The original documents were scanned as an image. The original file can be downloaded at the link above.

Sample UFOC



(a Colorado corporation)

2865 South Colorado Boulevard

Denver, Colorado 80222


Homewatch International, Inc., a Colorado corporation, is offering franchises for the operation of a business which offers companionship, personal care services, and minor medical services provided by home health aides, personal care providers, certified nurse assistants, licensed practical nurses and registered nurses to the aging, disabled, recovering, rehabilitating, and the convalescing in their own homes within our community.

The initial franchise fee is $28,500 for a minimum of 30,000 persons 65 years of age or older living in your designated territory. Territories may be determined by political boundaries, such as cities or counties, by a combination of zip codes meeting our standards, or other criteria. The estimated initial investment required ranges from $49,150 to $76,150, inclusive of the initial franchise fee, for a territory containing 30,000 persons age 65 or older.

A second territory may be awarded to you if you meet our financial and experience requirements lo qualify for a second territory. The second territory must be contiguous with the initial territory. A second territory may be operated from the initial licensed location and must be purchased simultaneously with the initial territory. The Franchise Fee for the second territory is $20,000 for a minimum of 30,000 persons 65 years of age and older living in the second territory. The estimated initial investment for two territories, each containing 30,000 people, ranges from 69,150 to 96,150, inclusive of the initial franchise fee.

If you desire, and we agree to grant to you, a territory or second territory containing more than 35,000 or less than 30,000 persons age 65 or older, the initial franchise fee for the territory or second territory will be increased by $500 per 1,000 persons age 65 and older living in the territory in excess of 35,000, or reduced by $500 per 1,000 persons age 65 or older living in the territory less than 30,000; in either case, rounded to the nearest 1,000 persons.

Risk Factors:





Information comparing franchisors is available. Call the state administrators listed in Exhibit A or your public library for sources of information. Registration of this franchise by a state does not mean that the state recommends it or has verified the information in this Offering Circular. If you learn that anything in this Offering Circular is untrue, contact the Federal Trade Commission and the state authority listed in Exhibit A.

The states listed in Exhibit A may require registration or filing of this franchise offering. Some of these states may require different or additional disclosures (see Exhibit J) or revisions to the agreements (see the Riders to the applicable agreement(s)).

The Date of Issuance of this Offering Circular in non-registration states is: ___________, 2006.

The Effective Dates of this Offering Circular for the following states are:





New York:





ITEM                                                                                                                       PAGE

1             THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES.........................................................1

2             BUSINESS EXPERIENCE.....,.................................................................................................................3

3             LITIGATION..,......................................................................................................................■...................5

4             BANKRUPTCY........................................................................................................................................5

5             INITIAL FRANCHISE FEE.....................................................................................................................5

6             OTHER FEES...........................................................................................................................................7

7             INITIAL INVESTMENT..........................................................................................................................9

8             RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES..................................................12

9             FRANCHISEE'S OBLIGATIONS.........................................................................................................13

10           FINANCING...........................................................................................................................................14

11           FRANCHISOR'S OBLIGATIONS........................................................................................................14

12           TERRITORY...........................................................................................................................................22

13           TRADEMARKS.....................................................................................................................................24

14           PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION..................................................25


THE FRANCHISE BUSINESS..............................................................................................................26

16           RESTRICTIONS ON WHAT GOODS AND SERVICES YOU MAY SELL.......................................27

17           RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION.....................................27

18          PUBLIC FIGURES.................................................................................................................................30

19           EARNINGS CLAIMS.............................................................................................................................30

20           LIST OF OUTLETS................................................................................................................................35

21           FINANCIAL STATEMENTS.................................................................................................................39

22           CONTRACTS.........................................................................................................................................39

23           RECEIPT.....................................................................................................................................Last Page


Exhibit A

List of State Agencies/Agents for Service of Process

Exhibit B

Franchise Agreement

Exhibit C

Nondisclosure and Noncompetition Agreement

Exhibit D

List of Franchisees

Exhibit E

Franchisees That Have Left the System

Exhibit F

Financial Statements

Exhibit G

Franchise Brokers

Exhibit H

Operations Manuals Tables of Contents

Exhibit I

Disclosure Acknowledgement Statement

Exhibit J

Addendum to Offering Circular for Certain States


The Franchisor.

The Franchisor is Homewatch International, Inc. For ease of reference, Homewatch International, Inc. will be referred to as "we," "us," "our," or "HTI" in this Offering Circular. We will refer to the person or entity buying the franchise as "you" or "your" throughout this Offering Circular, unless otherwise noted. If the franchisee is a corporation, partnership or limited liability company, certain provisions of the Franchise Agreement will also apply to the owners and will be noted.

HII is a Colorado corporation that was incorporated on December 28, 1992. We currently conduct business under the name "HOMEWATCH CAREGIVERS" and our corporate name. Our principal business address is 2865 South Colorado Boulevard, Denver, Colorado 80222. Our agents for service of process are disclosed in Exhibit A.

'Our predecessor, Homewatch Corporation ("HC"), was incorporated in Colorado on December 15, 1976. On December 31, 1992, HII acquired certain assets of HC including its rights as a franchisor. HC was merged into HII on July 12, 1997 and HC ceased to exist after that date. As of December 31, 2005, HII operated three HOMEWATCH CAREGIVERS Businesses, and officers and directors of HII owned five HII franchises (as further discussed below). We have no "affiliates," as that term is defined for this Item 1.

The Franchises.

We offer franchises for the establishment and operation of a business ("HOMEWATCH CAREGIVERS Business" or "Business") offering companionship, personal care, and minor medical services to private pay and insured clients living at home. Services are provided by home health aides, personal care providers, certified nurse assistants, licensed practical nurses and registered nurses to the aging, disabled, recovering, rehabilitating, and convalescing ("HOMEWATCH CAREGIVERS Services") in the client's own home. You will be required to abide by all rules and regulations that apply to a HOMEWATCH CAREGIVERS Business in your home state. The Businesses use our service mark "HOMEWATCH CAREGIVERS" and related service marks and trademarks ("Marks"), as well as our proprietary business methods ("Licensed Methods"). A listing of the types of services offered is set forth in Exhibit III to the Franchise Agreement. The Franchise Agreement is attached to this Offering Circular as Exhibit B.

Market for the Franchise Services and Competition.

The target market for the HOMEWATCH CAREGIVERS Services you will offer will be the general public, particularly clients who utilize outside services to take care of various personal care needs and clients needing, or requiring living assistance services to continue to live at home ("Clients"). Your Clients will be aged, disabled, rehabilitating, convalescing or recovering from accidents or injuries of any age. The HOMEWATCH CAREGIVERS Services are rendered by home health aides, personal care providers, certified nurse assistants, registered nurses and licensed practical nurses. You will compete with a wide variety of other businesses and individuals that provide similar services in your market area. There are numerous enterprises and individuals in all areas of the United States providing some or all of the services you will offer through your HOMEWATCH CAREGIVERS Business, such as senior daycare centers, convalescent care providers and assisted living services.


You must comply with the federal Health Insurance Portability and Accountability Act of 1996, as amended ("HIPAA") when using and disclosing information about Clients. In addition, you must follow state and federal health insurance and Medicaid procedures, if you are Medicaid certified, and stay informed about changes to them. You must determine whether there are state and local laws that regulate the operation of a HOMEWATCH CAREGIVERS Business in your area.

Currently 22 states require licenses or otherwise regulate some aspect of home care businesses. You are responsible for determining whether licensing or other regulations exist and if so, how you will comply with them.

You must comply with the federal Fair Credit Reporting Act when performing background checks on employees of your Business.

As of the date of this Offering Circular, we do not know if there are other state, local or federal. regulations specific to the operation of a HOMEWATCH CAREGIVERS Business in your area. We will provide some assistance to you in complying with regulations, but we strongly recommend that you consult with an attorney regarding federal, local and state laws, rules and regulations that may affect the operation of your Business. In particular, we recommend that you check your state and local laws and regulations regarding bonding, insuring, and training your personnel who will be assisting Clients in their homes.

We require that your employees be bonded, insured and have some prior experience. You should also familiarize yourself with federal, state or local laws of a more general nature that may affect the operation of your HOMEWATCH CAREGIVERS Business. It will be your responsibility to comply with any laws affecting your Business.

Franchisor's Prior Experience.

Since 1980, first HC, and then HE, have operated three HOMEWATCH CAREGIVERS Businesses in Denver, Colorado, offering HOMEWATCH CAREGIVERS Services. As of December 31, 2005, five HOMEWATCH CAREGIVERS Businesses were operated by franchisees owned by officers and directors of HII (see Item 20). HE sold franchises for pet/housesitting, handyman and companionship service businesses that used the service mark HOMEWATCH from 1993 through 1997. Some of our franchisees converted their businesses to the HOMEWATCH CAREGIVERS Services presently offered, but as of the date of this Offering Circular, we have only two franchisees offering pet/housesitting services using the HOMEWATCH Mark (see Item 20). We have been offering franchises exclusively for HOMEWATCH CAREGIVERS Services since January 1996. As of the date of this Offering Circular, other than as described above, neither HC nor HII have offered franchises in any other line of business, or owned or operated any HOMEWATCH CAREGIVERS Businesses.



Chief Executive Officer and Director: Paul A. Sauer

Mr. Sauer has served as Chief Executive Officer of HII since October 2005, he is the founder of HII, and he has been a Director of HII since its inception in December 1992. Since their inception, he has


also served as President and a Director of Home Care Services of Denver, Inc. ("HCD"), Homewatch CareGivers of the Greater Portland Area, Inc. ("HCP"), Home Care Services of ND, Inc. ("HCND"), and Homewatch CareGivers of Australia ("HCA"), all HII franchisees. Mr. Sauer served as President of HII from December 1992 to October 2005. He was President and Chairman of the Board of our predecessor, Homewatch Corporation, from 1976 to July 1997 when HC was merged into HII. Prior to that, Mr. Sauer was sole proprietor of Watchdog, a home services business in Denver, Colorado, from June 1973 to 1976. From 1967 to 1973, he was Chief Civilian Biochemist at Fitzsimmons Medical Center, a U.S. military hospital located in Denver, Colorado. Mr. Sauer was nominated for Entrepreneur of the Year in Denver, Colorado by the Denver Business Journal and INC Magazine in 1989. He has been recognized by Entrepreneur Magazine several times as the Outstanding Homecare Company during the last 10 years. Mr. Sauer was also recognized as National Sales Manager of the Year by Sales Professionals Inc. in both 1985 and 1989. Mr. Sauer has an Associates Degree in Marketing and Business from Regis College and a BS degree from the University of Nebraska in Medical Technology, where he majored in biochemistry.

President and Director: Leann Reynolds

Ms. Reynolds has served as the President of HII since October of 2005; and since 2001, she has been a Director of HII. From August 2003 until present, she has also served as the Vice President of HCP, of which she is a co-owner. From 2005 to present, she has been a Director of HCA. As the franchise co-owner of HCP, Ms. Reynolds achieved over 1 million in gross receipts annually within 2 years of initial start-up. Ms. Reynolds joined HE in 2001 and provided sales and operational support to the Northwest region. From 1998 to 2003, Ms. Reynolds served as a Northwest Services and Support Manager for Hewlett Packard, located in Portland, Oregon. From 1996 to 1998, Ms. Reynolds worked for Deutsch Communications in Munich, Germany implementing telecommunications services to 12 different cities. Ms. Reynolds has a Business degree with emphasis in International Marketing from the University of Colorado.

Director: Beatrice R. Sauer

Ms. Sauer has served as a Director of HII since its inception. Since their inception, she has been Vice President and a Director of HCD and HCND. She was a Director of HC from 1976 to July 1997 and Vice President of HC from 1976 through 1987. Ms. Sauer worked full time as a medical technologist and served as the Blood Bank Supervisor at Columbia Health Hospital in Aurora, Colorado, from 1990 through September 2000. Ms. Sauer has a B.S. degree in Medical Technology from Colorado State University. Ms. Sauer is currently retired and does not participate in the day-to-day operations of HII.

Senior Vice President of Franchise Support: G. Roger Rhodes

Mr. Rhodes has been our Senior Vice President of Franchise Support since January 2006. He served as our Senior Vice President of Business Development from March 2004 to January 2006. From March 2003 to March 2004, he was our Director of Business Development. From July 2000 through March 2003, Mr. Rhodes served as Vice President of Clinical Programs for UltraGuide, Inc., a medical device company providing three-dimensional guidance for surgeons and interventional radiologists, located in Lakewood, Colorado. Mr. Rhodes holds a Bachelor of Business Administration degree from the University of North Texas and a Masters in Business Administration from Rockhurst University.

Senior Vice President of Business Development: Jennifer Tucker

Ms. Tucker has served as our Senior Vice President of Business Development since January 2006. She was our Senior Vice President of Franchise Support from October 2005 to January 2006. From


January 2002 to October 2005, she served as our Vice President of Franchise Support. Before joining H1I in January 2002, Ms. Tucker served as the Disability Wellness Coordinator for MCI WorldCom, then known as MidAtlantic Corporate Health, in Denver, Colorado, from 1998 through 2001. Ms. Tucker holds a Bachelors Degree in English, Government and Law from Lafayette College and a Masters Degree in Health Sciences from Johns Hopkins School of Public Health.

Senior Vice President of Franchise Development: Judy M. Wood

Since October 2005, Ms. Wood has served as our Senior Vice President of Franchise Development. She joined HII in January 2005 as Franchise Development Manager. From April 2003 to January 2005, Ms. Wood served as Franchise Development Manager for NHBA in Denver, Colorado. From August 2002 to April 2003, she was a sales associate for Mauldin Corporation, a La-Z-Boy franchisee in Denver, Colorado. From January 1998 to June 2002, Ms. Wood worked as a consultant in the information technology staffing industry, in Denver, Colorado, first as a manager with Command Technologies and then as an independent consultant providing solutions to client's IT staffing needs. Ms. Wood started working for The PACE Group in 1987 as a sales consultant in Dallas, Texas, and left as a Managing Principal and President of the Denver, Colorado office in 1997. Ms. Wood holds a Bachelors Degree from the Ohio State University in Columbus, Ohio.                                      .

Senior Vice President Finance: Lora Kelly

Ms. Kelly has been our Senior Vice President Finance since October 2005. From October 2003 to October 2005, she was our Director of Franchise Services. From August 2001 to October 2003, she was our Franchise Operations Manager. From September 1998 to August 2001, Ms. Kelly served as executive assistant and corporate secretary of Entrepreneur Investments, LLC, a company that started new companies and listed their stock for public trading, located in Littleton, Colorado.

Vice President of Franchise Development: Alexander Morrison

Mr. Morrison has served as our Vice President of Franchise Development since March 2003. From August 2002 to March 2003, he was our Franchise Development Manager. From June 1988 to October 2001, Mr. Morrison was an Account Manager and Sales Representative for Ethicon Endo-Surgery, Inc., a Johnson & Johnson company, located in Cincinnati, Ohio, where he consulted with surgeons and sold medical operating room equipment. Mr. Morrison has a degree in English from Colorado College in Colorado Springs, Colorado.

Vice President International Sales: Lisa Bolton

Ms. Bolton has been our Vice President International Sales since August 2005. From February 2005 to August 2005, she was Director of Franchise Marketing of HII. Before joining HII in February 2005, Ms. Bolton served as Marketing Director for Crestcom International, Ltd. from October 1992 to January 2005. From January 1998 to January 2005, she also served as Marketing Director for Crestcom's affiliated company, FasTracKids International, Ltd., located in Greenwood Village, Colorado. Ms. Bolton holds a Bachelors Degree in International Relations from the University of Colorado.

Franchise Brokers:

See Exhibit G to this Offering Circular for a list of our franchise brokers.



1.          In re matter of Homewatch International, Inc. On January 20, 1997, a Consent Cease and Desist Order was entered against us by the State of Minnesota, Commissioner of Commerce, in which we were ordered to stop offering or selling franchises in the state of Minnesota until we either registered or qualified for an exemption from registration and paid a $500 civil penalty. We admitted no wrongdoing, but paid the fine and registered in the state of Minnesota in 1998.

2.          Joe and Linda Itman and LJI, Inc. v. Homewatch International, Inc., Case No. 77E 144 00003301. On February 5, 2001, Joe and Linda Itman, former franchisees, filed an arbitration claim against us with the American Arbitration Association. The Itmans alleged that we agreed to buy their franchise business and then breached that agreement. The Itmans further claimed that we breached various franchise-related agreements, fraudulently induced them to enter into those agreements and that we intentionally interfered with their prospective contractual relationships. We denied their claims and asserted that the Itmans failed to pay past due franchise fees and royalties and made material misrepresentations to us during the negotiation of the sale of the franchise. HII settled this case on September 4, 2001, by paying the plaintiffs a total of $28,000.

See Exhibit G to this Offering Circular for litigation information for our franchise brokers. Other than these two actions described above and those in Exhibit G. no litigation is required to be disclosed in this Offering Circular.



No person previously identified in Items 1 and 2 of this Offering Circular has been involved as a debtor in proceedings under the U.S. Bankruptcy Code required to be disclosed in this Item.



Except as noted below, you pay an initial franchise fee of $28,500 for a minimum of 30,000 persons 65 years of age or older living in the territory we grant to you ("Territory"), as further described in Item 11 below. An additional Territory ("Second Territory") may be awarded if you meet our financial and experience requirements. See Item 11 for more information about the Second Territory. A Second Territory must be purchased simultaneously with the initial Territory. The franchise fee for the Second Territory is $20,000 for a minimum of 30,000 persons 65 years of age or older living in the Second Territory. If you desire, and we grant you, a Territory or Second Territory containing more than 35,000 or less than 20,000 persons age 65 and older, the initial franchise fee for the Territory or Second Territory (as applicable) will be increased by $500 per 1,000 persons age 65 and older living in the Territory in excess of 35,000, or reduced by $500 per 1,000 persons age 65 and older living in the territory less than 30,000; in either case rounded to the nearest 1,000 persons.


As of the date of this Offering Circular, we obtain the demographic information to determine the size and boundaries of your Territory from Claritas, Inc., located in San Diego, California, using data

from 2005.

The initial franchise fee is fully earned by us when you sign the Franchise Agreement and we do not refund it under any circumstances

Our franchise fee includes the following value-added packages:

1.          Training - Intense five day initial training course covering all components of the

business, including operations, marketing, business planning, administration and safety.

2.          Marketing - Proprietary databases of people in your Territory from whom you may receive referrals; assistance with opening marketing campaign; and access to preferred provider programs, third party payor sources, national account agreements and strategic alliances. You receive hard copy as well as downloadable material from our Intranet for most of your marketing needs. We also provide assistance with customizing specialized materials for special events.

3.          On-Going Support - One-on-one support from our Franchise Support Department beginning up to 8 weeks before, and continuing for the period running 8 weeks after, the initial training program. Other on-going support includes regular tele-conferences, Internet conferences, in-field support, newsletters, regional conferences and an Annual National Conference. You are also given a 52-week business plan and 12-month pro forma financial statement that provides a very clear roadmap of your activities for your first year in business.

4.          Services - Homewatch CareGiver Academy for continuing education for CareGivers and LTG (Lifetime Training Guarantee) for your personnel during the initial term of your franchise agreement. Prospective client referrals originating from our corporate Website and Client and care giver leads from numerous preferred provider programs and networks established by HII. Local press releases and campaigns designed for your business.

Occasionally, we may offer incentive or bonus plans to attract new franchisees. Incentives, when offered, may vary as to amount and duration. We offer incentives for the benefit of the entire system, because more franchisees will be able to handle more Clients, and expansion of our system will improve the HOMEWATCH CAREGIVERS brand recognition and image nationwide.

If you qualify for the VetFran program, which requires that you can provide HII evidence of an honorable discharge from the armed services, you will receive a 5% discount on the initial franchise fee.

Except as described in this Item 5, all franchisees currently acquiring a franchise pay the same franchise fee.




Name of Fee


Due Date



5% of monthly Gross Billings on non-Medicaid Clients.2 You must pay a 2% Royalty on all Medicaid Gross Billings.

Payable monthly by the 15 th of each month for the preceding month

Reports are due each month even if no Royalty is owed. The Royalty will be paid by electronic funds transfer.

Local Advertising and Marketingl,J

You must spend a minimum of 4% of Gross Billings on local advertising.2 The 4% is averaged on an annual basis

As incurred but not less often than every month

(Note 3)

National Advertising Fee1

1% of monthly Gross Billings

Payable monthly by 15th of each month for the preceding month

This fee is for creation, production, placement and dissemination of advertising and marketing materials. See Item 11. This fee is paid by a separate electronic funds transfer.

Opening Advertising Campaign'"4

Not less than $5,000

Within 60 days after your Business opens

We will advise you on materials and media to use in conducting your Opening Advertising Campaign. This money will be paid to third parties and you will send us copies of the receipts from them to document your opening advertising campaign.

Renewal Fee1

25% of the then-current Franchise Fee

Upon signing successor Franchise Agreement

Fee is payable upon execution of successor agreement.

Transfer Fee'



consummation of transfer

You must obtain our prior written consent to any transfer.

Audit Costs'

Cost of inspection or audit

As incurred

Payable only if you understate your Gross Billings by 2% or more

Initial Training Program Expenses4

Will vary under circumstances

As incurred

The initial training is included with your initial franchise fee, but you must pay for your travel, lodging and living expenses.


Name of Fee


Due Date


Additional Mandatory Training, Conventions, and Conferences1,

Costs associated with attending mandatory training sessions, conventions and other meetings

As incurred

We reserve the right to require your attendance at one annual convention and one regional conference per year. You will also be required to attend training in optional service programs we offer (if any) if you wish to offer those programs. We or a third party may charge a training fee for these sessions, and you must pay for your travel, lodging and living expenses.


Lesser of 12% per annum or highest rate allowed by law; with a minimum interest charge of $35 per instance, if permitted by law

As incurred

Begins to accrue the day after payments are due.

Royalty Report Late Fee1

$50 per late report

As incurred

We may assess this fee if you do not submit your Royalty reports within 10 days of the due date.

Background Checks

Will vary under the circumstances

As incurred

You must run background checks on all employees and independent contractors before hiring them, and annually thereafter.

Costs and Attorneys' Fees'

Will vary under the circumstances

As incurred

Payable if we are successful in a legal action or arbitration proceeding.


Will vary under the circumstances

As incurred

You have to reimburse us if we are held liable for claims arising from your HOMEWATCH CAREGIVERS Business operations.

Software Updates and Maintenance4

Annual upgrade for Generations is, as of the date of this Offering Circular, S600, and for other software it varies under circumstances

As incurred

For Generations scheduling software and other programs. Paid to third party suppliers. You must update software periodically and you may wish to obtain technical support from a third party.

Electronic Commerce, Maintenance and Automated Backups'

$100 a month as of the date of this Offering Circular, but subject to change as costs change.

Option to pay monthly or annually

You must pay for and participate in these communication requirements. These fees are paid to HIL5

Fees and costs imposed and payable to us. All of these fees and costs are nonrefundable.

"Gross Billings" are all amounts billed by you as a result of any and all services provided at, through, or in connection with, your HOMEWATCH CAREGIVERS Business, excluding sale's taxes, but including all amounts received by you even if you have contracted out with third parties to provide certain of the authorized services to your customers.


This amount is not paid to us, but must be spent by you. However, we have the right to establish a regional advertising cooperative for an area that includes your Territory and/or Second Territory, if applicable. In that situation, all or a part of this amount, as determined by the advertising cooperative, must be paid by you to that advertising cooperative. See Item 11.

Fees and costs payable to third parties. All of these are nonrefundable.

As of the date of this Offering Circular, we provide you with pages on our Website and two electronic mail addresses. If you choose to have additional pages or electronic mail addresses, you will pay us more for those items.






When Due

Method of Payment

Whether Refundable

To Whom Payment


To Be Made

Initial Franchise Fee per Territory (See Note I)



On signing of Franchise Agreement

Lump sum



Rent (See Note 2)



As incurred

As agreed


Other Suppliers

Initial Telephone System Costs - installation of 2 lines (See Note 3)



As incurred

As agreed


Other Suppliers

Training Expenses (See Note 4)



As incurred

As agreed


Other Suppliers

Office Equipment and Computer Hardware (see note 5)



As incurred

As agreed


Other Suppliers and business partners

Computer Software (See Note 5)



As incurred

As agreed


Other Suppliers and HII

Laptop Computer



As incurred

As incurred


Other Suppliers

Franchisee Internet Web Site, Intranet and E-mail Address Set Up (See Note 5)



Before Starting Business

As agreed



Office Internet Connection With DSL, T-l or Wireless Service See Note 5)



Before Starting Business

As Agreed


Your local service provider

Insurance, Liability and


(See Note 6)



Before Starting Business

As agreed


Other Suppliers





When Due

Method of Payment

Whether Refundable

To Whom Payment


To Be Made

Opening Advertising


(See Note 7)



Within 60 days of starting Business

As agreed


Other Suppliers

Additional Funds for 6


(See Note 8)



As incurred

As agreed


Other Suppliers




Explanatory Notes

Note 1. Initial Franchise Fee. The initial franchise fee is $28,500 for a Territory containing a minimum of 30,000 persons 65 years of age or older. A Second Territory may be awarded for an initial franchise fee of $20,000 for a Territory containing a minimum of 30,000 persons 65 years of age or older. The initial franchise fee will be increased or decreased for a Territory or Second Territory containing more than 35,000 or less than 30,000 persons age 65 or older. See Item 5. The "High" amount assumes two Territories with 30,000 persons age 65 or older. The "low" amount assumes one Territory of that size. The initial franchise fee includes, without additional charge, an initial supply of printed materials including ad slicks, brochures, forms and our initial marketing package containing specifications for signs, uniforms and forms.

Note 2. Rent. You must rent commercial office space within six months after you complete the initial training program. Your office space may be examined by us and it must meet our standards as described in the Operations Manual. Lease costs may vary significantly depending on the geographic location of your HOMEWATCH CAREGIVERS Business. The high-end figure in the chart estimates only one month's rental in an office building for approximately 400 to 600 square feet of office space that does not require leasehold improvements. If you choose to rent unimproved office space, the cost for leasehold improvements may include partitions, paneling, carpeting, electrical wiring, painting, plumbing and storage shelving. The cost of leasehold improvements may vary substantially from location to location.

Note 3. Initial Telephone System Costs. These are the costs associated with installation and set-up of your telephone system. You must have a minimum of two dedicated HOMEWATCH CAREGIVERS Business telephone lines and a live person answering your phone number at all times during regular business hours. In addition, you must have an answering system capable of sending recorded messages to a cell phone or pager, 24 hours a day, seven days a week. You must have one person on call 24 hours a day to return urgent phone messages. Your telephone system must be capable of being rolled to a pager or cell phone, and must also be able to handle conference calls.

Note 4. Training Expenses. Tuition for up to three individuals attending our initial training program is included in your initial franchise fee. You are responsible for all travel, lodging and living expenses associated with attendance at the initial training program and other training programs. We provide four box lunches and one dinner at a restaurant during the initial training program.


Note 5. Office Equipment and Computer Hardware and Software. You must purchase a Microsoft compatible computer and specified software. We also require you to have a cellular phone for your Business, a fax machine and a copy machine. You are required to have either a DSL, T-1 or wireless Internet connections installed at your office location. See Items 8 and 11 for more information about the software you are required to purchase. You are required to bring a laptop computer to the initial training program.

Note 6. Insurance, Liability and Bonding. It is your responsibility to obtain and provide to us proof of insurance and maintain the following insurance coverage: (i) comprehensive general liability and professional liability insurance for the Licensed Location and the Business with an initial limit of not less than $1,000,000 combined single limit; (ii) bonding of your caregiver employees or independent contractors, and employees with accounting or bookkeeping duties, in the. amount of $10,000 per employee or independent contractor; (iii) automobile liability insurance covering all employees with authority to operate a motor vehicle in an amount not less than $1,000,000; (iv) unemployment and workers' compensation insurance with a broad form all-states endorsement coverage sufficient to meet the requirements of applicable law; and (v) all-risk personal property insurance in an amount equal to at least 90% of the replacement costs of the contents and tenant improvements located at the Licensed Location. As soon as you achieve annualized Gross Billings of $1,500,000 or more, your minimum coverage requirement for comprehensive general liability and professional liability insurance will be $2,000,000 combined single limit. The required policies of insurance must list us, HII, as an additional insured and provide for 30 days advance written notice to us of cancellation. The cost of the insurance premium will vary depending on the location and size of your Business premises and the number of employees. The cost of the insurance premium may also change periodically due to changes in insurance rates.

Note 7. Opening Advertising Campaign. You are required to spend a minimum of $5,000 on an opening advertising campaign to promote and market the HOMEWATCH CAREGIVERS Services provided by your Business. These expenditures are in addition to Local Advertising expenditures. See Item 11. We encourage you to implement a JumpStart Marketing program as outlined in our Operations Manuals. Our staff will help you design and implement this initial advertising campaign. See Item 11.

Note 8. Additional Funds. This amount is an estimate of your pre-operational expenses that are not listed above, as well as estimated additional funds necessary for the first six months of your Business operations. These expenses include payroll costs, including costs for an operations and/or marketing position, but do not include any draw or salary for you. This estimate also includes amounts incurred for taxes, royalties and other operational expenses. These figures are estimates and we cannot guarantee that you will not have additional expenses starting the Business. Your costs will depend on factors such as: how much you follow our methods and procedures; your management skills; experience and business acumen; local economic conditions; the local market for our services; the prevailing wage rate; competition; and the sales level reached during this initial period. You may incur expenses in connection with the establishment of telephone, telephone answering service, and Internet service related costs. You may also incur expenses for business license fees, legal fees, and accounting fees. These expenses vary substantially from location to location.

Note 9. Total Investment. We relied on our principals' more than two decades in the home services business to compile these estimates. These estimates do not include any salary or draw for you. You should review these figures carefully with a business advisor before making any decision to purchase the franchise. We do not offer financing directly or indirectly for any part of the initial investment.




Your HOMEWATCH CAREGIVERS Business must be established and operated in compliance with your Franchise Agreement. You must purchase or lease equipment, products, services and supplies used at or offered through your Business in compliance with the standards and specifications contained in the materials we provide to you. These materials consist of one or more manuals, technical bulletins or other written materials (we refer to all manuals and other written materials as our "Operations Manuals"), which we may modify. Our standards and specifications may include standards for performance, design, use of our Marks, quality, appearance, and standards for compliance with local regulations. You may purchase or lease original and replacement equipment, products, supplies and services meeting our specifications from any approved source. After signing the Franchise Agreement and upon reasonable request by you, we will make available to you a list of presently approved suppliers and vendors.

We are currently an approved vendor of various supplies and computer software you will use in your HOMEWATCH CAREGIVERS Business, including: (t) grand opening advertising and promotional materials; (2) initial marketing package; (3) invoices; (4) business forms; (5) software package, described in Item 11; and (6) other advertising materials. These supplies and software may be obtained from other approved suppliers if they meet minimum standards and specifications established by us. You must also purchase other specified software from third party vendors. See Items 7 and 11. The cost of supplies, software, equipment and all other items purchased in accordance with our standards and specifications represents 5% to 15% of your total purchases in connection with the establishment of your HOMEWATCH CAREGIVERS Business, and 5% to 10% of your overall purchases in operating your HOMEWATCH CAREGIVERS Business after it has been established. If you choose not to accept any of the supplies and equipment that are provided to you free of charge upon payment of the initial franchise fee, you will not be entitled to any reduction or off-set in the initial franchise fee. For the year ended December 31, 2005, we derived $74,038 or 2.5% of our total revenues of $2,989,359 from purchases by franchisees.

If you propose to purchase or lease any equipment, products, supplies or services not previously approved by us as meeting our specifications, you must first notify us in writing requesting our approval. We will notify you of our approval or rejection of the proposed supplier within 30 days after our receipt of your request. We may withhold approval of the proposed supplier for any reason; however, we will not unreasonably withhold our approval of a supplier of your choosing if the supplier meets our standards and specifications regarding the items to be supplied to you. We may require submission of sufficient specifications, information, or samples to determine whether the items meet our standards and specifications. Our criteria for approving suppliers will not be made available by us for you to review.

We have a Internet-based store for our franchisees that started in January 2003 selling select promotional items used in your Business, but all purchases from this store are voluntary. Although not obligated to do so, we may negotiate purchase arrangements with suppliers for the benefit of our franchisees. We did not receive any monies in 2005, but we reserve the right to receive rebates, incentives or overrides by third party suppliers from whom you buy items. You do not receive a material benefit from us based on your use of any particular designated or approved source.

All marketing and promotion of your Business must conform to our standards and specifications. At least 10 days before you use them, you must submit for our approval all advertising materials; including materials posted on the Internet, not prepared or previously approved by us.


You must purchase and maintain certain types and coverages of insurance for your HOMEWATCH CAREGIVERS Business. See Items 7 and 9 of this Offering Circular. If you fail to purchase this insurance, we may demand that you cease operations, or we may obtain insurance for you and you must reimburse us for the cost of insurance. We reserve the right to require you to change the type of insurance you are required to maintain and upon 60 days prior written notice to you, revise the required coverage limits.





Section in Franchise Agreement

Item in Offering Circular

(a) Site selection and acquisition/lease

Sections 1.3 and 5.2 of Franchise Agreement

Items 7 and 11

(b) Pre-opening purchases/leases

Sections 5.2 and 5.12

Item 7

(c) Site development and other pre-opening requirements

Sections 5.2, 5.3, and 5.12

Items 7 and 11

(d) Initial and ongoing training

Sections 5.1 and 5.10

Item 11

(e) Opening

Sections 3.5 and 5.3

Item 11

(0 Fees

Article 2 and Sections 3.2, 3.4, and 5.12

Items 5, 6 and 7

(g) Compliance with standards and policies/Operations Manuals

Sections 5.3, 5.4, 5.6, and 5.8

Items 11 and 14

(h) Trademarks and proprietary information

Sections 5.4, Article 7 and Section 10.3

Items 13 and 14

(i) Restrictions on products/services offered

Sections 5.3, 5.8, and 5.9

Item 16

(j) Warranty and customer service requirements

Section 5.8 (only customer service requirements)


(k) Territorial development and sales quotas

Sections 5,3 and 5.8

Item 12

(1) On-going product/service purchases


Item 8

(m) Maintenance, appearance and remodeling requirements

Sections 5.7 and 11.1

Item 8

(n) Insurance

Section 5.11

Items 7 and 8

(o) Advertising

Article 3

Items 6 and 11

(p) Indemnification

Section 6.2

Item 6

(q) Owner's participation/management/ staffing

Sections 5.8 and 5.9

Item 15



Section in Franchise Agreement

Item in Offering Circular

(r) Records/reports

Sections 2.3, 3.1 and 5.5

Item 6

(s) Inspections/audits

Sections 5.3 and 5.5

Item 6

(t) Transfer

Article 9

Item 17

(u) Renewal

Article 11

Item 17

(v) Post-termination obligations

Sections 8.7 and 10.2

Item 17

(w) Non-competition covenants

Article 10

Item 17

(x) Dispute resolution

Articles 12 and 13

Item 17



Neither we nor any agent or affiliate currently offers direct or indirect financing. We do not guarantee your notes, leases or other obligations. We are unable to estimate whether you will be able to obtain financing for any part or all of your investment and, if so, the terms of such financing.


Except as listed below, we need not provide any assistance to you. Pre-Opening Assistance.

Before you open your Business, we will do the following:

1.          Advise you in becoming licensed if your state requires licensing, and in the selection of and contracting with suppliers of equipment, supplies and other items (Section 4.1(a), Franchise Agreement).

2.          Loan you one copy of our confidential and proprietary Operations Manuals covering operating techniques, standards and specifications for products and services, administration, operations and methods of doing business; including all updates and revisions (Section 4.1(b), Franchise Agreement). The Operations Manuals have a total of 374 pages. The Tables of Contents for the Operations Manuals are attached to this Offering Circular as Exhibit H.

3.          Train up to three people for five days at our principal offices in Denver, Colorado or another location selected by us (Section 4.1(c), Franchise Agreement).

4.          Provide to you assistance, orientation and advice via teleconferences, faxes, electronic mail or by sending our representative to meet with you regarding your opening advertising campaign and


related issues during the period beginning eight weeks before through eight weeks after the initial training program. (Section 4.1(d), Franchise Agreement).

5.          Provide to you a 52-week business plan with steps for you to take each week to build your business, and 12-month pro forma financial statement to assist you in managing the financial aspects of the business.

6.          Provide to you the Franchise Literatureflmage Package described in Exhibit IV of the Franchise Agreement.

Ongoing Assistance.

During the operation of your Business, we will do the following:

1.          Upon your reasonable request, consult with you by telephone or electronic mail regarding the continued operation and management of your HOMEWATCH CAREGIVERS Business (Section 4.2(a), Franchise Agreement).

2.          Provide you with news and updates through electronic mail containing information regarding the industry and the HOMEWATCH CAREGIVERS Business (Section 4.2(b), Franchise Agreement).

3.          Periodically make advertising and promotional materials available to you, either free of charge or at a price that covers our costs, at our option (Section 4.2(c), Franchise Agreement);

4.          Refer you to prospective clients in or near your Territory who contact us seeking information regarding the HOMEWATCH CAREGIVERS services (Section 4.2(d), Franchise Agreement).

5.          During the first 180 days after your Business opens, provide, on a one-time-only basis, a staff person to visit your Business for up to three days to provide operational assistance, including assistance in marketing, public relations, account development, your Opening Advertising Campaign, and other operations assistance. You will pay for all advertising materials and supplies (Section 4.2(e), Franchise Agreement).

6.          Provide a life-time training guarantee (LTG) for your new office staff members if you want them to attend all or a part of our regularly-scheduled training program at any time during the initial term of your Franchise Agreement (Section 4.1(c), Franchise Agreement).

7.          Provide various products and/or services as we may make them available to you from time to time, in our sole discretion; for example, our current offerings include a franchise owner mentor program, orientation and training tapes, PowerPoint presentations for CareGivers, access to databases from which you may obtain referrals to prospective clients, and Internet-related services including Web pages and two electronic mail addresses. These are examples of products and services we currently offer to you, but we are not obligated to continue to offer any of them, in our sole discretion (Section 4.2(f), Franchise Agreement).

8.          If you desire additional assistance more than 180 days after your Business opens, we will on one or more occasions, as we deem reasonable, send a representative to visit your HOMEWATCH CAREGIVERS Business and provide assistance. Before the visit, HII may determine, at its option, to


require you to pay a daily fee for our services, in addition to expenses, for the additional assistance (Section 4.3, Franchise Agreement-Advertising Programs.

National Advertising Fee. You must pay to us a fee as specified in Item 6 ("National Advertising Fee") for advertising for the HOMEWATCH CAREGIVERS system. All company-owned Businesses are required to pay National Advertising Fees on an equal percentage basis with all franchised Businesses. The National Advertising Fee is placed in a segregated account ("Advertising Account"). We will not use the Advertising Account to solicit franchisees. Any interest that is earned from this account will become part of the Advertising Account. Upon your request, we will provide to you twice during the calendar year, no later than March 1 and September 1 of each year, an unaudited financial statement for the funds in the Advertising Account for the previous two quarters.

The Advertising Account will be administered by HII in its sole discretion, but in consultation with the HII Franchise Advisory Council (if the Council is in existence) for all advertising expenditures reasonably intended to benefit HOMEWATCH CAREGIVERS Businesses. HII may reimburse itself and its representatives from the Advertising Account for the payment of costs related to administering the Advertising Account; such as reasonable salaries, administrative costs, travel expenses and overhead we may incur in fulfilling activities related to the administration of the Advertising Account, subject to a maximum amount per year of 15% of the cost of the advertising programs. The Advertising Account may be used for creation, production (either through an advertising agency or in-house), or media placement of advertising materials; and these materials may be disseminated through television, radio, print, the Internet or any other media we deem appropriate, in our sole discretion. Any amounts that remain in the Advertising Account at the end of each year will accrue and we will apply them toward next year's expenses. We make no guarantee to you or to any other franchisee that expenditures from the Advertising Account will benefit you or any other franchisee directly or on a pro rata basis. We are not required to spend any money in the Advertising Account in, or for the benefit of, your Territory. We will assume no other direct or indirect liability or obligation to you with respect to collecting amounts due to any Advertising Account or with respect to maintaining, directing or administering any Advertising Account.

The National Advertising Fee will be in addition to, and not in lieu of, your expenditures for local advertising described below. The National Advertising Fee may, in our discretion, be allocated back to a regional advertising cooperative, as described below. We reserve the right to require you to pay National Advertising Fees by electronic funds transfer from your bank account. This transfer is a separate transfer from that made for your Royalty payment.

We have not collected the National Advertising Fee prior to 2006.

Local Advertising Expenditure. You must spend no less than 4% of the monthly Gross Billlings of your HOMEWATCH CAREGIVERS Business, on average each month, for local advertising in your Territory. You will spend these amounts for approved advertising and you must submit a report, in the form specified by HII, on or before the 15th day of each month, showing the amount spent on local advertising during the previous month. If requested by HII, you must also submit to HII documentation, in the form specified by HII, of amounts spent. You are responsible for the placement of all local advertising. The advertising and promotion of your Business in accordance with our standards and specifications regarding advertising is an essential aspect of the Licensed Methods, and you must comply with all of our advertising standards and specifications. We require you to list and advertise your HOMEWATCH CAREGIVERS. Business in the manner prescribed by us in the principal regular (white


The original documents were scanned as an image. The original file can be downloaded at the link above.