According to the Caring Transitions franchise agreement, how should payments be made?

• 5.1 Royalty.

(a) 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

⁸⁵ All dollar figures are in United States currency.

Designated Individual completes the initial training program required by Section 7.1 (the "Minimum Royalty Effective Date"), unless (1) Franchisee has operated a Caring Transitions franchise under another franchise agreement with an effective date at least six months earlier than the Effective Date of this Agreement; or (2) Franchisee acquired the Territory from another Caring Transitions franchisee.

• (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.

• 5.2 National Branding Fee.

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.

All National Branding Fees shall be payable on or before the fifth day of each month.

• 5.7 Technology Fee. 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. Franchisee shall be required to pay the Technology Fee beginning on the fifth day of the third month following the month in which Franchisee or the Designated Individual completes the initial training program required by Section 7.1, unless (1) Franchisee has operated a franchise under another franchise agreement with an effective date at least six months earlier than the Effective Date; or (2) Franchisee acquired the Territory from another Caring Transitions franchisee, in which case the Fee is required immediately. We reserve the right to increase the Fee after providing 30 days written notice.

(c) Franchisor may, after providing thirty days' notice, alter the payment period for the Royalty, National Branding Fee, and any other required payments from monthly to weekly, biweekly, or such other period as Franchisor designates. Franchisee acknowledges that its failure to accurately report Gross Receipts when due constitutes a breach of this agreement, notwithstanding the provisions of this paragraph.

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