What is the deadline for paying the Caring Transitions royalty fee as specified in Item 6?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
| Name of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty fee – Notes 1 & 10 | 6% of Gross Receipts; $300 monthly minimum for 12 months; $500 monthly minimum thereafter – Note 2 | Payable by the 5th day of each month – Note 1 | Paid on Gross Receipts for preceding calendar month |
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the royalty fee, which is the greater of 6% of gross receipts from the prior month or the minimum royalty, is due by the 5th day of each month. The minimum royalty is $300 a month for the first 12 months after the minimum royalty start date, and then $500 a month thereafter.
The franchisee is not required to pay the minimum royalty until the fifth day of the second month following the month in which they complete the initial training program at Caring Transitions' corporate headquarters. However, Caring Transitions may extend the minimum royalty start date for an additional month if the franchisee complies with system standards for opening their business, including completing a business plan and recommended marketing activities, signing a general release, and being in full compliance with the Franchise Agreement.
This means a prospective Caring Transitions franchisee must ensure they have sufficient cash flow to cover this ongoing royalty payment, understanding that it is calculated on the previous month's gross receipts and due relatively early in the following month. Accurately tracking and reporting gross receipts is critical, as failure to do so constitutes a breach of the agreement. Franchisees should also be aware of the conditions under which the minimum royalty payment can be deferred or extended, and the steps required to meet those conditions.