Miracle Ear Inc Case Study

Noah Jaffe

Jeff Miller

BMGT 110

September 29, 2016

Miracle-Ear Inc.

Consumers are too picky when it comes to fast food so if I can only buy one store front, why roll all my dice on food? Where to eat requires opinion and moods, but if you can’t hear, hearing aids are a must buy. Miracle Ear Inc. is ranked 44th in the top 500 franchises in 2016 and has fluctuated in ranks I the top 50 for the past 6 years.  The first Miracle-Ear hearing aids were manufactured in 1948 by Kenneth Dahlberg when he started Dahlberg Electronics. Today, Miracle-Ear is a competitor of the Italian hearing aid distributor Amplifon, with U.S. headquarters in Plymouth, Minnesota. Miracle-Ear's retail locations offer free hearing tests and consultations, warranty, and after-care packages with their hearing aids.

With my bank account emptied and $500,000 ready to invest with in a franchise, Miracle-Ear’s initial investment of fluctuating between $119,000 and $287,500 is right in my price range. I will also have the extra cash to cover the net-worth requirement of $75,000, the liquid cash requirement of $25,000. I am only faced with the initial franchise fee of $30,000, and the ongoing royalty fee of $48.80/aid with money to spare for my ideal location.

If one where looking for a large population of people who suffer from hearing loss where would they find them? Florida, but specifically Boca Raton. I would be targeting the demography of senior citizens as they would be the largest demography that would have hearing loss. I would be thrilled to open my Miracle-Ear in a popular shopping center Fifth Avenue Shops in Boca positioned strategically between a Publix and local hair salon. The lease would be in retail space 2210 costing $4800 a month and $57,600 my first year.

 According to the Hearing Loss Association of America, after the age of 65, one of three people have significant loss in hearing. In the city of Boca Raton there are currently 23,303 senior citizens over the age of 65. Statistically speaking at least 7,768 seniors currently have hearing loss. While hearing aids range from $1,500-$3,000 a unit, double that if you plan on hearing out of both ears. For augments sake say our senior citizens are feeling particularly cheap and they only want to $1,500 version of the Miracle-Ear hearing aid, if our 7,768 senior citizens purchase 2 units each, 15,536 units will be sold and Miracle-Ear will gross over $22,545,000. The amazing part is people keep getting older no matter what technology is available.

Senior citizens are not the only people affected by hearing loss. According to Amplifon Hearing Health Care, today 1 in 9 Americans are experiencing hearing loss and that number is on the rise. We are seeing more and more people with hearing aids and it seems as if they keep getting younger. All over the internet you can watch videos of babies hearing for the first time and watch their faces light up when their mom finally gets the hearing aid into the child’s ear. Putting this all into a business perspective, my Miracle-Ear should be busy.