Is contributing to the National Branding Fund (NBF) a requirement for Caring Transitions franchisees?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company administers a national branding fund (NBF) on behalf of its franchisees. Each franchisee is required to contribute to the NBF, which is used to develop advertising and marketing materials and promote the Company's service marks and the franchisees' services on a local, regional, and national basis. All sums paid by franchisees to the NBF are maintained in an account separate from other moneys of the Franchisor. These funds are shown as restricted cash on the balance sheets as of December 31, 2024, 2023 and 2022.
The Company is deemed to be the principal in relation to the NBF and as such, advertising fund contributions and expenditures, including an allocation of depreciation expense, are reported on a gross basis in the statements of operations and cash flows.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, contributing to the National Branding Fund (NBF) is a requirement for all franchisees. The NBF is used to create advertising and marketing materials and to promote Caring Transitions' service marks, as well as the franchisees' services, on a local, regional, and national level.
The funds contributed by franchisees are kept in a separate account from Caring Transitions' other funds. The company is considered the principal concerning the NBF, and therefore, all contributions and expenditures, including depreciation expense, are reported on a gross basis in the company's statements of operations and cash flows.
For a prospective franchisee, this means that a portion of their ongoing expenses will be allocated to the NBF. These funds will be used for marketing and advertising efforts intended to benefit the entire Caring Transitions franchise system, including their individual franchise. Reviewing the financial statements will provide insight into how the NBF contributions and expenses have been managed in the past, and can help a prospective franchisee understand the potential return on investment from these contributions.