Caring_Transitions 2025 Franchise FAQ - FDD Ninja

Question 1

What was the average Gross Profit % for Caring Transitions franchises between 2022 and 2024?

Accepted Answer

| Percentage of franchises that attained or surpassed Average Gross Receipts | 35% |
|---|---|
| Highest Gross Profit % | 100% |
| Average Gross Profit % | 67% |
| Median Gross Profit % | 67% |
| Lowest Gross Profit % | 13% |
| Percentage of franchisees that | 50% |
| attained or surpassed Average |  |
| Gross Profit % |  |
| # of Franchise Owners | 204 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)

Question 2

What was the average gross receipts for all Caring Transitions franchises for the year ending 12/31/2021?

Accepted Answer

| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| u. Dispute resolution by arbitration or mediation | 16.2 | Except for certain claims, all disputes must be arbitrated in Hamilton County, Ohio (subject to state law); claims may not be consolidated with claims of other franchisees; parties waive right to jury trial and punitive damages; except for certain claims, all claims must be brought within 1 year, subject to state law. |
| v. Choice of forum | 18.4 | Except for claims arising under a franchise law of the state where the franchised business is located, all litigation or arbitration must be in Hamilton County, Ohio, subject to state law. |
| w. Choice of law | 18.3 | Except for claims arising under a franchise law of the state where the franchised business is located, Ohio law applies, subject to state law. |
|  | Year Ending | Year Ending |
|  | 12/31/2021 | 12/31/2022 |
| Average Gross Receipts | $606,166.45 | $633,235.64 |
| Median Gross Receipts | $521,607.16 | $509,928.49 |
| Highest Gross Receipts | $2,571,645.75 | $2,714,401.00 |
| Lowest Gross Receipts | $395,912.76 | $390,847.70 |
| Percentage of franchisees that | 30% | 30% |
| attained or surpassed Average |  |  |
| Gross Receipts |  |  |
| Average Gross Profit % | 63% | 62% |
| Highest Gross Profit % | 97% | 96% |
| Median Gross Profit % | 64% | 62% |
| Lowest Gross Profit % | 27% | 17% |
| Percentage of franchisees that | 52% | 49% |
| attained or surpassed Average |  |  |
| Gross Profit % |  |  |
| # of Franchises | 46 | 53 |
|  | Year Ending | Year Ending |
|  | 12/31/2021 | 12/31/2022 |
| Average Gross Receipts | $306,361.73 | $311,961.78 |
| Median Range of Gross | $302,264,16 | $315,602.98 |
| Receipts |  |  |
| Highest Gross Receipts | $395,420.54 | $382,465.66 |
| Lowest Gross Receipts | $218,375.26 | $225,868.00 |
| Percentage of franchisees that | 48% | 49% |
| attained or surpassed Average |  |  |
| Gross Receipts |  |  |
| Average Gross Profit % | 56% | 54% |
| Highest Gross Profit % | 100% | 100% |
| Median Gross Profit % | 56% | 57% |
| Lowest Gross Profit % | 15% | 5% |
| Percentage of franchisees that | 52% | 55% |
| attained or surpassed Average |  |  |
| Gross Profit % |  |  |
| # of Franchises | 46 | 53 |
|  | Year Ending | Year Ending |
|  | 12/31/2021 | 12/31/2022 |
| Average Gross Receipts | $153,447.00 | $145,821.74 |
| Median Gross Receipts | $155,067.05 | $147,175.33 |
| Highest Gross Receipts | $216,496.79 | $224,946.96 |
| Lowest Gross Receipts | $101,500.89 | $93,847.00 |
| Percentage of franchisees that | 51% | 58% |
| attained or surpassed Average |  |  |
| Gross Receipts |  |  |
| Average Gross Profit % | 59% | 57% |
| Highest Gross Profit % | 100% | 100% |
| Median Gross Profit % | 58% | 78% |
| Lowest Gross Profit % | 2% | 59% |
| Percentage of franchisees that | 45% | 58% |
| attained or surpassed Average |  |  |
| Gross Profit % |  |  |
| # of Franchises | 47 | 52 |
|  | Year Ending | Year Ending |
|  | 12/31/2021 | 12/31/2022 |
| Average Gross Receipts | $56,216.58 | $61,074.36 |
| Median Gross Receipts | $54,760.85 | $63,904.61 |
| Highest Gross Receipts | $101,313.26 | $93,099.46 |
| Lowest Gross Receipts | $14,199.28 | $13,235.16 |
| Percentage of franchisees that | 45% | 56% |
| attained or surpassed Average |  |  |
| Gross Receipts |  |  |
| Average Gross Profit % | 65% | 42% |
| Highest Gross Profit % | 100% | 58% |
| Median Gross Profit % | 66% | 47% |
| Lowest Gross Profit % | 6% | 3% |
| Percentage of franchisees that | 51% | 83% |
| attained or surpassed Average |  |  |
| Gross Profit % |  |  |
| # of Franchises | 47 | 52 |
|  |  |  |
|  | Year Ending | Year Ending |
|  | 12/31/2021 | 12/31/2022 |
| Average Gross Receipts | $278,658.52 | $290,853.97 |
| Median Gross Receipts | $216,496.79 | $225,868.00 |
| Highest Gross Receipts | $2,571,645.75 | $2,714,401.00 |
| Lowest Gross Receipts | $14,199.28 | $13,235.16 |
| Number of franchises that | 81 | 88 |
| attained or surpassed Average |  |  |
| Gross Receipts |  |  |
| Percentage of franchises that | 44% | 42% |
| attained or surpassed Average |  |  |
| Gross Receipts |  |  |
| Highest Gross Profit % | 100% | 100% |

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 36–41)

Question 3

As of December 31, 2024, how many Caring Transitions franchises were operating in North America?

Accepted Answer

here were no amounts due to related parties at December 31, 2023 and 2022.

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### C.T. FRANCHISING SYSTEMS, INC Franchisee List December 31, 2024

As of the above date, there are a total of 379 Caring Transitions franchises of a type substantially similar to the Caring Transitions franchises offered in this disclosure document, 372 of which are operational. The names, business addresses, and telephone numbers are listed below.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)

Question 4

What was the highest Gross Profit % attained by a Caring Transitions franchise between 2022 and 2024?

Accepted Answer

| Percentage of franchises that attained or surpassed Average Gross Receipts | 35% |
|---|---|
| Highest Gross Profit % | 100% |
| Average Gross Profit % | 67% |
| Median Gross Profit % | 67% |
| Lowest Gross Profit % | 13% |
| Percentage of franchisees that | 50% |
| attained or surpassed Average |  |
| Gross Profit % |  |
| # of Franchise Owners | 204 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)

Question 5

What was the highest reported gross receipt for any Caring Transitions franchise for the year ending 12/31/2021?

Accepted Answer

| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| u. Dispute resolution by arbitration or mediation | 16.2 | Except for certain claims, all disputes must be arbitrated in Hamilton County, Ohio (subject to state law); claims may not be consolidated with claims of other franchisees; parties waive right to jury trial and punitive damages; except for certain claims, all claims must be brought within 1 year, subject to state law. |
| v. Choice of forum | 18.4 | Except for claims arising under a franchise law of the state where the franchised business is located, all litigation or arbitration must be in Hamilton County, Ohio, subject to state law. |
| w. Choice of law | 18.3 | Except for claims arising under a franchise law of the state where the franchised business is located, Ohio law applies, subject to state law. |
|  | Year Ending | Year Ending |
|  | 12/31/2021 | 12/31/2022 |
| Average Gross Receipts | $606,166.45 | $633,235.64 |
| Median Gross Receipts | $521,607.16 | $509,928.49 |
| Highest Gross Receipts | $2,571,645.75 | $2,714,401.00 |
| Lowest Gross Receipts | $395,912.76 | $390,847.70 |
| Percentage of franchisees that | 30% | 30% |
| attained or surpassed Average |  |  |
| Gross Receipts |  |  |

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 36–41)

Question 6

What was the lowest Gross Profit % attained by a Caring Transitions franchise between 2022 and 2024?

Accepted Answer

| Percentage of franchises that attained or surpassed Average Gross Receipts | 35% |
|---|---|
| Highest Gross Profit % | 100% |
| Average Gross Profit % | 67% |
| Median Gross Profit % | 67% |
| Lowest Gross Profit % | 13% |
| Percentage of franchisees that | 50% |
| attained or surpassed Average |  |
| Gross Profit % |  |
| # of Franchise Owners | 204 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)

Question 7

How many Caring Transitions franchise owners were there between 2022 and 2024?

Accepted Answer

Table No. 2 Transfers of Franchised Outlets from Franchisees to New Owners (other than the Franchisor) For years 2022 through 2024

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)

Question 8

How many Caring Transitions franchisees attained or surpassed the average gross receipts?

Accepted Answer

| First Quartile of Franchise Owners | Year Ending 12/31/2024 |
|---------------------------------------|---------------------------|
| Average Gross Receipts                | $880,330.32              |
| Median Gross Receipts                 | $685,019.00              |
| Highest Gross Receipts                | $2,936,858.88            |
| Lowest Gross Receipts                 | $467,707.84              |
| Percentage of franchisees that        | 47%                       |
| attained or surpassed Average         |                           |
| Gross Receipts                        |                           |
| Average Gross Profit %                | 63%                       |
| Highest Gross Profit %                | 90%                       |
| Median Gross Profit %                 | 65%                       |
| Lowest Gross Profit %                 | 14%                       |
| Percentage of franchisees that        | 50%                       |
| attained or surpassed Average         |                           |
| Gross Profit %                        |                           |
| # of Franchises                       | 51                        |

---

| Average Gross Receipts | $606,166.45 | $633,235.64 |
| Median Gross Receipts | $521,607.16 | $509,928.49 |
| Highest Gross Receipts | $2,571,645.75 | $2,714,401.00 |
| Lowest Gross Receipts | $395,912.76 | $390,847.70 |
| Percentage of franchisees that |
| attained or surpassed Average |  |  |
| Gross Receipts |  |  |
| Average Gross Profit % | 63% | 62% |
| Highest Gross Profit % | 97% | 96% |
| Median Gross Profit % | 64% | 62% |
| Lowest Gross Profit % | 27% | 17% |
| Percentage of franchisees that |
| attained or surpassed Average |  |  |
| Gross Profit % |  |  |
| # of Franchises | 46 | 53 |

---

| Average Gross Receipts | $306,361.73 | $311,961.78 |
| Median Range of Gross | $302,264,16 | $315,602.98 |
| Receipts |  |  |
| Highest Gross Receipts | $395,420.54 | $382,465.66 |
| Lowest Gross Receipts | $218,375.26 | $225,868.00 |
| Percentage of franchisees that |
| attained or surpassed Average |  |  |
| Gross Receipts |  |  |
| Average Gross Profit % | 56% | 54% |
| Highest Gross Profit % | 100% | 100% |
| Median Gross Profit % | 56% | 57% |
| Lowest Gross Profit % | 15% | 5% |
| Percentage of franchisees that |
| attained or surpassed Average |  |  |
| Gross Profit % |  |  |
| # of Franchises | 46 | 53 |

---

| Average Gross Receipts | $153,447.00 | $145,821.74 |
| Median Gross Receipts | $155,067.05 | $147,175.33 |
| Highest Gross Receipts | $216,496.79 | $224,946.96 |
| Lowest Gross Receipts | $101,500.89 | $93,847.00 |
| Percentage of franchisees that |
| attained or surpassed Average |  |  |
| Gross Receipts |  |  |
| Average Gross Profit % | 59% | 57% |
| Highest Gross Profit % | 100% | 100% |
| Median Gross Profit % | 58% | 78% |
| Lowest Gross Profit % | 2% | 59% |
| Percentage of franchisees that |
| attained or surpassed Average |  |  |
| Gross Profit % |  |  |
| # of Franchises | 47 | 52 |

---

| Average Gross Receipts | $56,216.58 | $61,074.36 |
| Median Gross Receipts | $54,760.85 | $63,904.61 |
| Highest Gross Receipts | $101,313.26 | $93,099.46 |
| Lowest Gross Receipts | $14,199.28 | $13,235.16 |
| Percentage of franchisees that |
| attained or surpassed Average |  |  |
| Gross Receipts |  |  |
| Average Gross Profit % | 65% | 42% |
| Highest Gross Profit % | 100% | 58% |
| Median Gross Profit % | 66% | 47% |
| Lowest Gross Profit % | 6% | 3% |
| Percentage of franchisees that |
| attained or surpassed Average |  |  |
| Gross Profit % |  |  |
| # of Franchises | 47 | 52 |

---

| Average Gross Receipts | $278,658.52 | $290,853.97 |
| Median Gross Receipts | $216,496.79 | $225,868.00 |
| Highest Gross Receipts | $2,571,645.75 | $2,714,401.00 |
| Lowest Gross Receipts | $14,199.28 | $13,235.16 |
| Number of franchises that |
| attained or surpassed Average |  |  |
| Gross Receipts |  |  |
| Percentage of franchises that |
| attained or surpassed Average |  |  |
| Gross Receipts |  |  |
| Highest Gross Profit % | 100% | 100% |

---

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 36–41)

Question 9

What was the median Gross Profit % for Caring Transitions franchises between 2022 and 2024?

Accepted Answer

| Percentage of franchises that attained or surpassed Average Gross Receipts | 35% |
|---|---|
| Highest Gross Profit % | 100% |
| Average Gross Profit % | 67% |
| Median Gross Profit % | 67% |
| Lowest Gross Profit % | 13% |
| Percentage of franchisees that | 50% |
| attained or surpassed Average |  |
| Gross Profit % |  |
| # of Franchise Owners | 204 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)

Question 10

What was the median gross receipts for all Caring Transitions franchises for the year ending 12/31/2022?

Accepted Answer

| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| u. Dispute resolution by arbitration or mediation | 16.2 | Except for certain claims, all disputes must be arbitrated in Hamilton County, Ohio (subject to state law); claims may not be consolidated with claims of other franchisees; parties waive right to jury trial and punitive damages; except for certain claims, all claims must be brought within 1 year, subject to state law. |
| v. Choice of forum | 18.4 | Except for claims arising under a franchise law of the state where the franchised business is located, all litigation or arbitration must be in Hamilton County, Ohio, subject to state law. |
| w. Choice of law | 18.3 | Except for claims arising under a franchise law of the state where the franchised business is located, Ohio law applies, subject to state law. |
|  | Year Ending | Year Ending |
|  | 12/31/2021 | 12/31/2022 |
| Average Gross Receipts | $606,166.45 | $633,235.64 |
| Median Gross Receipts | $521,607.16 | $509,928.49 |
| Highest Gross Receipts | $2,571,645.75 | $2,714,401.00 |
| Lowest Gross Receipts | $395,912.76 | $390,847.70 |
| Percentage of franchisees that | 30% | 30% |
| attained or surpassed Average |  |  |
| Gross Receipts |  |  |
| Average Gross Profit % | 63% | 62% |
| Highest Gross Profit % | 97% | 96% |
| Median Gross Profit % | 64% | 62% |
| Lowest Gross Profit % | 27% | 17% |
| Percentage of franchisees that | 52% | 49% |
| attained or surpassed Average |  |  |
| Gross Profit % |  |  |
| # of Franchises | 46 | 53 |

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 36–41)

Question 11

What are the ongoing obligations of a Caring Transitions franchisee regarding its limited liability business entity while the agreement is in effect?

Accepted Answer

- (c) At all times while this agreement is in effect:

- (1) The limited liability business entity shall not operate any other business or engage in any other business activities except the operation of one or more Caring Transitions Franchises.

- (2) Franchisee shall not cause or permit any of provision of its organizational or governing documents to be modified or restated without Franchisor's prior written approval.

- (3) Within ten days after Franchisor's request or after any change in any information on the Principal List, Franchisee shall provide Franchisor with an updated list of principals.

- (4) Upon request, Franchisee shall provide Franchisor with true and complete copies, certified by the Designated Individual, of Franchisee's organizational and governing documents.

- (5) Each new Principal of Franchisee must execute an agreement, in a form prescribed by Franchisor, unconditionally guaranteeing the full payment of Franchisee's obligations under this agreement and agreeing to be jointly and severally bound by all the provisions of this agreement, including the Covenants After Termination.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)

Question 12

What percentage of Caring Transitions franchisees attained or surpassed the Average Gross Profit % between 2022 and 2024?

Accepted Answer

| Percentage of franchises that attained or surpassed Average Gross Receipts | 35% |
|---|---| 
| Highest Gross Profit % | 100% |
| Average Gross Profit % | 67% |
| Median Gross Profit % | 67% |
| Lowest Gross Profit % | 13% |
| Percentage of franchisees that | 50% |
| attained or surpassed Average |  |
| Gross Profit % |  |
| # of Franchise Owners | 204 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)

Question 13

What is the percentage of Caring Transitions franchises that attained or surpassed the average gross receipts?

Accepted Answer

at were open for the entire year are included in the table.

| First Quartile of Franchise Owners | Year Ending 12/31/2024 |
|---------------------------------------|---------------------------|
| Average Gross Receipts                | \$880,330.32              |
| Median Gross Receipts                 | \$685,019.00              |
| Highest Gross Receipts                | \$2,936,858.88            |
| Lowest Gross Receipts                 | \$467,707.84              |
| Percentage of franchisees that        | 47%                       |
| attained or surpassed Average         |                           |
| Gross Receipts                        |                           |
| Average Gross Profit %                | 63%                       |
| Highest Gross Profit %                | 90%                       |
| Median Gross Profit %                 | 65%                       |
| Lowest Gross Profit %                 | 14%                       |
| Percentage of franchisees that        | 50%                       |
| attained or surpassed Average         |                           |
| Gross Profit %                        |                           |
| # of Franchises                       | 51                        |

|  | Year Ending 12/31/2024 |
|---|---|
| Average Gross Receipts | $880,330.32 |
| Median Gross Receipts | $685,019.00 |
| Highest Gross Receipts | $2,936,858.88 |
| Lowest Gross Receipts | $467,707.84 |
| Percentage of franchisees that | 47% |
| attained or surpassed Average |  |
| Gross Receipts |  |
| Average Gross Profit % | 63% |
| Highest Gross Profit % | 90% |
| Median Gross Profit % | 65% |
| Lowest Gross Profit % | 14% |
| Percentage of franchisees that | 50% |
| attained or surpassed Average |  |
| Gross Profit % |  |
| # of Franchises | 51 Year Ending 12/31/2024 |
| Average Gross Receipts | $347,041.05 |
| Median Range of Gross | $351,346.29 |
| Receipts |  |
| Highest Gross Receipts | $476,276.96 |
| Lowest Gross Receipts | $240,434.89 |
| Percentage of franchisees that | 53% |
| attained or surpassed Average |  |
| Gross Receipts |  |
| Average Gross Profit % | 66% |
| Highest Gross Profit % | 99% |
| Median Gross Profit % | 66% |
| Lowest Gross Profit % | 37% |
| Percentage of franchisees that | 50% |
| attained or surpassed Average |  |
| Gross Profit % |  |
| # of Franchises | 51 Year Ending 12/31/2024 |
| Average Gross Receipts | $168,369.89 |
| Median Gross Receipts | $168,675.91 |
| Highest Gross Receipts | $238,168.91 |
| Lowest Gross Receipts | $112,771.00 |
| Percentage of franchisees that | 50% |
| attained or surpassed Average |  |
| Gross Receipts |  |
| Average Gross Profit % | 65% |
| Highest Gross Profit % | 100% |
| Median Gross Profit % | 64% |
| Lowest Gross Profit % | 13% |
| Percentage of franchisees that | 47% |
| attained or surpassed Average |  |
| Gross Profit % |  |
| # of Franchises | 51 Year Ending 12/31/2024 |
| Average Gross Receipts | $55,595.00 |
| Median Gross Receipts | $57,629.59 |
| Highest Gross Receipts | $112,126.66 |
| Lowest Gross Receipts | $2,400.00 |
| Percentage of franchisees that | 50% |
| attained or surpassed Average |  |
| Gross Receipts |  |
| Average Gross Profit % | 73% |
| Highest Gross Profit % | 100% |
| Median Gross Profit % | 77% |
| Lowest Gross Profit % | 16% |
| Percentage of franchisees that | 57% |
| attained or surpassed Average |  |
| Gross Profit % |  |
| # of Franchises | 51 Year Ending 12/31/2024 |
| Average Gross Receipts | $362,447.98 |
| Median Gross Receipts | $240,434.89 |
| Highest Gross Receipts | $2,936,858.88 |
| Lowest Gross Receipts | $2,400.00 |
| Number of franchisees that | 72 |
| attained or surpassed Average |  |
| Gross Receipts |  |
| Percentage of franchises that | 35% |
| attained or surpassed Average |  |
| Gross Receipts |  |
| Highest Gross Profit % | 100% |
| Average Gross Profit % | 67% |
| Median Gross Profit % | 67% |
| Lowest Gross Profit % | 13% |
| Percentage of franchisees that | 50% |
| attained or surpassed Average |  |
| Gross Profit % |  |
| # of Franchise Owners | 204 |For purposes of this Item 19, "Gross Receipts" means the total of all income arising from the operation of the franchised business.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 36–41)

Question 14

What percentage of Caring Transitions franchises attained or surpassed the Average Gross Receipts between 2022 and 2024?

Accepted Answer

| Percentage of franchises that attained or surpassed Average Gross Receipts | 35% |
|---|---|
| Highest Gross Profit % | 100% |
| Average Gross Profit % | 67% |
| Median Gross Profit % | 67% |
| Lowest Gross Profit % | 13% |
| Percentage of franchisees that | 50% |
| attained or surpassed Average |  |
| Gross Profit % |  |
| # of Franchise Owners | 204 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)

Question 15

What are the requirements for the organizational and governing documents of a Caring Transitions franchisee that is a limited liability business entity?

Accepted Answer

advisable in additional to the coverages and limits required by Franchisor.

### 7.10 Limited Liability Business Entity.

- (a) If Franchisee is a limited liability business entity (such as a corporation or limited liability company) when it signs this agreement, it must satisfy the following requirements at the time it signs this agreement:
  - (1) Franchisee must be a newly organized business entity that has never operated or engaged in any business.
  - (2) Franchisee's organizational and governing documents must (i) provide that its activities are confined exclusively to operating one or more Caring Transitions Franchises, (ii) prescribe a maximum of ten Principals, and (iii) prohibit the issuance or transfer of its ownership interests other than in compliance with the terms and conditions of this agreement.
  - (3) Franchisee shall provide Franchisor with a list of principal owners, certified by the Designated Individual, containing the full legal name, home address, home telephone number, and ownership percentage of each principal of Franchisee.
  - (4) Each principal of Franchisee must execute a separate agreement, in a form prescribed by Franchisor, unconditionally guaranteeing the full payment of Franchisee's obligations under this agreement and agreeing to be jointly and severally bound by all the provisions of this agreement, including the Covenants After Termination.
  - (5) Each ownership certificate of Franchisee must bear a legend stating that the issuance and transfer of any ownership interest in Franchisee are subject to the terms and conditions of this agreement. If Franchisee is a limited liability company without certificates evidencing ownership, Franchisee shall provide Franchisor with acceptable evidence that its partnership or operating agreement or other organizational documents contain provisions acceptable to Franchisor prohibiting the transfer of any ownership interest in Franchisee other than in compliance with the terms and conditions of this agreement.
  - (6) Franchisee shall provide Franchisor with true and complete copies of its organizational and governing documents, including the resolutions of its Principals or governing body authorizing the execution of this agreement.
  - (7) The name of the Limited Liability Entity may not contain any of the words CARING TRANSITIONS, CARING, TRANSITIONS, or CT in any order, any variation thereof, or any of the other Marks.
- (b) If Franchisee is not a limited liability business entity when it signs this agreement, then within 90 days after signing this agreement, Franchisee shall transfer all of its interest in the Franchised Business and all of its rights and obligations under this agreement to a limited liability business entity, comply with all of the requirements in subparagraph 7.10(a), and comply with the following additional requirements:
  - (1) The individual(s) who executed this agreement as Franchisee shall beneficially own a controlling interest in the limited liability business entity and shall not diminish his/her/their ownership Interest therein, except as may be required by law.
  - (2) One of the individuals who executed this agreement as Franchisee shall act as the principal executive (or manager) and operating officer of the limited liability business entity.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)

Question 16

What is the total number of Caring Transitions franchise owners considered in the financial performance representation?

Accepted Answer

There were 372 Caring Transitions franchises (each franchise consists of a single franchise territory) in operation as of December 31, 2024, which were owned by 273 franchise owners. Of these, 204 franchise owners were in operation for the entire year. Presented below are historic gross revenue and gross profit percentage figures for certain franchise owners for the one-year period ending December 31, 2024. The data is presented by quartile and then cumulatively. Only data from franchise owners that were open for the entire year are included in the table.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 36–41)

Question 17

What was the total number of Caring Transitions franchise transfers in Florida between 2022 and 2024?

Accepted Answer

wners (other than the Franchisor) For years 2022 through 2024

| STATE      | YEAR | NUMBER OF TRANSFERS |
|------------|------|---------------------|
| CALIFORNIA | 2022 | 0                   |
|            | 2023 | 5                   |
|

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)

Question 18

What was the total number of Caring Transitions outlets at the end of 2024?

Accepted Answer

| STATE | YEAR | OUTLETS AT START OF YEAR | OUTLETS OPENED | TERMINATIONS | NON- RENEWALS | REACQUIRED BY FRANCHISOR | CEASED OPERATIONS OTHER REASONS | OUTLETS AT END OF THE YEAR |
|---|---|---|---|---|---|---|---|---|
| NEW YORK | 2022 | 10 | 0 | 0 | 0 | 0 | 0 | 10 |
|  | 2023 | 10 | 5 | 0 | 2 | 0 | 2 | 11 |
|  | 2024 | 11 | 3 | 0 | 0 | 0 | 0 | 14 |
| NORTH | 2022 | 4 | 2 | 0 | 0 | 0 | 0 | 6 |
| CAROLINA |  |  |  |  |  |  |  |  |
|  | 2023 | 6 | 9 | 0 | 0 | 0 | 0 | 15 |
|  | 2024 | 15 | 3 | 0 | 0 | 1 | 0 | 17 |
| OHIO | 2022 | 8 | 1 | 0 | 0 | 0 | 0 | 9 |
|  | 2023 | 9 | 0 | 0 | 1 | 0 | 0 | 8 |
|  | 2024 | 8 | 2 | 0 | 0 | 0 | 0 | 10 |
| OKLAHOMA | 2022 | 6 | 0 | 0 | 0 | 0 | 0 | 6 |
|  | 2023 | 6 | 2 | 0 | 0 | 0 | 0 | 8 |
|  | 2024 | 8 | 0 | 1 | 0 | 0 | 0 | 7 |
| ONTARIO | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 1 | 0 | 0 |
| OREGON | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 2 | 0 | 0 | 0 | 0 | 3 |
| PENNSYLVANIA | 2022 | 9 | 1 | 0 | 0 | 0 | 0 | 10 |
|  | 2023 | 10 | 2 | 0 | 1 | 0 | 0 | 11 |
|  | 2024 | 11 | 4 | 1 | 0 | 0 | 0 | 14 |
| SOUTH | 2022 | 5 | 2 | 0 | 0 | 0 | 0 | 7 |
| CAROLINA |  |  |  |  |  |  |  |  |
|  | 2023 | 7 | 1 | 0 | 0 | 0 | 0 | 8 |
|  | 2024 | 8 | 3 | 0 | 0 | 0 | 1 | 10 |
| SOUTH DAKOTA | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
| TENNESSEE | 2022 | 3 | 2 | 0 | 0 | 0 | 0 | 5 |
|  | 2023 | 5 | 0 | 0 | 0 | 0 | 0 | 5 |
|  | 2024 | 5 | 0 | 0 | 0 | 1 | 0 | 4 |
| TEXAS | 2022 | 23 | 6 | 0 | 0 | 0 | 0 | 29 |
|  | 2023 | 29 | 3 | 0 | 0 | 0 | 0 | 32 |
|  | 2024 | 32 | 2 | 2 | 0 | 1 | 0 | 31 |
| UTAH | 2022 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 1 | 0 | 0 | 1 | 0 | 2 |
|  | 2024 | 2 | 2 | 0 | 0 | 0 | 0 | 4 |
| VIRGINIA | 2022 | 12 | 2 | 0 | 0 | 0 | 0 | 14 |
|  | 2023 | 14 | 0 | 0 | 0 | 0 | 0 | 14 |
|  | 2024 | 14 | 3 | 0 | 0 | 0 | 0 | 17 |
| WASHINGTON | 2022 | 10 | 2 | 0 | 0 | 0 | 0 | 12 |
|  | 2023 | 12 | 3 | 0 | 0 | 0 | 0 | 15 |
|  | 2024 | 15 | 2 | 0 | 0 | 0 | 0 | 17 |
| WEST VIRGINIA | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| WISCONSIN | 2022 | 5 | 0 | 0 | 0 | 0 | 0 | 5 |
|  | 2023 | 5 | 3 | 0 | 0 | 0 | 0 | 8 |
|  | 2024 | 8 | 2 | 0 | 0 | 0 | 0 | 10 |
| WYOMING | 2022 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)

Question 19

According to the FDD, in which other states besides Hawaii is the Caring Transitions franchise registration effective?

Accepted Answer

- 1. The following list reflects the status of our franchise registrations in the states which have franchise registration laws:
  - This registration is effective in the states of California, Florida, Hawaii, Illinois, Indiana, Kentucky, Maryland, Michigan, Minnesota, Nebraska, New York, Texas, Virginia, Washington, and Wisconsin.

Source: Item 22 — CONTRACTS (FDD page 49)

Question 20

What other affiliated companies' Boards of Directors has Dan Murphy been a member of besides Caring Transitions?

Accepted Answer

Mr. Murphy has been a member of the Board of Directors of Caring Transitions since January 2012. He has been a member of the Board of Directors of our affiliate, the Growth Coach, since December 2002, served as its Chief Executive Officer from January 2011 through November 2016, and as its president from December 2002 through January 2011 and from February 2013 through January 2014. He has been a member of the Board of Directors of our affiliate TruBlue since May 2011 and of our affiliate Fresh Coat since January 2012.

Source: Item 2 — BUSINESS EXPERIENCE (FDD pages 9–10)

Question 21

What are the consequences if a Caring Transitions franchisee fails to comply with local ordinances?

Accepted Answer

Franchisee shall comply with all laws, regulations and requirements of federal, state, municipal, and other governmental entities and agencies (including, without limitation, Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Family Medical Leave Act, state or local fictitious or assumed name registration requirements, wage and hour, overtime, and all other federal, state and local laws of any kind), and to obtain and maintain any and all licenses and permits required by any governmental agencies or otherwise necessary to conduct the franchised business in any jurisdiction in which it operates.

Franchisee shall submit documented proof of its compliance with any local, state or federal law or licensing regulation within five days of Franchisor's request, unless Franchisor authorizes in writing a longer period of time for Franchisee's compliance.

Franchisee agrees and acknowledges that Franchisee alone shall be responsible for compliance with the obligations under this paragraph, and that Franchisor shall have no obligation with respect to Franchisee's compliance under this paragraph.

Question 22

What are the consequences if a Caring Transitions franchisee fails to comply with the System Standards?

Accepted Answer

travel, room, board and wages, and any training fee charged by Franchisor.
- 7.2 System Standards. Franchisee acknowledges and agrees that every detail of the System is important, not only to Franchisee but also to Franchisor and other Caring Transitions franchisees, in order to develop and maintain high and uniform operating standards, to increase the demand for the products and services offered by all franchisees, to establish and maintain a reputation for uniform, efficient, high quality services, and to protect the goodwill of all Caring Transitions franchises. Franchisee further acknowledges and agrees that a fundamental requirement of the System, this agreement, and other Caring Transitions franchises is adherence by all franchisees to the uniform specifications, standards, operating procedures and rules prescribed by Franchisor for the development

and operation of the franchised business (hereafter referred to as "System Standards"). Accordingly, Franchisee agrees to comply with each and every System Standard (including, by way of example and not limitation, a designated maximum or minimum for a Buyer's Premium or for other Permitted Products and Services), as periodically modified and supplemented by Franchisor in its sole and absolute discretion, during the term of this agreement. Franchisee further agrees that System Standards prescribed from time to time in the Manual, or otherwise communicated to Franchisee in writing, shall constitute provisions of this agreement as if fully set forth in this agreement. All references to this agreement include all System Standards as periodically modified.

- 7.3 Products and Services. Franchisee shall offer and sell all products and services, and only those products and services, authorized by Franchisor and specified in the Manual or as designated in writing by Franchisor ("Permitted Products and Services"). Franchisor may unilaterally add and delete products or services to or from the Permitted Products and Services at any time. Franchisor may also designate any products or services as optional for all or any subgroup of franchisees. Optional services currently include moving services. Before offering or selling any Permitted Products or Services, Franchisee shall comply with all appliable laws and other requirements and submit proof of compliance therewith to Franchisor.
- 7.4 Fixtures and Furnishings. Franchisee, at its own expense, shall purchase and install, the Communication and Information System as specified in Section 7.15 below, and all fixtures, furnishings, signs, and other equipment as may be specified by the System Standards from time to time; and shall not permit the installation of any fixtures, furnishings, signs, or other equipment not conforming to the System Standards.
- 7.5 Supplier Approval. Franchisor has the right to require Franchisee to purchase all goods and services used in the franchised business solely from suppliers designated by Franchisor, which may include Franchisor or an affiliate. Franchisor has the right to condition its approval of any supplier upon benefits to Franchisor and/or its affiliates based upon purchases by Caring Transitions franchisees. Franchisor and/or its affiliates may derive income or receive benefits as a result of Franchisee's and/or other Caring Transitions franchisees' purchase of items. Franchisor has the right to require Franchisee to purchase certain goods or services exclusively from one or more designated suppliers, or to purchase cooperatively with Franchisor or other Caring Transitions franchisees in order to maintain Franchisor's quality standards or to take advantage of price discounts, benefits or other sales incentives. Franchisor and/or its affiliates have the right to receive rebates, discounts, allowances, and other payments from suppliers in respect of group purchasing programs and otherwise on account of the suppliers' dealings with Franchisee and other Caring Transitions franchisees, which Franchisor is entitled to retain and use without restriction for any purpose and without accounting to Franchisee. Franchisor has the unlimited right to change and add designated suppliers and to change the list of goods and services required to be purchased from designated suppliers at any time.
- 7.6 Business Operation. Franchisee must open the franchised business within ninety (90) days after Franchisee or Franchisee's designee completes the initial training program required by Section 7.1 above. After opening, Franchisee shall maintain the franchised business in continuous operation during the term of this agreement. Franchisee shall not use or permit the use of the Premises on which the franchised business is located for any other purpose or activity other than the operation of the franchised business, without first obtaining the written consent of Franchisor (*provided, however*, that this restriction shall not apply to Franchisee's operation of a business under a license or franchise agreement with an affiliate of Franchisor, or if Franchisee's residence is the Premises). The franchised business must at all times be under the direct supervision of the Franchisee, or such person as has been approved in writing by Franchisor and has successfully completed Franchisor's initial training program and any other mandatory training programs, who must devote his full time, energy, and best

efforts to the operation of the franchised business. If Franchisee owns more than one franchised business, Franchisor may require that each franchised business have its own full-time manager. Franchisee must have a business development representative dedicated to marketing the franchised business.

- 7.7 Payment of Liabilities and Taxes. Franchisee shall pay its distributors, lessors, contractors, suppliers, trade creditors, employees, and other creditors promptly as the debts and obligations to such parties become due, and pay all taxes on real and personal property, leasehold improvements and fixtures and equipment, and all sales and use, income, payroll and other taxes promptly when due and hold Franchisor harmless therefrom. Franchisee's failure to do so shall constitute a breach of this agreement. All taxes shall be paid directly to the taxing authorities prior to the delinquent date. If Franchisee shall fail to pay any such obligations promptly as the debts to such parties become due, or if any taxes become delinquent, Franchisor, in addition to its other remedies provided in this agreement, may elect to pay any such obligation or delinquent tax on behalf of Franchisee, together with late charges, penalties and interest, if any, and Franchisee shall, upon demand, reimburse Franchisor for any sums so paid by Franchisor, together with interest at the rate of eighteen percent (18%) per annum, or the highest rate allowed by law, whichever is less, from the date of payment by Franchisor to the date of reimbursement by Franchisee.
- 7.8 Records. During the term of this agreement, Franchisee shall maintain and preserve, for at least six years from the date of their preparation, full, complete and accurate books and records of account, prepared in accordance with generally accepted accounting principles, and customer files and records pertaining to the franchised business granted pursuant to this agreement, all in the form and manner prescribed by Franchisor in the Manual or otherwise in writing.

Question 23

What are the consequences if a Caring Transitions franchisee fails to comply with the terms of the franchise agreement regarding intellectual property?

Accepted Answer

de Secrets"). Each Covenantor shall use such Trade Secrets solely for Franchisee's benefit and shall not, during the term of the Franchise Agreement or at any time thereafter, communicate, divulge, or use any Trade Secrets to or for the benefit of any other person, partnership, association or entity.
- 2. Intellectual Property. Each Covenantor acknowledges Franchisor's right, title, and interest in and to the service mark CARING TRANSITIONS®, Franchisor's logo, and certain other proprietary service marks, logos, symbols, and trade names presently used by Franchisor or that Franchisor may hereafter use or provide for use by Franchisee, and the identification, schemes, standards, specifications, operating procedures, and other concepts embodied in Franchisor's franchise system (the "Marks"). Covenantor further acknowledges that any use of the Marks outside the scope of the Franchise Agreement without Franchisor's prior written consent would be an infringement of Franchisor's rights in the Marks. Covenantor expressly covenants that he or she shall not, directly or indirectly, commit an act

of infringement or contest, or aid in contesting, the validity or ownership of the Marks or take any other action in derogation thereof during the term of the Franchise Agreement or after the expiration or termination thereof.

- 3. Covenants During Term of Franchise Agreement. Each Covenantor agrees that, so long as the Franchise Agreement is in effect, he or she shall not, either directly or indirectly, for him or herself or through, on behalf of, or in conjunction with, any other person (including a spouse, child, parent, or sibling of a Covenantor) (each of which is a "Covered Person" for purposes of this agreement):
  - (a) divert or attempt to divert any business or client of the Franchised Business or of any other Caring Transitions Franchisee to a Competitive Business, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the Operating System;

Question 24

What are the consequences if a Caring Transitions franchisee fails to comply with the terms of the franchise agreement regarding customer service?

Accepted Answer

Franchisee acknowledges and agrees that every detail of the System is important, not only to Franchisee but also to Franchisor and other Caring Transitions franchisees, in order to develop and maintain high and uniform operating standards, to increase the demand for the products and services offered by all franchisees, to establish and maintain a reputation for uniform, efficient, high quality services, and to protect the goodwill of all Caring Transitions franchises.

Franchisee further acknowledges and agrees that a fundamental requirement of the System, this agreement, and other Caring Transitions franchises is adherence by all franchisees to the uniform specifications, standards, operating procedures and rules prescribed by Franchisor for the development

and operation of the franchised business (hereafter referred to as "System Standards"). Accordingly, Franchisee agrees to comply with each and every System Standard (including, by way of example and not limitation, a designated maximum or minimum for a Buyer's Premium or for other Permitted Products and Services), as periodically modified and supplemented by Franchisor in its sole and absolute discretion, during the term of this agreement. Franchisee further agrees that System Standards prescribed from time to time in the Manual, or otherwise communicated to Franchisee in writing, shall constitute provisions of this agreement as if fully set forth in this agreement. All references to this agreement include all System Standards as periodically modified.

Question 25

What are the consequences if a Caring Transitions franchisee fails to comply with the terms of the franchise agreement regarding financial reporting?

Accepted Answer

By signing this agreement, you acknowledge Franchisor's need to compile and maintain accurate sales records for each Franchise in our franchise system.

For this reason, you agree to maintain separate sales records for each Franchise that you own.

You may consolidate your royalty fees you owe for all your Caring Transition Franchises and you may consolidate your branding fees you owe for all of your Caring Transition Franchises by sending a single monthly payment in satisfaction of all the royalty fees and by sending a single monthly payment for all branding fees, but You must submit separate sales reports for each Caring Transition Franchise that you own.

Question 26

What are the consequences if a Caring Transitions franchisee fails to maintain adequate insurance coverage?

Accepted Answer

ployee Dishonesty & Client Theft Insurance with a minimum limit of \$25,000.

Franchisee shall maintain such other insurance as may be required by statute or rule of the state or locality in which the franchised business is located and operated and by any lease to which Franchisee is a party. All policies of insurance that Franchisee is required to maintain hereunder (except for the Workers' Compensation Insurance) shall have a deductible of not more than \$1,000 and shall name Franchisor as an additional insured. All insurance shall be placed with an insurance carrier or carriers approved in writing by Franchisor and shall not be subject to cancellation except upon thirty days written notice to Franchisor. Franchisee shall submit to Franchisor, before commencing business, certifications of insurance (with a copy of the original policy attached) and a workers' compensation certificate of premium payment, showing full compliance with the requirements of this paragraph, and shall keep current certifications on deposit with Franchisor at all times during the term of this agreement. Franchisee shall not open or operate the franchised business until and unless Franchisee has complied and remains in compliance with all of the requirements of this paragraph. If Franchisee fails to comply with these requirements, Franchisor may (but shall not be obligated to) obtain the required insurance and keep it in force and effect, and Franchisee shall pay Franchisor, upon demand, the cost thereof, together with interest thereon at the rate of eighteen percent (18%) per annum, or the highest rate allowed by law, whichever is less. Franchisor, upon not less than thirty (30) days written notice to Franchisee, may reasonably increase the minimum coverage for any insurance required hereunder, decrease the maximum deductible, or require different or additional kinds of insurance coverage to reflect inflation, changes in standards of liability, higher damage awards, or other relevant changes in circumstances. The terms of this paragraph shall survive the expiration, termination, or cancellation of this agreement.

(c) The insurance required by subparagraph (b) above is for Franchisor's protection. Franchisee is advised to consult with its own insurance agents and legal counsel to determine what types and levels of insurance protection may be needed or

Question 27

What are the consequences if a Caring Transitions franchisee fails to maintain the confidentiality of trade secrets?

Accepted Answer

er, director or manager. If Covenantor has more than one relationship with Franchisee (e.g., Covenantor is both a Principal and an officer of Franchisee), "the termination of Covenantor's relationship with Franchisee" occurs upon the termination of Covenantor's last relationship with Franchisee.

- 5. The parties agree that the full extent of the damages that Franchisor will incur if a Covenantor fails to comply with their obligations under section 3 or 4 is difficult to ascertain, but the parties nevertheless desire certainty in this matter. Accordingly, if a Covenantor breaches or fails to comply with any of the provisions of section 3 or 4, they shall pay Franchisor, as liquidated damages and not as a penalty, a royalty equal to 15% of the gross amount of all income, sales, salary, wages, fees, dividends, distributions, and other compensation received or earned by Covenantor or any Covered Person, or to which any of those parties becomes entitled, as the result of the breach or noncompliance. The parties further agree that the royalty required by this paragraph is reasonable in light of the damages that Franchisor will incur. This payment is not exclusive of any other remedies that Franchisor may have, including equitable remedies, attorneys' fees, and costs.
- 6. Definition of Competitive Business. "Competitive Business" means a business (i) that offers, provides or sells any of the Permitted Products or Services; or (ii) that offers, provides or sells any products or services similar to those offered as part of the Operating System; or (iii) in which Trade Secrets could be used to the disadvantage of Franchisor, Franchisee, or another Caring Transitions Franchise;

Question 28

What are the consequences if a Caring Transitions franchisee fails to maintain a positive brand image?

Accepted Answer

**System Standards.** You should understand that every detail of your franchised business will be important, not only to you, but to us and to every other Caring Transitions franchisee as well, in order to develop and maintain high and uniform operating standards based on the concepts of quality, consistency, reliability, and professionalism; increase the demand for the products and services sold by Caring Transitions franchises; and establish and maintain a reputation for offering uniform services exemplifying high customer service standards, ethical business practices, and integrity. A fundamental requirement of your joining and remaining a part of the Caring Transitions system will be your commitment to the operation of your franchise in accordance with our system standards. During the term of the franchise agreement, you must, at all times, develop, maintain, and operate your Caring Transitions franchise in full compliance with all Caring Transitions system standards, as we may modify and supplement them in the future.

We formulate our specifications and standards based on input from our management, operations personnel, and franchisees. We make modifications to our specifications and standards according to operational needs and risk and opportunity assessments. The specifications and standards are issued to you through our training program, operations manual, and our intranet Web site.

Question 29

What are the consequences if a Caring Transitions franchisee fails to meet the minimum performance standards?

Accepted Answer

ns 15.3 and 15.4 relating to post-termination competition and solicitation.
- (c) Franchisor may require that Franchisee (or its Designated Individual) attend refresher courses, seminars and other training programs from time to time. Franchisor may charge a fee for such additional or ongoing training. Franchisee shall pay all expenses incurred by Franchisee and its trainees, including, without limitation, the cost of travel, room, board and wages, and any training fee charged by Franchisor.
- 7.2 System Standards. Franchisee acknowledges and agrees that every detail of the System is important, not only to Franchisee but also to Franchisor and other Caring Transitions franchisees, in order to develop and maintain high and uniform operating standards, to increase the demand for the products and services offered by all franchisees, to establish and maintain a reputation for uniform, efficient, high quality services, and to protect the goodwill of all Caring Transitions franchises. Franchisee further acknowledges and agrees that a fundamental requirement of the System, this agreement, and other Caring Transitions franchises is adherence by all franchisees to the uniform specifications, standards, operating procedures and rules prescribed by Franchisor for the development

and operation of the franchised business (hereafter referred to as "System Standards"). Accordingly, Franchisee agrees to comply with each and every System Standard (including, by way of example and not limitation, a designated maximum or minimum for a Buyer's Premium or for other Permitted Products and Services), as periodically modified and supplemented by Franchisor in its sole and absolute discretion, during the term of this agreement. Franchisee further agrees that System Standards prescribed from time to time in the Manual, or otherwise communicated to Franchisee in writing, shall constitute provisions of this agreement as if fully set forth in this agreement. All references to this agreement include all System Standards as periodically modified.

- 7.3 Products and Services. Franchisee shall offer and sell all products and services, and only those products and services, authorized by Franchisor and specified in the Manual or as designated in writing by Franchisor ("Permitted Products and Services"). Franchisor may unilaterally add and delete products or services to or from the Permitted Products and Services at any time. Franchisor may also designate any products or services as optional for all or any subgroup of franchisees. Optional services currently include moving services. Before offering or selling any Permitted Products or Services, Franchisee shall comply with all appliable laws and other requirements and submit proof of compliance therewith to Franchisor.
- 7.4 Fixtures and Furnishings.

Question 30

What are the consequences if a Caring Transitions franchisee fails to meet the performance standards?

Accepted Answer

ns 15.3 and 15.4 relating to post-termination competition and solicitation.
- (c) Franchisor may require that Franchisee (or its Designated Individual) attend refresher courses, seminars and other training programs from time to time. Franchisor may charge a fee for such additional or ongoing training. Franchisee shall pay all expenses incurred by Franchisee and its trainees, including, without limitation, the cost of travel, room, board and wages, and any training fee charged by Franchisor.
- 7.2 System Standards. Franchisee acknowledges and agrees that every detail of the System is important, not only to Franchisee but also to Franchisor and other Caring Transitions franchisees, in order to develop and maintain high and uniform operating standards, to increase the demand for the products and services offered by all franchisees, to establish and maintain a reputation for uniform, efficient, high quality services, and to protect the goodwill of all Caring Transitions franchises. Franchisee further acknowledges and agrees that a fundamental requirement of the System, this agreement, and other Caring Transitions franchises is adherence by all franchisees to the uniform specifications, standards, operating procedures and rules prescribed by Franchisor for the development

and operation of the franchised business (hereafter referred to as "System Standards"). Accordingly, Franchisee agrees to comply with each and every System Standard (including, by way of example and not limitation, a designated maximum or minimum for a Buyer's Premium or for other Permitted Products and Services), as periodically modified and supplemented by Franchisor in its sole and absolute discretion, during the term of this agreement. Franchisee further agrees that System Standards prescribed from time to time in the Manual, or otherwise communicated to Franchisee in writing, shall constitute provisions of this agreement as if fully set forth in this agreement. All references to this agreement include all System Standards as periodically modified.

- 7.3 Products and Services. Franchisee shall offer and sell all products and services, and only those products and services, authorized by Franchisor and specified in the Manual or as designated in writing by Franchisor ("Permitted Products and Services"). Franchisor may unilaterally add and delete products or services to or from the Permitted Products and Services at any time. Franchisor may also designate any products or services as optional for all or any subgroup of franchisees. Optional services currently include moving services. Before offering or selling any Permitted Products or Services, Franchisee shall comply with all appliable laws and other requirements and submit proof of compliance therewith to Franchisor.
- 7.4 Fixtures and Furnishings. Franchisee, at its own expense, shall purchase and install, the Communication and Information System as specified in Section 7.15 below, and all fixtures, furnishings, signs, and other equipment as may be specified by the System Standards from time to time; and shall not permit the installation of any fixtures, furnishings, signs, or other equipment not conforming to the System Standards.
- 7.5 Supplier Approval.

Question 31

What are the consequences if a Caring Transitions franchisee fails to meet the System Standards described in Item 8?

Accepted Answer

**System Standards.** You should understand that every detail of your franchised business will be important, not only to you, but to us and to every other Caring Transitions franchisee as well, in order to develop and maintain high and uniform operating standards based on the concepts of quality, consistency, reliability, and professionalism; increase the demand for the products and services sold by Caring Transitions franchises; and establish and maintain a reputation for offering uniform services exemplifying high customer service standards, ethical business practices, and integrity. A fundamental requirement of your joining and remaining a part of the Caring Transitions system will be your commitment to the operation of your franchise in accordance with our system standards. During the term of the franchise agreement, you must, at all times, develop, maintain, and operate your Caring Transitions franchise in full compliance with all Caring Transitions system standards, as we may modify and supplement them in the future.

We formulate our specifications and standards based on input from our management, operations personnel, and franchisees. We make modifications to our specifications and standards according to operational needs and risk and opportunity assessments. The specifications and standards are issued to you through our training program, operations manual, and our intranet Web site.

Question 32

What are the consequences if a Caring Transitions franchisee fails to pay the royalty fees as described in Item 6?

Accepted Answer

em 6. You must pay a monthly Royalty equal to the greater of 6% of actual Gross Receipts from the prior month or the Minimum Royalty. The Minimum Royalty is \$300 a month for 12 months after the minimum royalty start date and then \$500 a month. You are not required to pay the Minimum Royalty until the fifth day of the second month following the month in which you complete the training program held at our corporate headquarters. We will extend the Minimum Royalty start date for an additional month if you comply with System Standards for opening your business (including completing a business plan and recommended marketing activities), sign a general release, and are in full compliance with the Franchise Agreement.
- 2. "Gross Receipts" means all revenue on a cash basis relating to or arising from the operation of the franchised business, prior to deducting client distributions and other costs of doing business. For example, if you sell household items in an estate sale on behalf of a client for \$1,000, you would have Gross Receipts of \$1,000 and would pay a Royalty of \$60.

Question 33

What are the consequences if a Caring Transitions franchisee violates the System Standards described in Item 8?

Accepted Answer

Except as permitted by section 1.4, 1.5, or 8.6, Franchisee shall not directly or indirectly: (i) engage in advertising, marketing, or promotional activities in, or that are directed or targeted primarily to, the protected territory of another Caring Transitions franchisee; or (ii) conduct in-person assessments, provide Permitted Products and Services, or provide products and services that compete with Permitted Products and Services, in the protected territory of any other Caring Transitions franchisee.

Any violation of any of the restrictions of this section by Franchisee will constitute a material default of this Franchise Agreement.

Within 10 days after receiving written notice of such violation, Franchisee shall remit to Franchisor all Gross Receipts earned or received from any activities prohibited by this section.

If Franchisee receives a request for services to be provided in the protected territory of another Caring Transitions franchisee, then Franchisee shall promptly notify such other franchisee of the request and provide appropriate contact information for the potential client.

Question 34

What are the consequences if a Caring Transitions franchisee violates the terms of the franchise agreement?

Accepted Answer

Except as permitted by section 1.4, 1.5, or 8.6, Franchisee shall not directly or indirectly: (i) engage in advertising, marketing, or promotional activities in, or that are directed or targeted primarily to, the protected territory of another Caring Transitions franchisee; or (ii) conduct in-person assessments, provide Permitted Products and Services, or provide products and services that compete with Permitted Products and Services, in the protected territory of any other Caring Transitions franchisee.

Any violation of any of the restrictions of this section by Franchisee will constitute a material default of this Franchise Agreement.

Within 10 days after receiving written notice of such violation, Franchisee shall remit to Franchisor all Gross Receipts earned or received from any activities prohibited by this section.

Question 35

What is the deadline for paying the Caring Transitions royalty fee as specified in Item 6?

Accepted Answer

| Name of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty fee – Notes 1 & 10 | 6% of Gross Receipts; $300 monthly minimum for 12 months; $500 monthly minimum thereafter – Note 2 | Payable by the 5th day of each month – Note 1 | Paid on Gross Receipts for preceding calendar month |

Question 36

What is the Caring Transitions definition of an 'exclusive protected territory' as described in Item 12?

Accepted Answer

l training available to you.

### ITEM 12. TERRITORY

We will grant you an exclusive protected territory delineated by postal codes. The exclusive territory you will receive for the base initial franchise fee will contain a population between 175,000 and 200,000. If the population of your territory exceeds 200,000, you must pay an additional \$500 for all or part of every 1,000 people over 200,000. There is no maximum limit on the population of your territory. The population will be determined using extrapolated census figures and a designated mapping system. You may operate from more than one location subject to our written approval.

There are no minimum sales quotas. You maintain the rights to your territory even if the population increases. If the Postal Service alters the boundary or number of the postal code(s) comprising your territory, we have the right to re-define the boundaries of your territory to correspond as nearly as possible to the original territorial border. Our decision on this matter will be final. There are no other circumstances that would permit us to modify your territorial rights.

You may not operate your franchise in another franchisee's territory, except as disclosed in this Item 12. "Operate your franchise in another franchisee's territory" means advertising, soliciting, offering, providing, or selling products or services in another franchisee's territory. The exclusivity of your territory begins once you complete our initial training program and become fully operational.

Although we are not obligated to do so under the franchise agreement, we may permit you to operate your franchise in areas outside your territory that are not part of another Caring Transitions franchisee's territory. We may, in our discretion, allow you to continue serving existing clients located in areas outside your territory after such area later becomes part of another franchisee's territory, but you must stop soliciting and serving new clients in any such area. Similarly, earlier Caring Transitions franchisees may have operated their franchises in areas that later became part of your territory; if so, they will be permitted to continue to provide services in your territory to clients they already had in your territory before you opened your franchise, but they will be prohibited from soliciting and serving any new clients in your territory once you open your franchise. In addition, we may permit you to operate in the territory of a franchisee that has been provided written notification of a default under

the franchise agreement and who has not cured the default within 30 days. In this event, the exclusivity of the defaulting franchisee's territory could, in our discretion, be suspended until the default is cured. You do not acquire any rights to any areas outside your territory and you must immediately stop operating your franchise in areas outside your territory upon notification from us.

You may not relocate the franchised business without our approval. Whether or not we would allow relocation depends on the circumstances at the time and what is in the systems' best interests, based on our business judgment. Any relocation, if approved, would be at your sole cost.

The exclusivity of your territory does not extend to customers that we identify as National Accounts. A "National Account" is business, association, or other organization with members, affiliates, policyholders, offices, stores, plants, buildings or other facilities that are not confined to the territory of a single Caring Transitions franchisee. With our prior written consent, you may service National Accounts at or from locations in another franchisee's territory. We have the exclusive right to identify customers or potential customers as National Accounts, to service National Accounts, and to award the right to service National Accounts to any Caring Transitions franchisee, in our sole and absolute discretion.

The exclusivity of your territory does not extend to "shared referral sources" (such as attorneys, bank trust departments, real estate agents and brokers, funeral homes, senior care facilities, and similar organizations) that will be shared by all franchisees in a market. Other Caring Transitions franchisees may solicit referrals from and promote their services to shared referral sources located in your territory, and you may solicit referrals from and promote your services to shared referral sources located in another franchisee's territory. We have the exclusive right to identify the shared referral sources in each market on a case-by-case basis and resolve all disputes between franchisees relating to shared referral sources. It is possible that some part or all of your territory may have previously been owned by a former franchisee. If you submit a written request to us by certified mail, return receipt requested, then we will notify you whether or not a former franchisee previously owned the exact boundaries of your territory.

We may not operate or grant another Caring Transitions franchise within your franchise territory, but nothing prohibits us from operating or granting other franchises under different trademarks or trade names within your territory. These franchises may offer some of the same services offered by Caring Transitions franchises so long as they are not "substantially similar" to a Caring Transitions franchise.

Except as provided in this Item 12, we do not reserve the right, under our principal trademarks or different trademarks, to provide competing services or to use any alternative distribution, including the Internet, within your territory. We will not solicit or accept orders inside your territory.

There are no restrictions on soliciting or accepting clients outside your territory and you may use any commercially reasonable channel of distribution, such as the Internet, telemarketing, or other direct marketing method to obtain and service clients outside your territory, other than as disclosed in this Item 12.

Your franchise agreement does not give you any option, right of first refusal, or similar right to acquire additional franchises, but you may purchase a right of first refusal to purchase an additional franchise territory. The price for a right of first refusal is \$3,000, which would be credited toward the initial franchise fee if you exercise the right of first refusal. A right of first refusal will give you the right to purchase a specific territory first if another prospective purchaser shows an interest in purchasing the territory within 1 year after you purchase the right of first refusal. You would have 7 calendar days after receipt of notice to exercise the right. Caring Transitions must receive the entire balance of the then current initial franchise fee for the right of first refusal territory by the seventh day after you receive

the notice. A right of first refusal lasts for 1 year. The right of first refusal agreement is attached to this disclosure document as Exhibit K.

We may not

Question 37

What are all the fees a Caring Transitions franchisee might pay, combining the initial fees from Item 5 and the other fees from Item 6?

Accepted Answer

The initial franchise fee for a Caring Transitions franchise is $53,900 for a territory with a population between 175,000 and 200,000.

If the population of your territory exceeds 200,000, you must pay an additional $500 for all or part of every 1,000 people over 200,000.

Your franchise agreement does not give you any option, right of first refusal, or similar right to acquire additional franchises, but you may purchase a right of first refusal to purchase an additional franchise territory. The price for a right of first refusal is $3,000, which would be credited toward the initial franchise fee if you exercise the right of first refusal.

You must pay a monthly Royalty equal to the greater of 6% of actual Gross Receipts from the prior month or the Minimum Royalty. The Minimum Royalty is $300 a month for 12 months after the minimum royalty start date and then $500 a month.

Franchisee shall pay, to the Fund established in accordance with Article 11 of this Agreement, a National Branding Fee of 2% of Franchisee's Gross Receipts for the preceding month, or $350.00 per month, whichever is greater.

Franchisee shall pay, to Franchisor or a designated third-party, a Technology Fee of $250 by the fifth day of each month, for Internet marketing, web hosting, search engine optimization, email addresses, and other technology tools mandated, provided, or developed by Franchisor.

Either we or the advertising cooperative will determine the amount of your monthly cooperative advertising contribution, but it cannot exceed 3% of your Gross Receipts unless a majority of the cooperative members agree on a higher contribution.

Payable to Caring Transitions. All fees are non-refundable.

Question 38

What are the Caring Transitions franchisee's obligations regarding compliance with all applicable laws and regulations (Item 9) and how does that relate to the ongoing operation of the business?

Accepted Answer

Franchisee shall comply with all laws, regulations and requirements of federal, state, municipal, and other governmental entities and agencies (including, without limitation, Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Family Medical Leave Act, state or local fictitious or assumed name registration requirements, wage and hour, overtime, and all other federal, state and local laws of any kind), and to obtain and maintain any and all licenses and permits required by any governmental agencies or otherwise necessary to conduct the franchised business in any jurisdiction in which it operates.

Franchisee shall submit documented proof of its compliance with any local, state or federal law or licensing regulation within five days of Franchisor's request, unless Franchisor authorizes in writing a longer period of time for Franchisee's compliance.

Franchisee agrees and acknowledges that Franchisee alone shall be responsible for compliance with the obligations under this paragraph, and that Franchisor shall have no obligation with respect to Franchisee's compliance under this paragraph.

- 7.12 Customer Dispute Resolution.

Franchisee acknowledges that customer satisfaction is essential to Franchisee's success as well as the reputation and success of the System and other Caring Transitions franchisees.

Accordingly, Franchisee agrees to: (i) use its best efforts to ensure the satisfaction of each of Franchisee's customers; (ii) use good faith in all dealings with customers, potential customers, referral sources, suppliers and creditors; (iii) respond to customer complaints in a courteous, prompt, and professional manner; (iv) use its best efforts to promptly and fairly resolve customer disputes in a mutually-agreeable manner; and (v) within seven days of receiving a request from Franchisor, provide Franchisor a written summary of the dispute.

Question 39

What are the Caring Transitions franchisee's obligations regarding compliance with data privacy laws (Item 9) and how does that relate to the protection of customer information?

Accepted Answer

ailable; or - (4) alignment, combination, blocking, erasure or destruction. - (b) Franchisee shall process any that may be collected or acquired by Franchisee, whether from clients, employees or other sources ("Franchise Data") strictly in accordance with data protection laws that may apply from time to time during the course of this agreement and, in particular: - (1) only insofar as is necessary for the purpose of performing its obligations under this agreement; - (2) in accordance with Franchisor's instructions except where to do so would infringe data protection laws or any other statutory provision that prevents Franchisee from complying with such instructions; - (3) before processing any data, inform the person to whom the data relates of (i) the purpose(s) for which any processing is to be carried out, (ii) the availability of the option to remove their personal information, and (iii) the address, telephone number and identification of Franchisee in compliance with applicable laws; - (4) obtain the approval and authorization of the person to whom the data relates for handling of their personal data; - (5) not disclose the Franchise Data to or allow access to it other than by its or Franchisor's employees and/or any third parties engaged by Franchisee to perform the obligations imposed on Franchisee by this agreement and ensure that any such employees and/or third parties execute appropriate written contractual covenants concerning the protection of the Franchise Data from unauthorized access, use or disclosure; - (6) without prejudice to any other obligations imposed upon Franchisee by this agreement, use all reasonable efforts to assist Franchisor to comply with such obligations as are imposed on the Franchisor by Data Protection Laws. - (c) Franchisor shall provide such co-operation as is reasonably required to enable Franchisee to ensure compliance with its obligations under data protection laws, including entering into such additional agreements as may be required to ensure that there are adequate safeguards for the Franchise Data and that the transfer of Franchise Data to Franchisor complies with data protection laws. - (d) Insofar as Franchisee acts as a data processor and processes any Franchise Data on its own and/or Franchisor's behalf, Franchisee shall comply with the obligations placed on a data controller by data protection laws. - (e) Without prejudice to any of Franchisee's other obligations under this agreement, Franchisor has the right to notify Franchisee from time to time of any consent (the "Consents") that Franchisor requires Franchisee to obtain from its clients or prospective clients (or other data subject) in relation to any processing of Franchise Data to be undertaken either by Franchisee or Franchisor and the manner in which the Consents are to be detailed. - (f) In order to comply with data protection laws, Franchisor may notify Franchisee from time to time of a nominated third party within who will be authorized to receive and process the Franchise Data on Franchisor's behalf. The possibility of having Franchise Data processed by a third party must also be disclosed to the person to whom the data relates. - (g) Except where the express consent of a data subject has been obtained to the processing of personal data, Franchisee shall process only such personal data as may lawfully be processed under data protection laws in the absence of such consent. - (h) Franchisee shall indemnify Franchisor against all Claims made or brought by any person (i) arising out of or alleging any failure to comply with any provision of data protection laws in relation to any Franchise Data processed by Franchisee or Franchisee's employees or agents, whether on Franchisee's behalf or as Franchisor's agent, or (ii) arising out of Franchisor's failure or alleged failure to comply with any provision of data protection laws in relation to any Franchise Data processed by Franchisor or Franchisor's employees or agents, if such failure arises as a result of Franchisee's failure to obtain Consents or otherwise comply with Franchisee's obligations under this agreement and/or data protection laws. - (i) Franchisee consents to Franchisor's use of data relating to Franchisee and/or its business, and Franchisee shall do all such things as Franchisor may require and will use (and demonstrate to Franchisor that it has used) its best efforts to obtain, and enable Franchisor to process, data relating to Franchisee's clients including (but not limited to) Franchise Data, and Franchisee agrees that Franchisor may use and process all such data as is referred to in this section 7.25 for its own business purposes, including but not limited to marketing, monitoring the growth and performance of the Franchised Business and compliance with Franchisee's obligations, comparing such data to that of other Franchisees, advising Franchisee and other Franchisees on improving their performance and business operations, and to make all such data available to third parties selected by Franchisor, including but not limited to its affiliates. - (j) Franchisee shall comply with Franchisor's standards and policies pertaining to data processing and the privacy of information about clients or other individuals. If there is a conflict between data protection laws and Franchisor's privacy standards and policies, Franchisee shall: (i) comply with the requirements of Data Protection Laws; (ii) immediately provide Franchisor with written notice of the conflict; and (iii) promptly and fully cooperate with Franchisor's counsel as Franchisor determines the most effective way, if any, to reconcile Franchisor's privacy standards and policies with data protection laws. Except for Franchisor's obligations under this section 7.25, Franchisee is solely responsible for identifying, interpreting and complying with data protection laws. Franchisee shall neither publish nor implement a privacy policy without Franchisor's prior written approval of the policy. ### ARTICLE 8 ### PROPRIETARY MARKS - 8.1 Use by Franchisee. Franchisee's right to use the Marks as granted in this agreement is limited to their use in connection with the operation of the franchised business within the Territory described in Section 1.2 and otherwise as described in this agreement and as set forth in the Manual or as may be prescribed in writing by Franchisor from time to time. Franchisee shall operate the franchised business under the trade name CARING TRANSITIONS along with any geographic appellation that Franchisor may designate.

Question 40

What are the Caring Transitions franchisee's obligations regarding compliance with environmental regulations (Item 9) and how does that relate to the ongoing operation of the business?

Accepted Answer

- 7.11 Compliance with Law.

Franchisee shall comply with all laws, regulations and requirements of federal, state, municipal, and other governmental entities and agencies (including, without limitation, Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Family Medical Leave Act, state or local fictitious or assumed name registration requirements, wage and hour, overtime, and all other federal, state and local laws of any kind), and to obtain and maintain any and all licenses and permits required by any governmental agencies or otherwise necessary to conduct the franchised business in any jurisdiction in which it operates.

Franchisee shall submit documented proof of its compliance with any local, state or federal law or licensing regulation within five days of Franchisor's request, unless Franchisor authorizes in writing a longer period of time for Franchisee's compliance.

Franchisee agrees and acknowledges that Franchisee alone shall be responsible for compliance with the obligations under this paragraph, and that Franchisor shall have no obligation with respect to Franchisee's compliance under this paragraph.

Question 41

What are the Caring Transitions franchisee's obligations regarding compliance with laws and regulations (Item 9) and how does that relate to the ongoing operation of the business?

Accepted Answer

Franchisee shall comply with all laws, regulations and requirements of federal, state, municipal, and other governmental entities and agencies (including, without limitation, Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Family Medical Leave Act, state or local fictitious or assumed name registration requirements, wage and hour, overtime, and all other federal, state and local laws of any kind), and to obtain and maintain any and all licenses and permits required by any governmental agencies or otherwise necessary to conduct the franchised business in any jurisdiction in which it operates.

Franchisee shall submit documented proof of its compliance with any local, state or federal law or licensing regulation within five days of Franchisor's request, unless Franchisor authorizes in writing a longer period of time for Franchisee's compliance.

Franchisee agrees and acknowledges that Franchisee alone shall be responsible for compliance with the obligations under this paragraph, and that Franchisor shall have no obligation with respect to Franchisee's compliance under this paragraph.

Question 42

What are the Caring Transitions franchisee's obligations regarding confidentiality (Item 9) and how does that relate to the protection of trade secrets?

Accepted Answer

Franchisee acknowledges having received access to on loan from Franchisor.
- 9.2 Confidentiality. The Manual shall at all times remain the sole property of Franchisor. Franchisee shall treat the Manual and all information contained therein as confidential and proprietary and shall use all reasonable efforts to maintain such information as secret and confidential. Franchisee shall also

ensure that its employees treat the Manual and all information contained therein as confidential and proprietary. Franchisee shall not at any time, without Franchisor's prior written consent, copy, duplicate, record, or otherwise make the same available to any unauthorized person.

9.3 Modification. Franchisor shall have the right to add to or otherwise modify the Manual from time to time to reflect changes in any of the System Standards, including policies on the Buyer's Premium, provided that no such addition or modification shall alter the Franchisee's fundamental status and rights under this agreement. Without limiting the generality of the foregoing, Franchisor has the right, during the term of this agreement, to require Franchisee to modify, upgrade, update, enhance, and/or replace all or any part of the Communication and Information System at Franchisee's expense, and Franchisee agrees to acquire (or acquire the right to use for the remainder of the term of this agreement), within 30 days after receipt of written notice from Franchisor, the modified, upgraded, updated, enhanced or replacement component or version of the Communication and Information System specified by Franchisor.

Question 43

What are the Caring Transitions franchisee's obligations regarding insurance (Item 9) and how does that relate to the ongoing operation of the business?

Accepted Answer

erms. Insurance costs will vary depending upon the location and size of your office, the number of employees and other factors, and may change from time to time due to changes in insurance rates. You must also maintain workers' compensation coverage and any other insurance that may be required by law in your territory.
- 8. The estimates listed in the above chart relate only to costs associated with the franchised business, not personal, "living," or other expenses you may have.

Question 44

What are the Caring Transitions franchisee's obligations regarding participation in training programs (Item 9) and how does that relate to the ongoing success of the business?

Accepted Answer

rvices), and the list of approved suppliers will be provided to Franchisee. ### ARTICLE 7 ### DUTIES OF FRANCHISEE ### 7.1 Training. - (a) Franchisee (or, if Franchisee is other than an individual, the Designated Individual) shall complete, to Franchisor's satisfaction, Franchisor's initial training program. Franchisor shall provide and pay for the instructors, training facilities, and training materials used in the initial training program. Franchisee shall pay all other expenses incurred by Franchisee and its trainees, including, without limitation, the cost of travel, room, board, wages and payroll taxes. If Franchisee or the Designated Individual fails to begin the training program within ninety days after the Effective Date of this agreement, then Franchisor may terminate this agreement without refunding any money paid by Franchisee. - (b) Franchisee acknowledges that the grant of the franchise under this agreement is conditioned upon the successful completion of Franchisor's initial training program by Franchisee (or, if Franchisee is other than an individual, the Designated Individual). If, during the course of the initial training program or within fifteen days thereafter, Franchisor concludes that such individual has not exhibited the aptitude, abilities, or personal characteristics necessary or desirable to successfully operate the franchised business in accordance with the System Standards, Franchisor may, in its sole discretion and judgment, cancel this agreement and all rights hereunder by giving notice to Franchisee. Upon the cancellation of this agreement pursuant to this paragraph, Franchisee shall return to Franchisor the Manual and all other materials, information, and other items that Franchisee received from Franchisor, including all copies thereof and notes thereon, and all provisions of this agreement applicable upon, or which are intended to survive, its termination shall apply, except for sections 15.3 and 15.4 relating to post-termination competition and solicitation. - (c) Franchisor may require that Franchisee (or its Designated Individual) attend refresher courses, seminars and other training programs from time to time. Franchisor may charge a fee for such additional or ongoing training. Franchisee shall pay all expenses incurred by Franchisee and its trainees, including, without limitation, the cost of travel, room, board and wages, and any training fee charged by Franchisor. - 7.2 System Standards. Franchisee acknowledges and agrees that every detail of the System is important, not only to Franchisee but also to Franchisor and other Caring Transitions franchisees, in order to develop and maintain high and uniform operating standards, to increase the demand for the products and services offered by all franchisees, to establish and maintain a reputation for uniform, efficient, high quality services, and to protect the goodwill of all Caring Transitions franchises.

Question 45

What are the Caring Transitions franchisee's obligations regarding training and development (Item 9) and how does that relate to the ongoing success of the business?

Accepted Answer

conversation fee policy at any time.

**Training.** After you sign the franchise agreement and pay the initial franchise fee, you will begin our "Onboarding Program." The Onboarding Program is a preliminary training phase that you will engage in at home. During the Onboarding Program, you will receive and read your operations manual, collect information about advertising media in your market, prepare a business plan, form a business entity to operate the franchised business, secure financing (if needed), obtain insurance, establish a bank account, and schedule your training dates. We will provide you with instructions and guidelines for the Onboarding Program and telephone support during this time.

If this is your first Caring Transitions franchise then, before you open your franchised business, we will train up to 2 people to operate the franchise. (Franchise Agreement § 7.1). All of the initial training is conducted at our corporate headquarters in Cincinnati, Ohio, by or under the supervision of our President, Ray Fabik (see Item 2 of this disclosure document for a description of Mr. Fabik's background). Mr. Fabik has overseen the training and support of our franchisees since February 2019. We do not employ a separate staff whose sole function is to train franchisees. Training is conducted by employees with various administrative and operational responsibilities and by thirdparty vendors. We may change trainers at any time. We do not charge an additional fee for the initial training, but you are responsible for paying the costs of travel, lodging, food, and compensation for you and your employees during the training program. The initial training program is mandatory—you, or the person designated as responsible for the general oversight and management of the franchised business, must begin the training program within 90 days after you sign the franchise agreement and complete it to our satisfaction, or we have the right to terminate your franchise without refunding any fees you have paid. Training programs are typically scheduled on a monthly basis subject to demand. At the present time, we do not provide or require you to attend additional training programs after your successful completion of the initial training program other than the on-site training described below, although we have the right to require additional training and to charge you a reasonable fee for it.

The agenda of our initial training program is described below.

### **TRAINING PROGRAM**

| Obligation | Section in Franchise Agreement | Item in Disclosure document |
|---|---|---|
| i. Restrictions on products/services offered | 7.3 | 16 |
| j. Warranty and customer service requirements | 7.12 | 6 |
| k. Territorial development and sales quotas | None | 12 & 17 |
| l. Ongoing product/service purchases | 7.5 | 8 |
| m. Maintenance, appearance and remodeling requirements | Not Applicable | Not Applicable |
| n. Insurance | 7.9 | 7 |
| o. Advertising | Article 11 | 8 & 11 |
| p. Indemnification | 7.9 & 7.13; Article 17 | 17 |
| q. Owner’s participation/management/ staffing | 7.6 & 15.1 | 17 |
| r. Records/reports | 7.8 & 7.15 | 17 |
| s. Inspections/audits | 7.8 | 6 &17 |
| t. Transfer | Article 12 | 17 |
| u. Renewal | 2.2 | 17 |
| v. Post-termination obligations | Article 14 | 17 |
| w. Non-competition covenants | 7.20, 15.2, 15.3 & 15.4, 15.10 | 17 |
| x. Dispute resolution | Article 16 | 17 |The instructional materials for our training program include the Operations Manual, handouts, and QuickBooks® Software. We reserve the right to extend the hours of the training program, to require additional training, or to require that training be conducted on-line. In addition, within 90 days after completing the Training Program, you are required to attend five days of on-site training at a regional location conducted by an experienced franchise owner.

Question 46

How does the Caring Transitions franchisor define 'Gross Receipts' for the purpose of calculating royalty fees in Item 6?

Accepted Answer

- 2. "Gross Receipts" means all revenue on a cash basis relating to or arising from the operation of the franchised business, prior to deducting client distributions and other costs of doing business. For example, if you sell household items in an estate sale on behalf of a client for \$1,000, you would have Gross Receipts of \$1,000 and would pay a Royalty of \$60. Gross Receipts includes all revenue from the sale of any and all goods or services whatsoever under, using, or in connection with our trademarks regardless of whether such goods or services are typically provided by Caring Transitions franchise owners and all revenue billed through the franchised bus

Question 47

How does the Caring Transitions franchisor's assistance with ongoing support (Item 11) relate to the franchisee's day-to-day operations?

Accepted Answer

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING]

**Office Visits.** Although not required to do so by the franchise agreement, we may, in our discretion, visit your office from time to time in order to provide additional operational support. Presently we do not charge you a fee for such office visits, but we reserve the right to require you to reimburse us for the cost of our travel to your office and for related expenses. (Franchise Agreement § 7.19).

**Web Site.** Although we are not required to do so by the franchise agreement, we maintain a Web site to promote our franchisees' services and the sale of our franchises and to provide contact information for Caring Transitions locations. (Franchise Agreement § 11.9). We may include your franchise contact information on a separate page on our Web site paid for by the national branding fund and on which you would be required to keep your contact information current at all times. We also may provide you with a Web site that we may require you to use in connection with the franchised business; we would retain ownership of any such Web site and would reserve the right to modify, revise, or cancel the Web site at any time. You may not establish your own Web site, Web page, blog, advertisement, or link on or to the Internet (including social networking Web sites or services such as Facebook, Twitter, etc.) or other similar services using our trademarks or otherwise in connection with the franchised business, without our prior written consent. We will provide you with an e-mail address containing our domain name, which you are required to use for all electronic communications with us and for the franchised business.

**Telephone Lines.** You must have a telephone line for incoming calls from clients that must be answered by a live person or go to a central call center. The central call center line must be provided by a vendor that we have approved. You may use only this central call center number in your advertising, stationery, and business cards. All calls to the central call center will be answered by a live person and, if appropriate, will be re-routed to a second, local telephone line that you must maintain. We will not receive revenue of any nature from your use of the central call center. You will use this local line for outgoing calls. You may procure the local telephone number from any telephone service provider.

Question 48

How does the Caring Transitions franchisor's assistance with operational support (Item 11) relate to the franchisee's day-to-day operations?

Accepted Answer

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING]

### ITEM 11. FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING

### **Except as listed below, we are not required to provide you with any assistance.**

Before you open your business, we will:

- (1) Approve or disapprove the boundaries that you submit for your franchise territory. Your territory must be a single, undivided geographic area delineated by postal code(s). If the Postal Service alters the boundary or number of the postal code(s) assigned to you, we will re-define the boundaries of your territory to correspond as nearly as possible to your original territory. Our decision on this matter will be final.
- (2) Provide written specifications and a list of suppliers for all equipment, products, services, and supplies necessary to operate your franchise. (Franchise Agreement § 6.1). You may purchase certain marketing and promotional materials from the Caring Transitions national branding fund. See Item 8 for a more detailed explanation of the requirements for purchasing equipment and supplies.
- (3) Provide you with access (via our intranet Web site) to a number of digital advertisements, layouts and images for use in various media, and a set of templates for business cards and stationery. (Franchise Agreement § 6.1).

- (4) Make available to you one copy of our operations manual, which contains mandatory and suggested specifications, standards, and procedures. (Franchise Agreement § 6.1). The manual is confidential and remains our property. You will receive digital access to the manual when you begin the initial training program. We have the right to modify the manual from time to time, but the modification cannot alter your status and rights under the franchise agreement. (Franchise Agreement § 9.3). The total number of pages in the operations manual is 266 (including 84 pages for operations, 81 pages for administration, and 98 pages for marketing and sales). The table of contents of the manual is attached to this disclosure document as Exhibit L.
- (5) Provide you with electronic access to the forms you will use to report your sales, order supplies, and otherwise communicate with us. (Franchise Agreement § 6.2).
- (6) Provide an initial training program for you and your manager. (Franchise Agreement § 6.1).

During the operation of the franchised business, we will:

**Office Visits.** Although not required to do so by the franchise agreement, we may, in our discretion, visit your office from time to time in order to provide additional operational support. Presently we do not charge you a fee for such office visits, but we reserve the right to require you to reimburse us for the cost of our travel to your office and for related expenses. (Franchise Agreement § 7.19).

**Web Site.** Although we are not required to do so by the franchise agreement, we maintain a Web site to promote our franchisees' services and the sale of our franchises and to provide contact information for Caring Transitions locations. (Franchise Agreement § 11.9). We may include your franchise contact information on a separate page on our Web site paid for by the national branding fund and on which you would be required to keep your contact information current at all times. We also may provide you with a Web site that we may require you to use in connection with the franchised business; we would retain ownership of any such Web site and would reserve the right to modify, revise, or cancel the Web site at any time. You may not establish your own Web site, Web page, blog, advertisement, or link on or to the Internet (including social networking Web sites or services such as Facebook, Twitter, etc.) or other similar services using our trademarks or otherwise in connection with the franchised business, without our prior written consent. We will provide you with an e-mail address containing our domain name, which you are required to use for all electronic communications with us and for the franchised business.

**Telephone Lines.** You must have a telephone line for incoming calls from clients that must be answered by a live person or go to a central call center. The central call center line must be provided by a vendor that we have approved. You may use only this central call center number in your advertising, stationery, and business cards. All calls to the central call center will be answered by a live person and, if appropriate, will be re-routed to a second, local telephone line that you must maintain. We will not receive revenue of any nature from your use of the central call center. You will use this local line for outgoing calls. You may procure the local telephone number from any telephone service provider.

Question 49

What is the Caring Transitions Franchisor's obligation regarding contributions to the Funds for its company-owned locations compared to franchisees?

Accepted Answer

l and marketing materials for the System and for franchisees in the System.
  - (c) Franchisor shall, for each of its company-owned locations (if any), contribute to the Funds on the same basis as assessments required of comparable franchisees within the System.
  - (d) Franchisee shall contribute to the national Fund by electronic funds transfer payable to "Caring Transitions National Branding Fund" or such other designation as Franchisor may from time to time prescribe.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)

Question 50

How does the Caring Transitions initial franchise fee (Item 5) compare to the ongoing royalty fees (Item 6) over the term of the franchise?

Accepted Answer

| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be Made |
|---|---|---|---|---|
| Initial Franchise Fee | $53,900 | See Note 1 | Upon signing of franchise agreement | Caring Transitions |

The amount of the initial franchise fee for a Caring Transitions franchise is $53,900 for a territory with a population between 175,000 and 200,000.

If the population of your territory exceeds 200,000, you must pay an additional $500 for all or part of every 1,000 people over 200,000.

Franchisee shall pay Franchisor a monthly royalty fee of 6% of Franchisee's Gross Receipts for the preceding month, or the "Minimum Royalty" (defined in subparagraph (b) below), whichever is greater. The royalty fee is solely in consideration of Franchisee's continued right to use the Marks. All Royalties are payable on or before the fifth day of each month and are based upon Franchisee's Gross Receipts of the preceding month. Franchisee is not obligated to pay the Minimum Royalty until the fifth day of the second calendar month following the month in which Franchisee or the

- (b) The Minimum Royalty is: (1) $300 a month for the first 12 months beginning on the Minimum Royalty Effective Date; and (2) $500 a month for each month thereafter.

Question 51

How does the Caring Transitions initial franchise fee (Item 5) relate to the long-term value of the franchise?

Accepted Answer

le. We presently offer a rebate program called "The Winners' Circle" for new Caring Transitions owners that meet our qualifications and that achieve certain revenue goals. For qualifying owners, we will rebate \$10,000 of the franchise fee they paid if they attain cumulative gross receipts of at least \$900,000 during the two-year period after the Commencement Date; we will rebate an additional \$10,000 of the franchise fee if they received the first rebate and attain cumulative gross receipts of at least \$1,600,000 during the three-year period after the Commencement Date; we will rebate an additional \$10,000 of the franchise fee if they received the first two rebates and attain cumulative gross receipts of at least \$2,300,000 during the four-year period after the Commencement Date; and we will rebate the remainder of the franchise fee they paid if they received the first three rebates and attain cumulative gross receipts of at least \$3,100,000 during the five-year period after the Commencement Date. The "Commencement Date" is the first day of the month following the month in which the training program for new owners is completed. If the owner fails to achieve any one of these revenue goals, then he or she will not be eligible to receive any additional rebate. To be eligible for any rebate, the owner must strictly comply with all obligations to us, including timely reporting all gross receipts and paying all royalties and fees required by the franchise agreement, must have attended all franchise system national conferences and regional conferences and all required on-site training centers, must sign a general release, and must have strictly complied with all other material terms and conditions of each agreement and instrument between us. If the Franchise Agreement is ¹ All dollar figures refer to U.S. Dollars. terminated for any reason prior to the end of its initial term, then Franchisee must return all rebates to Franchisor, if any. NOTE: The revenue goals above are not to be construed as projections or estimates of actual or potential earnings, sales, or receipts. We make no representation that you or any other Caring Transitions owner has or will be able to achieve any of the revenue goals required to receive a rebate under this program. We reserve the right to cancel or modify this rebate program at any time, but owners who have already been accepted into The Winners' Circle will be permitted to complete the prog

Question 52

How does the Caring Transitions initial franchise fee (Item 5) relate to the overall cost of starting the franchise?

Accepted Answer

- 1. The amount of the initial franchise fee for a Caring Transitions franchise is \$53,900 for a territory with a population between 175,000 and 200,000. If the population of your territory exceeds 200,000, you must pay an additional \$500 for all or part of every 1,000 people over 20

Question 53

How does the Caring Transitions initial franchise fee (Item 5) relate to the overall financial risk of the franchise?

Accepted Answer

EES You must pay an initial franchise fee[1](#page-11-0) when you sign the franchise agreement. The franchise fee for a territory with a population between 175,000 and 200,000 is \$53,900. You can reserve a specific territory for up to 30 days by paying a \$5,000 deposit and sending us a Remittance Form. The deposit is fully earned and non-refundable upon our receipt, in consideration of our reservation and removal from the market of your territory for 30 days, and will be applied toward your initial franchise fee. The required deposit to reserve a second territory is \$10,000. If the population of your territory exceeds 200,000, you must pay an additional \$500 for all or part of every 1,000 people over 200,000. For example, for a territory with a population of 206,135, the total franchise fee would be \$57,400 [\$53,900 + (7 x \$500)]. We presently offer the following discount programs: During the first 24 months after you purchase your first franchise, you may be eligible for a 10% discount on the then-current initial franchise fee for each additional franchise that you purchase. To be eligible for this discount, you must pay the entire franchise fee at the time you sign the franchise agreement for the initial franchise and for each additional franchise. We may cancel or modify this discount policy at any time. We are a member of the International Franchise Association and participate in the IFA's Veterans Transition Franchise Initiative ("VetFran Program"), which encourages franchise ownership by offering financial incentives to honorably discharged veterans of the U.S. Armed Forces. We offer a discount of up to 10% of the initial franchise fee to veterans who meet our requirements and those of the VetFran program. You may receive only one discount or referral fee on the purchase of any franchise. We currently intend to impose each initial franchise fee uniformly except as stated otherwise in this Item 5. All initial fees are nonrefundable. We presently offer a rebate program called "The Winners' Circle" for new Caring Transitions owners that meet our qualifications and that achieve certain revenue goals. For qualifying owners, we will rebate \$10,000 of the franchise fee they paid if they attain cumulative gross receipts of at least \$900,000 during the two-year period after the Commencement Date; we will rebate an additional \$10,000 of the franchise fee if they received the first rebate and attain cumulative gross receipts of at least \$1,600,000 during the three-year period after the Commencement Date; we will rebate an additional \$10,000 of the franchise fee if they received the first two rebates and attain cumulative gross receipts of at least \$2,300,000 during the four-year period after the Commencement Date; and we will rebate the remainder of the franchise fee they paid if they received the first three rebates and attain cumulative gross receipts of at least \$3,100,000 during the five-year period after the Commencement Date. The "Commencement Date" is the first day of the month following the month in which the training program for new owners is completed. If the owner fails to achieve any one of these revenue goals, then he or she will not be eligible to receive any additional rebate. To be eligible for any rebate, the owner must strictly comply with all obligations to us, including timely reporting all gross receipts and paying all royalties and fees required by the franchise agreement, must have attended all franchise system national conferences and regional conferences and all required on-site training centers, must sign a general release, and must have strictly complied with all other material terms and conditions of each agreement and instrument between us. If the Franchise Agreement is ¹ All dollar figures refer to U.S. Dollars. terminated for any reason prior to the end of its initial term, then Franchisee must return all rebates to Franchisor, if any. NOTE: The revenue goals above are not to be construed as projections or estimates of actual or potential earnings, sales, or receipts. We make no representation that you or any other Caring Transitions owner has or will be able to achieve any of the revenue goals required to receive a rebate under this program. We reserve the right to cancel or modify this rebate program at any time, but owners who have already been accepted into The Winners' Circle will be permitted to complete the program. We may cancel your franchise agreement if, at any time during or within 15 days after you (or the person designated by you as responsible for the management of the franchised business) complete the initial training program, we conclude that you have not exhibited the aptitude, abilities, or personal characteristics necessary or desirable to successfully operate a Caring Transitions franchise. The initial franchise fee for a Caring Transitions franchise is non-refundable and fully earned when we sign the franchise agreement, in consideration of administrative and other expenses we incurred in granting you the franchise and investigating your qualifications, and for our lost or deferred opportunity to franchise to oth

Question 54

How does the Caring Transitions initial franchise fee (Item 5) relate to the overall investment in the franchise?

Accepted Answer

TMENT

| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be Made |
|---|---|---|---|---|
| Initial Franchise Fee | $53,900 | See Note 1 | Upon signing of franchise agreement | Caring Transitions |
| Furniture and Equipment | $500 to 1,000 | As Incurred | Prior to commencement of business | Suppliers |
| Computer System (See | $1,000 to 3,000 | As Incurred | Prior to commencement | Suppliers |
| Note 2) |  |  | of business |  |
| Travel & living expenses | $2,000 to 4,000 | As Incurred | Prior to or at time of | Hotel, airline, restaurants, |
| while training (See Note 3) |  |  | training | employees |
| Initial Rent, Telephone, Bank and Other Deposits (See Note 4) | $350 to 2,000 | As Incurred | Prior to commencement of business | Suppliers |
| Additional Funds - 6 | $4,000 to 38,000 | As Incurred | As expenses are | Employees, taxing |
| months (See Note 5) |  |  | incurred | authorities, suppliers, etc. |
| Grand-Opening Promotion | $3,000 to 4,000 | As Incurred | 1-2 months before | National branding fund |
| (See Note 9) |  |  | opening | and/or various suppliers |
| Sales employee (See Note | $2,500 | As Incurred | As expenses are | Employee(s) |
| 13) |  |  | incurred |  |
| Web hosting service | $100 | Monthly | Upon commencement of business | Supplier |
| Monthly Office Rental | $200 to 1,000 | Monthly | Depends on lease terms | Landlord |
| Payment (See Note 6) |  |  |  |  |
| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be Made |
| Insurance (See Note 7) | $2,000 to 4,000 | (See Note 7) | Prior to effective date of policy | Insurance Company |
| Certified Relocation Transition Specialist Training and Test (See Note 10) | $650 -- 3,000 | (See Note 10) | 1-2 months before opening | Supplier |
| Membership and Association Fees (See Note 12) | $500 | As Incurred | 1-2 months before opening | The applicable membership or association |
| Estatesales.org Elite | $60 - $150 | (See Note 11) | 1 month before opening | Estatesales.org |
| Package (See Note 11) |  |  |  |  |
| Total (See Note 8) | $70,760 to $117,150 |  |  |  |### Notes to Table:

- 1. The amount of the initial franchise fee for a Caring Transitions franchise is \$53,900 for a territory with a population between 175,000 and 200,000. If the population of your territory exceeds 200,000, you must pay an additional \$500 for all or part of every 1,000 people over 200,000.
- 2. The cost of the computer equipment and software you will need to operate your franchise will depend upon the manufacturer, the operating features, whether the equipment is new or used, and whether you purchase, rent or lease it.
- 3. We do not charge an additional fee for the initial training, but you must pay the expenses of travel, lodging, food, wages, and workers' compensation for you and your employees during the training program. These expenses will range from \$750 to \$1,500, depending upon the distance and method of travel and the availability and quality of your hotel accommodations and living expenses during the training program.
- 4. You are required to maintain at least 1 dedicated telephone line for incoming calls from clients that will be answered by a live person or go to a central call center. The central call center line may be provided by a vendor designated by us. You may use only this central call center number in your advertising, stationery, and business cards. All calls to the central call center will be answered by a live person and, if appropriate, will be re-routed to a second, local telephone line that you must maintain. Your local telephone service provider will typically require a normally refundable deposit for commercial use. You must maintain a separate checking account to be used only for your business, and your bank will require a nominal (\$50 \$100) initial deposit when you open the account. Some states also require a deposit for workers' compensation coverage.
- 5.

Question 55

How does the Caring Transitions initial franchise fee (Item 5) relate to the overall profitability of the franchise?

Accepted Answer

le. We presently offer a rebate program called "The Winners' Circle" for new Caring Transitions owners that meet our qualifications and that achieve certain revenue goals. For qualifying owners, we will rebate \$10,000 of the franchise fee they paid if they attain cumulative gross receipts of at least \$900,000 during the two-year period after the Commencement Date; we will rebate an additional \$10,000 of the franchise fee if they received the first rebate and attain cumulative gross receipts of at least \$1,600,000 during the three-year period after the Commencement Date; we will rebate an additional \$10,000 of the franchise fee if they received the first two rebates and attain cumulative gross receipts of at least \$2,300,000 during the four-year period after the Commencement Date; and we will rebate the remainder of the franchise fee they paid if they received the first three rebates and attain cumulative gross receipts of at least \$3,100,000 during the five-year period after the Commencement Date. The "Commencement Date" is the first day of the month following the month in which the training program for new owners is completed. If the owner fails to achieve any one of these revenue goals, then he or she will not be eligible to receive any additional rebate. To be eligible for any rebate, the owner must strictly comply with all obligations to us, including timely reporting all gross receipts and paying all royalties and fees required by the franchise agreement, must have attended all franchise system national conferences and regional conferences and all required on-site training centers, must sign a general release, and must have strictly complied with all other material terms and conditions of each agreement and instrument between us. If the Franchise Agreement is ¹ All dollar figures refer to U.S. Dollars. terminated for any reason prior to the end of its initial term, then Franchisee must return all rebates to Franchisor, if any. NOTE: The revenue goals above are not to be construed as projections or estimates of actual or potential earnings, sales, or receipts.

Question 56

How does the Caring Transitions initial franchise fee (Item 5) relate to the overall success of the franchise?

Accepted Answer

le. We presently offer a rebate program called "The Winners' Circle" for new Caring Transitions owners that meet our qualifications and that achieve certain revenue goals. For qualifying owners, we will rebate \$10,000 of the franchise fee they paid if they attain cumulative gross receipts of at least \$900,000 during the two-year period after the Commencement Date; we will rebate an additional \$10,000 of the franchise fee if they received the first rebate and attain cumulative gross receipts of at least \$1,600,000 during the three-year period after the Commencement Date; we will rebate an additional \$10,000 of the franchise fee if they received the first two rebates and attain cumulative gross receipts of at least \$2,300,000 during the four-year period after the Commencement Date; and we will rebate the remainder of the franchise fee they paid if they received the first three rebates and attain cumulative gross receipts of at least \$3,100,000 during the five-year period after the Commencement Date. The "Commencement Date" is the first day of the month following the month in which the training program for new owners is completed. If the owner fails to achieve any one of these revenue goals, then he or she will not be eligible to receive any additional rebate. To be eligible for any rebate, the owner must strictly comply with all obligations to us, including timely reporting all gross receipts and paying all royalties and fees required by the franchise agreement, must have attended all franchise system national conferences and regional conferences and all required on-site training centers, must sign a general release, and must have strictly complied with all other material terms and conditions of each agreement and instrument between us. If the Franchise Agreement is ¹ All dollar figures refer to U.S. Dollars. terminated for any reason prior to the end of its initial term, then Franchisee must return all rebates to Franchisor, if any. NOTE: The revenue goals above are not to be construed as projections or estimates of actual or potential earnings, sales, or receipts. We make no representation that you or any other Caring Transitions owner has or will be able to achieve any of the revenue goals required to receive a rebate under this program. We reserve the right to cancel or modify this rebate program at any time, but owners who have already been accepted into The Winners' Circle will be permitted to complete the prog

Question 57

How does the Caring Transitions initial franchise fee (Item 5) relate to the potential for financial success?

Accepted Answer

le. We presently offer a rebate program called "The Winners' Circle" for new Caring Transitions owners that meet our qualifications and that achieve certain revenue goals. For qualifying owners, we will rebate \$10,000 of the franchise fee they paid if they attain cumulative gross receipts of at least \$900,000 during the two-year period after the Commencement Date; we will rebate an additional \$10,000 of the franchise fee if they received the first rebate and attain cumulative gross receipts of at least \$1,600,000 during the three-year period after the Commencement Date; we will rebate an additional \$10,000 of the franchise fee if they received the first two rebates and attain cumulative gross receipts of at least \$2,300,000 during the four-year period after the Commencement Date; and we will rebate the remainder of the franchise fee they paid if they received the first three rebates and attain cumulative gross receipts of at least \$3,100,000 during the five-year period after the Commencement Date. The "Commencement Date" is the first day of the month following the month in which the training program for new owners is completed. If the owner fails to achieve any one of these revenue goals, then he or she will not be eligible to receive any additional rebate. To be eligible for any rebate, the owner must strictly comply with all obligations to us, including timely reporting all gross receipts and paying all royalties and fees required by the franchise agreement, must have attended all franchise system national conferences and regional conferences and all required on-site training centers, must sign a general release, and must have strictly complied with all other material terms and conditions of each agreement and instrument between us. If the Franchise Agreement is ¹ All dollar figures refer to U.S. Dollars. terminated for any reason prior to the end of its initial term, then Franchisee must return all rebates to Franchisor, if any. NOTE: The revenue goals above are not to be construed as projections or estimates of actual or potential earnings, sales, or receipts. We make no representation that you or any other Caring Transitions owner has or will be able to achieve any of the revenue goals required to receive a rebate under this program. We reserve the right to cancel or modify this rebate program at any time, but owners who have already been accepted into The Winners' Circle will be permitted to complete the program.

Question 58

How does the Caring Transitions initial franchise fee (Item 5) relate to the potential for growth and expansion?

Accepted Answer

rs.

Your franchise agreement does not give you any option, right of first refusal, or similar right to acquire additional franchises, but you may purchase a right of first refusal to purchase an additional franchise territory. The price for a right of first refusal is \$3,000, which would be credited toward the initial franchise fee if you exercise the right of first refusal. A right of first refusal will give you the right to purchase a specific territory first if another prospective purchaser shows an interest in purchasing the territory within 1 year after you purchase the right of first refusal. You would have 7 calendar days after receipt of notice to exercise the right. Caring Transitions must receive the entire balance of the then current initial franchise fee for the right of first refusal territory by the seventh day after you receive the notice. A right of first refusal lasts for 1 year. The right of first refusal agreement is attached to this disclosure document as Exhibit K.

### ITEM 6. OTHER FEES

### Item 6 Table **OTHER FEES**

| Name of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty fee – Notes 1 & 10 | 6% of Gross Receipts; $300 monthly minimum for 12 months; $500 monthly minimum thereafter – Note 2 | Payable by the 5th day of each month – Note 1 | Paid on Gross Receipts for preceding calendar month |
| National branding fee – Note 4 | 2% of Gross Receipts; $350/month minimum | Payable by the 5th day of each month | Paid on Gross Receipts for the preceding month. See Item 11 of this disclosure document for an explanation of the national branding fees |
| Local Marketing | At least $399/month; 4% of Gross Receipts annually thereafter | Monthly for first 12 months; annually thereafter | You are required to spend at least $399 a month during your first 12 months of operation on local marketing with a designated supplier; 4% of Gross Receipts on an annual basis thereafter |
| Local Cooperative Advertising | Up to 3% of your Gross Receipts unless a majority of the cooperative members agree on a higher contribution – Note 3 | Monthly | If an advertising cooperative is established or operating in your area, you must contribute |
| Name of Fee | Amount | Due Date | Remarks |
| Transfer Fee – Note 1 | The greater of either $15,000 or 10% of the purchase price, plus legal and administrative costs | Prior to consummation of transfer | Payable when you sell your franchise to, among other things, cover the expenses of training the franchise purchaser;

Question 59

How does the Caring Transitions initial franchise fee (Item 5) relate to the potential for long-term growth and expansion?

Accepted Answer

rs.

Your franchise agreement does not give you any option, right of first refusal, or similar right to acquire additional franchises, but you may purchase a right of first refusal to purchase an additional franchise territory. The price for a right of first refusal is \$3,000, which would be credited toward the initial franchise fee if you exercise the right of first refusal. A right of first refusal will give you the right to purchase a specific territory first if another prospective purchaser shows an interest in purchasing the territory within 1 year after you purchase the right of first refusal. You would have 7 calendar days after receipt of notice to exercise the right. Caring Transitions must receive the entire balance of the then current initial franchise fee for the right of first refusal territory by the seventh day after you receive the notice. A right of first refusal lasts for 1 year. The right of first refusal agreement is attached to this disclosure document as Exhibit K.

### ITEM 6. OTHER FEES

### Item 6 Table **OTHER FEES**

| Name of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty fee – Notes 1 & 10 | 6% of Gross Receipts; $300 monthly minimum for 12 months; $500 monthly minimum thereafter – Note 2 | Payable by the 5th day of each month – Note 1 | Paid on Gross Receipts for preceding calendar month |
| National branding fee – Note 4 | 2% of Gross Receipts; $350/month minimum | Payable by the 5th day of each month | Paid on Gross Receipts for the preceding month. See Item 11 of this disclosure document for an explanation of the national branding fees |
| Local Marketing | At least $399/month; 4% of Gross Receipts annually thereafter | Monthly for first 12 months; annually thereafter | You are required to spend at least $399 a month during your first 12 months of operation on local marketing with a designated supplier; 4% of Gross Receipts on an annual basis thereafter |
| Local Cooperative Advertising | Up to 3% of your Gross Receipts unless a majority of the cooperative members agree on a higher contribution – Note 3 | Monthly | If an advertising cooperative is established or operating in your area, you must contribute |
| Name of Fee | Amount | Due Date | Remarks |
| Transfer Fee – Note 1 | The greater of either $15,000 or 10% of the purchase price, plus legal and administrative costs | Prior to consummation of transfer | Payable when you sell your franchise to, among other things, cover the expenses of training the franchise purchaser;

Question 60

How does the Caring Transitions initial franchise fee (Item 5) relate to the potential for long-term profitability?

Accepted Answer

le. We presently offer a rebate program called "The Winners' Circle" for new Caring Transitions owners that meet our qualifications and that achieve certain revenue goals. For qualifying owners, we will rebate \$10,000 of the franchise fee they paid if they attain cumulative gross receipts of at least \$900,000 during the two-year period after the Commencement Date; we will rebate an additional \$10,000 of the franchise fee if they received the first rebate and attain cumulative gross receipts of at least \$1,600,000 during the three-year period after the Commencement Date; we will rebate an additional \$10,000 of the franchise fee if they received the first two rebates and attain cumulative gross receipts of at least \$2,300,000 during the four-year period after the Commencement Date; and we will rebate the remainder of the franchise fee they paid if they received the first three rebates and attain cumulative gross receipts of at least \$3,100,000 during the five-year period after the Commencement Date. The "Commencement Date" is the first day of the month following the month in which the training program for new owners is completed. If the owner fails to achieve any one of these revenue goals, then he or she will not be eligible to receive any additional rebate. To be eligible for any rebate, the owner must strictly comply with all obligations to us, including timely reporting all gross receipts and paying all royalties and fees required by the franchise agreement, must have attended all franchise system national conferences and regional conferences and all required on-site training centers, must sign a general release, and must have strictly complied with all other material terms and conditions of each agreement and instrument between us. If the Franchise Agreement is ¹ All dollar figures refer to U.S. Dollars. terminated for any reason prior to the end of its initial term, then Franchisee must return all rebates to Franchisor, if any. NOTE: The revenue goals above are not to be construed as projections or estimates of actual or potential earnings, sales, or receipts. We make no representation that you or any other Caring Transitions owner has or will be able to achieve any of the revenue goals required to receive a rebate under this program. We reserve the right to cancel or modify this rebate program at any time, but owners who have already been accepted into The Winners' Circle will be permitted to complete the program. We may cancel your franchise agreement if, at any time during or within 15 days after you (or the person designated by you as responsible for the management of the franchised business) complete the initial training program, we conclude that you have not exhibited the aptitude, abilities, or personal characteristics necessary or desirable to successfully operate a Caring Transitions franchise. The initial franchise fee for a Caring Transitions franchise is non-refundable and fully earned when we sign the franchise agreement, in consideration of administrative and other expenses we incurred in granting you the franchise and investigating your qualifications, and for our lost or deferred opportunity to franchise to oth

Question 61

How does the Caring Transitions initial franchise fee (Item 5) relate to the potential return on investment?

Accepted Answer

The initial franchise fee for a Caring Transitions franchise is non-refundable and fully earned when we sign the franchise agreement, in consideration of administrative and other expenses we incurred in granting you the franchise and investigating your qualifications, and for our lost or deferred opportunity to franchise to others.

We presently offer a rebate program called "The Winners' Circle" for new Caring Transitions owners that meet our qualifications and that achieve certain revenue goals. For qualifying owners, we will rebate $10,000 of the franchise fee they paid if they attain cumulative gross receipts of at least $900,000 during the two-year period after the Commencement Date; we will rebate an additional $10,000 of the franchise fee if they received the first rebate and attain cumulative gross receipts of at least $1,600,000 during the three-year period after the Commencement Date; we will rebate an additional $10,000 of the franchise fee if they received the first two rebates and attain cumulative gross receipts of at least $2,300,000 during the four-year period after the Commencement Date; and we will rebate the remainder of the franchise fee they paid if they received the first three rebates and attain cumulative gross receipts of at least $3,100,000 during the five-year period after the Commencement Date. The "Commencement Date" is the first day of the month following the month in which the training program for new owners is completed. If the owner fails to achieve any one of these revenue goals, then he or she will not be eligible to receive any additional rebate. To be eligible for any rebate, the owner must strictly comply with all obligations to us, including timely reporting all gross receipts and paying all royalties and fees required by the franchise agreement, must have attended all franchise system national conferences and regional conferences and all required on-site training centers, must sign a general release, and must have strictly complied with all other material terms and conditions of each agreement and instrument between us.

Question 62

How does the Caring Transitions initial franchise fee (Item 5) relate to the potential for return on investment over time?

Accepted Answer

le. We presently offer a rebate program called "The Winners' Circle" for new Caring Transitions owners that meet our qualifications and that achieve certain revenue goals. For qualifying owners, we will rebate \$10,000 of the franchise fee they paid if they attain cumulative gross receipts of at least \$900,000 during the two-year period after the Commencement Date; we will rebate an additional \$10,000 of the franchise fee if they received the first rebate and attain cumulative gross receipts of at least \$1,600,000 during the three-year period after the Commencement Date; we will rebate an additional \$10,000 of the franchise fee if they received the first two rebates and attain cumulative gross receipts of at least \$2,300,000 during the four-year period after the Commencement Date; and we will rebate the remainder of the franchise fee they paid if they received the first three rebates and attain cumulative gross receipts of at least \$3,100,000 during the five-year period after the Commencement Date. The "Commencement Date" is the first day of the month following the month in which the training program for new owners is completed. If the owner fails to achieve any one of these revenue goals, then he or she will not be eligible to receive any additional rebate. To be eligible for any rebate, the owner must strictly comply with all obligations to us, including timely reporting all gross receipts and paying all royalties and fees required by the franchise agreement, must have attended all franchise system national conferences and regional conferences and all required on-site training centers, must sign a general release, and must have strictly complied with all other material terms and conditions of each agreement and instrument between us. If the Franchise Agreement is ¹ All dollar figures refer to U.S. Dollars. terminated for any reason prior to the end of its initial term, then Franchisee must return all rebates to Franchisor, if any. NOTE: The revenue goals above are not to be construed as projections or estimates of actual or potential earnings, sales, or receipts. We make no representation that you or any other Caring Transitions owner has or will be able to achieve any of the revenue goals required to receive a rebate under this program. We reserve the right to cancel or modify this rebate program at any time, but owners who have already been accepted into The Winners' Circle will be permitted to complete the prog

Question 63

What is the minimum and maximum estimated cost for furniture and equipment for a Caring Transitions franchise, according to Item 7?

Accepted Answer

| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be Made |
|---|---|---|---|---|
| Initial Franchise Fee | $53,900 | See Note 1 | Upon signing of franchise agreement | Caring Transitions |
| Furniture and Equipment | $500 to 1,000 | As Incurred | Prior to commencement of business | Suppliers |
| Computer System (See | $1,000 to 3,000 | As Incurred | Prior to commencement | Suppliers |
| Note 2) |  |  | of business |  |

Question 64

What is the minimum monthly royalty fee for a Caring Transitions franchise as stated in Item 6, and when does it increase?

Accepted Answer

em 6. You must pay a monthly Royalty equal to the greater of 6% of actual Gross Receipts from the prior month or the Minimum Royalty. The Minimum Royalty is \$300 a month for 12 months after the minimum royalty start date and then \$500 a month. You are not required to pay the Minimum Royalty until the fifth day of the second month following the month in which you complete the training program held at our corporate headquarters. We will extend the Minimum Royalty start date for an additional month if you comply with System Standards for opening your business (including completing a business plan and recommended marketing activities), sign a general release, and are in full compliance with the Franchise Agre

Caring_Transitions 2025 FDD FAQ