How is the royalty fee determined for a Caring Senior Service conversion franchise?
Caring_Senior_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
| Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalties1 | 5% of Gross Billings2 or the Minimum Royalty Fee, whichever is greater. | Payable on the second Friday following completion of the two-week billing period | See Note 2 for our definition of "Gross Billings." Royalty Fees and other continuing fees are payable to us by Electronic Funds Transfer ("EFT"). The "Minimum Royalty Fee" amount 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 outlined in Item 12. |
| For conversion Franchised Businesses, | |||
| under the terms of a Conversion | |||
| Addendum, we will impose a lower Royalty | |||
| Fee amount and scale up to our standard | |||
| Royalty Fee, however, as the amount of | |||
| sales in the prior business impacts the | |||
| length and type of Royalty Fee scale | |||
| applicable, the interim Royalty Fee amounts | |||
| are determined on a case-by-case basis and | |||
| included in the Conversion Addendum. | |||
| Technology Fee | Currently, $1,045 per month | Payable monthly on the second Friday following completion of the two-week billing period that includes the 1st of the month. |
Source: Item 6 — OTHER FEES (FDD pages 12–17)
What This Means (2025 FDD)
According to Caring Senior Service's 2025 Franchise Disclosure Document, the royalty fee for conversion franchises is determined on a case-by-case basis and is outlined in the Conversion Addendum. For standard Caring Senior Service franchises, the royalty fee is 5% of Gross Billings or the Minimum Royalty Fee, whichever is greater. The Minimum Royalty Fee is $150 for each two-week period during the first six months of operation. After that, it becomes 5% of the applicable Gross Billings Target for each two-week period.
However, for conversion franchises, Caring Senior Service imposes a lower royalty fee initially, which then scales up to the standard royalty fee. The specific amount and scaling depend on the sales of the prior business. This means that the royalty fee structure for a conversion franchise is not standardized but is instead tailored to the individual franchisee's circumstances based on their existing business performance.
Prospective franchisees considering a conversion should carefully review the Conversion Addendum to understand the exact royalty fee structure that will apply to their specific situation. This addendum will detail the interim royalty fee amounts and the timeline for scaling up to the standard 5% royalty fee. Understanding these terms is crucial for accurately forecasting expenses and assessing the financial viability of the franchise.
It is important to note that "Gross Billings" includes all amounts clients are obligated to pay for products and services related to the Franchised Business, less any sales taxes or authorized discounts, plus business interruption insurance proceeds. Franchisees should also be aware that Caring Senior Service may debit their account for 120% of the Royalty Fee if they are unable to access the Gross Billings amount or if the franchisee does not submit their report.