Franchise Operations & Standards

Overview

TheKey (formerly Home Care Assistance / HCA) operates a franchise network spanning the United States, Canada, and Australia. Franchisees license the brand, receive business coaching and operational support, and pay royalties to the franchisor in exchange for exclusive territorial rights. Managing this network — including royalty collection, brand standards enforcement, franchisee satisfaction, and compliance — is central to TheKey's revenue and brand integrity. The franchise model has evolved significantly over the company's history, with ongoing tension between corporate standardization and franchisee autonomy.

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Key People

• Michele Boehmer — Head of Franchise Support; handles royalty reporting, franchisee communications, and office closure issues, including recovery of outstanding royalties.
• Russell Gesher — Managed Canadian royalty withholding compliance and tax filing requirements (2016–2017).
• James Patchett — Director of Franchise Development; involved in territory tools (Fract platform) and ACH setup.
• Tim / Timothy Thomas — Long-tenured franchisee (Canadian operator); vocal on franchisee relations, brand changes, and royalty relief; active in Franchise Advisory Council.
• Dennis Fancy — Corporate contact addressing brand standards and operational questions (e.g., uniforms).
• Barbara Schuh — Corporate liaison; communicated royalty relief decisions to franchisees during COVID-19.
• Mike Schantz — Senior executive; set policy denying royalty relief on acquisitions (2020).
• Laszlo Kovacs — Treasury/finance contact managing Canadian franchise royalty payment processing.
• Kartik Sheth — Finance operations; responsible for executing payment processor transitions for Canadian royalty payments.
• Brady Murphy — Regional Director role covering worldwide franchisor/franchisee-based territories, primarily USA.
• Dane Johnson — Involved in 2025 franchise sale/transition discussions, including potential conversion to franchisee structure.
• Kate Goodrich, eclark@thekey.com, marykatherine.cope@thekey.com — Involved in Canadian royalty payment processor migration discussions (2024).

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Processes & Policies

Royalty Structure

• Standard royalty rate: 5% of revenue, paid monthly by franchisees to the franchisor. [Re: TheKey-KPMG Canadian TP discussion — 2025-09-11 — Michael Jichetti]
• Canadian franchisees are subject to a 10% royalty withholding for tax purposes, with proof of tax filings required annually. [2016 Royalty Withholding — 2017-01-24 — Russell Gesher]
• Royalty reports detail gross payments, gross expenses deducted, and net payments; distributed to franchisees upon request. [Royalty Report — 2015-08-11 — Michele Boehmer]
• Canadian royalties are paid monthly via ACH (as of 2024, three Canadian franchise offices). [Re: Confirmation of Reserve Balance — 2024-06-18 — Kartik Sheth]

Royalty Payment Processing (Canada)

• Previously processed through Accept Pay Global.
• A migration to Chase Paymentech was under active consideration in 2024, requiring steps to be executed by Kartik. [RE: FW: EFT Canada — 2024-04-10 — Laszlo Kovacs]

Brand Standards & Compliance

• The Home Care Assistance Brand Standards Manual (updated 2018) governs franchisee insurance requirements, site operations, and efficiency reviews; an explicit Site Efficiency Reviews section was added. [Fwd: Updated HCA Brand Standards Manual — 2018-06-07 — Tim Thomas]
• Uniform decisions fall under the "each franchise is independently owned and operated" principle — corporate does not mandate specific uniforms. [Re: Uniforms — 2018-10-30 — Dennis Fancy]
• Franchisee acknowledgment agreements must be signed and filed with Russell for any major policy updates. [Important: New Employment Agreements — 2016-03-23 — HCA News and Updates]

Franchise Advisory Council (FAC)

• Consists of 6 franchisees plus HCA Franchise management staff.
• Three seats rotate at the end of each year; elections held among the franchisee network. [Re: Franchise Advisory Council Open Seats — 2018-09-10 — Timothy Thomas]
• FAC focuses on sharing ideas, best practices, and serving as a communication channel between franchisees and corporate.

Performance Incentives

• Franchisees who surpass stretch revenue goals receive a 50% royalty reduction for the remainder of the year after hitting that goal. [Franchise Team January Updates — 2017-01-23 — HCA News and Updates]

Office Closure / Franchisee Exit

• Upon closure, TheKey may absorb the franchisee's client base without purchasing clients outright, offsetting outstanding royalties against revenue absorbed. [Re: 344 Lutgarda Mariano — 2025-04-07 — Michele Boehmer]
• Exit diligence includes review of franchise agreement obligations, de-branding requirements, and any ongoing royalty obligations. [Diligence_Requests_TheKey_of_Kansas_LLC.txt]

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Timeline & Key Events

| Date | Event |

|------|-------|

| 2015-08 | Royalty report format established; being distributed to franchisees on request. |

| 2016-03 | New employment agreement acknowledgments required from all franchise owners; deadline April 4, 2016. |

| 2016-10 | Annual Franchise Business Review franchisee satisfaction survey launched. |

| 2016-12 | 21 new territories added in 2016; 11 sites closed or transferred. Australia reached 9 franchises (5 added). |

| 2017-01 | Canadian offices required to file proof of 10% royalty withholdings for 2016. |

| 2017-08 | Monthly focus strategy webinars established for USA, Canada, and Australia franchisees. |

| 2018-06 | Brand Standards Manual updated; insurance requirements revised to match current franchise agreement. Site Efficiency Reviews section added. |

| 2019-05–06 | Corporate logo change made without consulting franchise network; significant franchisee discontent; FAC and corporate communication breakdown noted. |

| 2019-09 | FAC election cycle; three seats up at end of 2019. |

| 2020-03 | COVID-19 prompts franchisee requests for royalty relief; corporate (Mike Schantz) denies relief on acquisitions. |

| 2024-04 | Canadian royalty payment processor migration from Accept Pay Global to Chase Paymentech under discussion. |

| 2024-06 | Confirmed three Canadian franchise offices paying monthly royalties via ACH. |

| 2025-04 | Vancouver BC office (Lutgarda Mariano) closed; $39K in outstanding royalties; TheKey absorbed $120K/month in client revenue. |

| 2025-09 | Two Canadian franchisees (Alberta and Ontario) confirmed operating under traditional franchise agreements at 5% royalty. Separate NDA/sale discussions reference potential new franchisee arrangements. |

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Key Decisions

• Royalty relief denied during COVID-19 for acquisitions; Barbara Schuh communicated Mike Schantz's blanket denial in February 2020. [Re: Acquisition — 2020-02-05 — Barbara Schuh]
• Logo/brand change (2019) executed without franchisee network consultation, explicitly breaking the established franchisor–franchisee relationship norms and generating broad discontent. [Fwd: Brand Update — 2019-05-31 — Tim Thomas]
• Canada payment processor migration to Chase Paymentech not yet finalized as of April 2024; decision pending on whether to proceed.
• Vancouver closure (2025): Corporate elected not to purchase client book outright, instead absorbing revenue to offset royalty debt rather than pursuing full collection.
• Territory sub-division explored by Timothy Thomas in 2017; implications under the franchise agreement discussed with corporate.

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Open Questions & Gaps

1. Chase Paymentech migration: Was the Canadian royalty payment processor migration completed, or is Accept Pay Global still in use? No confirmation of resolution in available records.

2. Royalty relief policy: No documented formal policy on when relief is or is not granted — decisions appear ad hoc (denied for acquisitions in 2020; requested but outcome unclear during COVID-19 for general operations).

3. Canadian franchisee count discrepancy: 2025 KPMG discussions reference two Canadian franchisees (Alberta, Ontario), while June 2024 emails reference three offices paying via ACH. The Vancouver closure (April 2025) may explain this, but should be confirmed.

4. FAC structure post-2019: No evidence of FAC election outcomes or whether the council remained active post-rebrand to TheKey.

5. Australian franchise operations: Referenced as having 9 locations in 2016; no subsequent updates on current status.

6. Territory valuation methodology: Timothy Thomas flagged in 2019 that head office territory valuations were "completely bogus" relative to market; no documented resolution.

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Related Topics

• Royalty Reporting & Financial Compliance
• Canadian Operations & Tax Compliance
• Brand Standards & Rebranding (HCA → TheKey)
• Franchise Advisory Council
• Territory Management & Development