How does Caring Senior Service collect the Royalty Fee and other amounts due?
Caring_Senior_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
Royalty Fee
You agree to pay us a non-refundable royalty ("Royalty Fee") equal to five percent (5%) of your Gross Billings or the Minimum Royalty Fee, whichever amount is higher, payable every two (2) weeks as described in subparagraph (c) below.
- (a) As used herein, the term "Minimum Royalty Fee" equals $150 for each two-week period in which Gross Billings are calculated during your first six months of operation and, afterwards, 5% of the applicable Gross Billings Target for each two-week period in which Gross Billings are calculated and as set forth in Section 9.3.
- (b) As used herein, the term "Gross Billings" means all amounts clients are obligated to pay in connection with the sale of products and services related to the Franchised Business (including all amounts invoiced to clients), regardless of collection, less any sales taxes or taxes collected by you from your clients for transmittal to the appropriate taxing authority and authorized discounts, plus business interruption insurance proceeds.
- (c) We will collect the Royalty Fee, and any other amounts due to us or our affiliate under this Agreement, by deducting such amounts from your operating account via electronic funds transfer on the second Friday following completion of the previous two (2) week period for which Gross Billings and Royalty Fees are calculated. In the event the Royalty due date is not a business day, we will debit your account on the next business day. You shall establish an arrangement for electronic funds transfer or deposit of any payments required under this Agreement. You shall execute our current form of "Authorization Agreement for Prearranged Payments (Direct Debits)," a copy of which is attached to this Agreement as
Exhibit H, or any other forms required by us, our bank and/or your bank, and you shall comply with the payment and reporting procedures specified by us in the Confidential Operations Manual. You expressly acknowledge and agree that your obligations for the full and timely payment of Royalty Fees and Marketing Fees (and all other amounts provided for in this Agreement) shall be absolute, unconditional, and fully earned. You shall not for any reason delay or withhold the payment of all or any part of those or any other payments due hereunder, put the same in escrow or set-off same against any claims or alleged claims you may allege against us or others. You shall not, on grounds of any alleged non-performance by us or others, withhold payment of any fee, including without limitation Royalty Fees or Marketing Fees, nor withhold or delay submission of any reports due hereunder.
- (d) You agree that sufficient funds will be made available in your account for withdrawal.
- (e) If we are unable to access your Gross Billings, or if we permit you to report your Gross Billings and you do not submit such report, for your Caring Senior Service Business, we may debit your account for one hundred twenty percent (120%) of the Royalty Fee and Marketing Fees that we most recently debited. If the Royalty Fee and Marketing Fee we debit are less than the Royalty Fee and Marketing Fee you actually owe us, once we have been able to determine your true and correct Gross Billings, we will debit your account for the balance on a day we specify. If the Royalty Fee and Marketing Fee we debit are greater than the Royalty Fee and Marketing Fee you actually owe us, we will credit the excess against the amount we otherwise would debit from your account during the following period.
5.3 Marketing Fee
You must pay to us a marketing fee ("Marketing Fee") equal to 2% of Gross Billings. In consideration for the Marketing Fee, we will provide such advertising, marketing, and promotional services as we deem appropriate. Marketing Fees are payable at the same time and in the same manner as the Royalty Fee described above.
5.4 Technology Fee
You shall pay to us a non-refundable monthly Technology Fee, currently equal to One Thousand Forty Five Dollars ($1,045) per month but which we reserve the right to increase on written notice to you ("Technology Fee"). The Technology Fee is payable to us on the second Friday following completion of the two (2) week period in which Gross Billings and Royalty Fees are calculated that includes the 1st day of the month by electronic funds transfer, or such other method we designate. If the scheduled software lease payment due date is not a business day, then payment shall be due on the next business day.
Source: Item 23 — RECEIPTS (FDD pages 53–204)
What This Means (2025 FDD)
According to Caring Senior Service's 2025 Franchise Disclosure Document, the Royalty Fee, Marketing Fee, and Technology Fee are collected via electronic funds transfer from the franchisee's operating account. Specifically, Caring Senior Service will deduct these amounts on the second Friday following the completion of the two-week period for which Gross Billings and Royalty Fees are calculated. If this Friday is not a business day, the deduction will occur on the next business day. The franchisee is required to establish an arrangement for electronic funds transfer and must complete the "Authorization Agreement for Prearranged Payments (Direct Debits)" form. The royalty fee is 5% of gross billings or the minimum royalty fee, whichever is higher. The marketing fee is 2% of gross billings. The technology fee is currently $1,045 per month.
Caring Senior Service requires franchisees to ensure sufficient funds are available in their account for these withdrawals. If Caring Senior Service is unable to access the franchisee's Gross Billings, or if the franchisee fails to report them, Caring Senior Service may debit the account for 120% of the most recently debited Royalty and Marketing Fees. If this debit is less than what is actually owed, Caring Senior Service will debit the account for the remaining balance once the true Gross Billings are determined. Conversely, if the debit exceeds the amount owed, the excess will be credited against the subsequent period's debit.
The FDD emphasizes that the franchisee's obligation to pay Royalty Fees and Marketing Fees is absolute and unconditional. Franchisees are prohibited from delaying or withholding payments, placing funds in escrow, or offsetting payments against alleged claims against Caring Senior Service. Failure to make timely payments can result in interest charges of the lesser of 1.5% per month or the highest rate permitted by law, accruing from the due date until the payment is received. Furthermore, any failure to pay fees when due constitutes a material breach of the Franchise Agreement, potentially leading to termination.