Can Caring Transitions or its affiliates derive income from a franchisee's purchases from designated suppliers?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, Caring Transitions and its affiliates may indeed derive income or receive benefits from a franchisee's purchases from designated suppliers. Caring Transitions has the right to require franchisees to purchase goods and services from suppliers they designate, which may include Caring Transitions itself or its affiliates.
Caring Transitions can also condition its approval of any supplier upon benefits accruing to Caring Transitions and/or its affiliates based on franchisee purchases. This means that the franchisor can negotiate deals with suppliers that provide direct financial benefits to the franchisor based on the volume of purchases made by Caring Transitions franchisees.
Furthermore, Caring Transitions and its affiliates have the right to receive rebates, discounts, allowances, and other payments from suppliers due to group purchasing programs or other dealings with franchisees. Caring Transitions is entitled to retain and use these payments without restriction and without having to account to the franchisee. This gives Caring Transitions significant latitude in how it manages supplier relationships and the financial benefits derived from them.
Finally, Caring Transitions has the right to change and add designated suppliers and to change the list of goods and services required to be purchased from these suppliers at any time. This allows Caring Transitions to optimize its supplier relationships and potentially increase the income or benefits it receives from these arrangements.