and is not an official owner-income figure. For an owner who personally performs manager-level work, estimated owner-operator benefit rises to roughly $178,000 to $311,000, but the difference is compensation for labor rather than passive profit.
The dominant earnings driver is Net Billings scale supported by office maturity and caregiver labor economics. The largest uncertainty is the absence of a same-brand, fully reconciled Operating Profit or Net Income line. Before relying on the range, a buyer should verify Item 19 substantiation, construct a territory-specific operating statement, and compare it with current and former franchisee interviews across maturity cohorts and owner-role structures.