For Caring Transitions, how is the 'Commencement Date' defined in the addendum to the Franchise Agreement?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
d in this addendum.
THEREFORE, the parties hereby amend the Franchise Agreement as follows:
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- This addendum is an integral part of, and is incorporated into, the Franchise Agreement. Nevertheless, this addendum supersedes any inconsistent or conflicting provisions of the Franchise Agreement.
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- To make this addendum easier to read and understand, certain terms have been defined below and will be capitalized throughout the addendum. Capitalized terms that are not defined below may be defined in the section where they first appear. Capitalized terms used but not defined in this addendum are used as defined in the Franchise Agreement.
- (a) The "Commencement Date" is the first day of the first month following the month in which Franchisee or its Designated Individual completes the initial training program described in section 7.1 of the Franchise Agreement.
- (b) A "Year" is a one-year period beginning on the Commencement Date or the anniversary of the Commencement Date. The parties acknowledge that a "Year" as defined in this Addendum may not necessarily coincide with a calendar year. For example, a Year may be the period from April 1, 2024 through March 31, 2025, or from July 1, 2024 through June 30, 2025.
- (c) The "Rebate Period" begins on the Commencement Date and ends on the day before the fifth anniversary of the Commencement Date.
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- As an incentive for Franchisee to fully develop the Franchised Business and the Territory, if Franchisee attains:
- (a) at least $900,000 of cumulative Gross Receipts during the two-Year period after the Commencement Date, then Franchisor will rebate to Franchisee $10,000 of the Franchise Fee;
- (b) at least $1,600,000 of cumulative Gross Receipts during the three-Year period after the Commencement Date and qualified for a rebate under subparagraph (a), then Franchisor will rebate to Franchisee an addit
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the addendum to the franchise agreement defines the 'Commencement Date' as the start date for calculating certain performance milestones and rebate eligibility. Specifically, the Commencement Date is defined as the first day of the month immediately following the month in which the franchisee or their designated individual completes the initial training program.
This definition is important for Caring Transitions franchisees because it directly impacts the timeline for achieving gross receipt targets that qualify them for franchise fee rebates. For example, to receive a $10,000 rebate of the franchise fee, a franchisee must attain at least $900,000 in cumulative gross receipts during the two-year period after the Commencement Date. Subsequent rebates of $10,000 each are available for reaching $1,600,000 and $2,300,000 in cumulative gross receipts during the three-year and four-year periods after the Commencement Date, respectively. A final rebate for the remainder of the franchise fee is available if the franchisee attains $3,100,000 in cumulative gross receipts during the five-year period after the Commencement Date.
Furthermore, the addendum clarifies that a 'Year' is a one-year period beginning on the Commencement Date or its anniversary, which may not align with a calendar year. The 'Rebate Period' starts on the Commencement Date and ends the day before the fifth anniversary of the Commencement Date. Franchisees must also strictly comply with all obligations under any agreement with Caring Transitions, attend all national and regional conferences and required on-site training centers, and execute a general release prior to each rebate to be eligible for these rebates. Failure to meet these requirements or termination of the Franchise Agreement prior to the end of its initial term will result in ineligibility or the need to return any rebates received.