Amada Senior Care Franchise

Financing Details

Amada Senior Care does not offer any direct or indirect financing to its franchisees. This means that franchisees are responsible for securing all necessary funding for their business, whether for equipment, initial franchise fees, or working capital, through external sources like banks or other lenders. Amada Senior Care also does not guarantee any loans, leases, or other financial obligations that a franchisee might incur from third parties.

Litigation Summary

Amada Franchise, Inc. has a legal history that includes seven distinct legal disputes. Three of these were administrative actions initiated by the California Commissioner of Business Oversight between 2016 and 2020. These actions primarily addressed Amada Franchise, Inc.'s failure to disclose certain litigation or bankruptcy matters in its Franchise Disclosure Documents and resulted in consent orders, administrative penalties ranging from $5,000 to $30,000, and corrective measures including payments to affected franchisees and educational training for individuals. Another significant dispute was a multi-part action (arbitration and state court, later consolidated) initiated in 2016 and 2017 by a former franchisee, Hamarock Consultants, Inc. This case alleged intentional misrepresentation, fraud, breach of contract, and violations of franchise investment law related to the franchisee's business acquisition. This extensive dispute was settled in November 2018, with Amada's affiliate repurchasing the franchise and a total settlement amount of $3,000,000, which included a $750,000 payment from Amada Franchise, Inc. An additional case from 2019 involved a state court complaint alleging breach of contract and fraud against an Amada director, which settled in March 2020 for $55,000. More recently, Amada Franchise, Inc. is involved in two ongoing disputes initiated by franchisees in 2024 and early 2025. In the Micit Enterprises, Inc. case (July 2024), a franchisee alleges territorial encroachment by another franchisee. Similarly, in the Time For An Audible, Inc. case (August 2024), a franchisee claims territorial encroachment and alleges Amada Franchise, Inc. supported it. Both recent cases are currently proceeding through arbitration or state court, with Amada Franchise, Inc. denying the allegations and intending to defend them vigorously.

Renewal Conditions

To renew their Amada Senior Care franchise, franchisees must have met the Minimum Gross Billings Standards for every year during the Initial Term and be in good standing, meaning they are not in default under the Franchise Agreement or any other agreement with the franchisor or its affiliates during the last year of the Initial Term. They must also have substantially complied with the Franchise Agreement and any other agreements with the franchisor, its affiliates, and Approved Suppliers throughout the Initial Term and any Successor Term, and have fulfilled all monetary obligations to these parties. To exercise the renewal option, Amada Senior Care franchisees must give written notice to the franchisor between six months and one year before their Initial Term expires. They will then need to pay a successor fee equal to 10% of the then-current initial franchise fee. Franchisees must also sign the franchisor's then-current form of Franchise Agreement, which may include materially different terms, such as different performance standards, fee structures, and/or increased fees. If their Designated Territory is more than twice the size of the franchisor's then-current territory based on population, they may be required to divide it into two and sign multiple corresponding Successor Franchise Agreements. They may need to execute a new lease for the premises for three years with an option to renew for two years, if available. A general release of all claims against the franchisor and its affiliates must be signed. Franchisees must also complete any new training requirements, including re-attending the initial training program (tuition-free, though travel, lodging, meals, and payroll expenses are the franchisee's responsibility). Finally, if deemed necessary by the franchisor, they must upgrade the Amada Senior Care Business to meet the franchisor's then-current standards.

Staffing Notes

Amada Senior Care requires a designated 'Primary Contact' who devotes full-time attention to managing the business and has full authority to act on its behalf. This individual must meet Amada Franchise, Inc.'s standards and complete the initial training. If the business performance is unsatisfactory, Amada Franchise, Inc. may request a replacement for the Primary Contact. Franchisees typically follow one of two organizational models during the first 12 months: either the owner acts as a salesperson and hires a branch manager/operations manager for office management, caregiver recruiting, and scheduling, or the owner acts as the branch manager/operations manager and hires a salesperson. Additionally, Amada Senior Care franchisees must hire or engage a marketing manager, subject to Amada Franchise, Inc.'s approval, who meets specific qualifications and standards. If the marketing manager fails to meet standards, approval can be revoked. All principals, office, and sales employees, and immediate family members with access to confidential information must sign a confidentiality and non-compete agreement. Amada Senior Care franchisees are solely responsible for all employment decisions, including hiring, firing, training, wages, and conducting criminal background checks for all prospective and current employees to check for elder abuse or related crimes. Employees must pass required tests, submit to drug tests, and participate in safety training. For Skilled Care services, franchisees must employ licensed professional care staff (e.g., registered nurses, licensed practical nurses/vocational nurses) who are in good standing with their state's board of nursing. Some states may also require a full-time or part-time nursing director and/or administrator to oversee Skilled Care services, responsible for client assessments, supervisory visits, and clinical staff oversight.