What costs are included in the administration of the Caring Transitions Funds?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
The Funds, all contributions thereto, and any earnings thereon, shall be used exclusively to meet any and all costs of maintaining, administering, researching, directing and preparing advertising and/or promotional activities, developing new public relations campaigns and new advertising, promotional and marketing materials for the System and for franchisees in the System.
Franchisee contributions may not be used to defray any of Franchisor's operating expenses, except for such reasonable salaries, overhead, and administrative, accounting, legal (including, without limitation, the defense of any claims against Franchisor and/or Franchisor's designee regarding the management of the Funds) and other costs, if any, as Franchisor may incur in activities reasonably related to the administration or direction of the Funds or advertising programs for Caring Transitions franchisees, including the costs of enforcing contributions to the Funds required under this agreement and the costs of preparing a statement of operations.
The Funds and all earnings thereof shall not otherwise inure to the benefit of Franchisor.
It is anticipated that all franchisee contributions to and earnings of the Funds will be spent for advertising and/or promotional purposes during the taxable year within which the contributions are made.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the Funds are used to cover various costs related to advertising, promotion, and marketing activities. These costs include maintaining, administering, researching, and directing advertising and promotional efforts. They also cover the development of new public relations campaigns, advertising materials, and marketing resources for both the Caring Transitions system and its franchisees.
Franchisee contributions to the Funds may be used by Caring Transitions to cover reasonable salaries, overhead, and administrative costs. Additionally, the Funds can be used for accounting, legal expenses (including defending claims related to fund management), and other costs associated with administering the Funds or advertising programs for franchisees. This includes the costs of enforcing contributions to the Funds and preparing financial statements.
It is important to note that while franchisee contributions can be used for these administrative purposes, the Funds and their earnings cannot otherwise benefit Caring Transitions. The FDD anticipates that all franchisee contributions and earnings of the Funds will be spent on advertising and promotional purposes during the taxable year in which the contributions are made. This ensures that the primary focus of the Funds remains on promoting the Caring Transitions brand and supporting its franchisees through marketing and advertising initiatives.