Top 250 Franchise by Entrepreneur – Rank no.21 – Miracle-Ear Inc. – US
Products & Services: Hearing instruments
Number of Locations: 1,299
Total Investment: $119K – 287.5K
Began Franchising: 1983
About Miracle-Ear Inc.
Kenneth Dahlberg started Dahlberg Electronics in 1948 and began manufacturing the first Miracle-Ear hearing aids. Today, Miracle-Ear is a subsidiary of Italian hearing aid distributor Amplifon, with U.S. headquarters in Plymouth, Minnesota. Miracle-Ear’s retail locations offer free hearing tests and consultations and offer service, warranty and after-care packages with their hearing aids.
Startup Costs, Ongoing Fees and Financing
Franchise Fee: $20,000
Ongoing Royalty Fee: $48.80/aid
Term of Franchise Agreement: 5 years, renewable
Liquid Cash Available: $25,000
80% of all franchisees own more than one unit. Number of employees needed to run franchised unit: 2. Absentee ownership of franchise is NOT allowed..
|FINANCING TYPE||IN-HOUSE||THIRD PARTY|
How This Franchise Supports Franchisees
Franchise Ranking History
Miracle-Ear, Inc. (“Miracle-Ear”) is a network of retail outlets that distribute hearing aids manufactured by M-E Manufacturing and Services Inc. (“MEMSI”), a subsidiary of Siemens Medical Solutions. Miracle-Ear is a subsidiary of Amplifon S.p. A, a worldwide distributor of hearing aids based in Italy.
The US Headquarters of Amplifon is located in Plymouth, Minnesota
Miracle-Ear offers free audiometric hearing tests and consultations at their retail outlets, but explicitly states on its website that these tests are “not a medical exam,” and that the purpose of the exam is to determine the best hearing aid amplification settings. Miracle-Ear tests and hearing aid fittings are generally performed by a “hearing instrument specialist,” not an audiologist. The Food and Drug Administration (FDA) does, however, regulate hearing aids in the United States.
The “Miracle-Ear” began as a hearing aid manufactured by Dahlberg, Inc., an electronics company founded in 1948 by Kenneth Dahlberg after he left a position as assistant to the president of Telex, another manufacturer of hearing aids. By 1959, Miracle-Ear had evolved into a subsidiary of Dahlberg, Inc. with USD 100 million in annual revenues. Dahlberg sold Miracle-Ear to Motorola, Inc. in 1959, and subsequently reacquired it in 1964.
In 1994 Dahlberg once again sold Miracle Ear to Bausch & Lomb for USD 139 million. The sale took place after Dahlberg, Inc. paid a USD 2.75 million civil penalty to settle Federal Trade Commission (FTC) charges that the company made numerous false and unsubstantiated claims for its Miracle-Ear “Clarifier,” a “noise-suppression” hearing aid, in violation of a 1976 FTC order. The national advertising campaign challenged by the FTC ran from 1988 until mid-1993.
Amplifon S.p.A. acquired Dahlberg, Inc. from Bausch & Lomb in August 1999 for USD 22 million. In December 1999 Dahlberg, Inc. and its subsidiary Miracle-Ear, Inc. merged into Miracle-Ear, Inc. At the time of the acquisition Miracle-Ear manufactured, distributed, and fitted hearing aids at 1,000 retail locations, 149 of which were operated directly by the company, and 851 of which were run by franchisees. As of March 2011, Miracle-Ear had more than 1,200 locations in the United States, which include many in Sears.
In 2000 Amplifon sold the manufacturing business of Miracle-Ear, Inc. to MEMSI, a Siemens company, for approximately USD 3.9 million. Upon disposing of its manufacturing business, Miracle-Ear entered into an exclusive ten-year agreement with MEMSI for the supply of hearing aids.
As a result of the agreement with MEMSI Miracle-Ear began selling rebranded Siemens hearing aids and hearing aid accessories. For example, the Miracle-Ear “ME 1000” is available from Siemens as the “Pure 700,” and the Miracle-Ear “MEBluConnect” is available from Siemens as the “Tek Bluetooth Wireless Hearing Aid Remote Control System.” Similarly, Beltone Hearing Aids is a division of and sells hearings manufactured by Denmark-based GN Resound A/S, which also owns the Resound, Interton, and Otometrics brands.