Can Caring Transitions designate specific suppliers for local marketing expenditures?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
es for the System.
11.12. Local Marketing.
- (a) Minimum Local Marketing. Franchisee shall, during the first 12 months of operation, spend at least $399 a month (the "Minimum Local Marketing Amount"). In the thirteenth month of operation and thereafter, Franchisee shall spend at least 4% of its Gross Receipts on Local Marketing on an annual basis. Local Marketing expenditures must be made directly by Franchisee and must be paid for each Territory owned by Franchisee. At Franchisor's request, Franchisee shall furnish Franchisor with an itemized report of Franchisee's Local Marketing expenditures for each month. Franchisee's failure to spend at least the Minimum Local Marketing Amount will constitute a default of this Agreement. Franchisee will have the right to cure the default by paying to the National Branding Fund, within one month after notice from Franchisor, the difference between the Minimum Local Marketing Amount for the relevant period(s) less Franchisee's actual Local Marketing expenditures for the same period(s). Franchisor reserves the right to designate suppliers for Local Marketing expenditures.
- (b) "Local Marketing" means marketing, advertising, promotion, and public relations within the Territory, and consists only of direct costs to purchase marketing materials, promotion, out-of-pocket expenses for the cost of advertising and sales promotion (including media placement charges, advertising agency fees and expenses, search engine optimization expenses, and cash payments), and such other activities and expenses as Franchisor in its discretion may specify. Franchisor may specify the types of promotional activities and costs that do not qualify as Local Marketing, including the face value of promotional coupons, cash donations, the cost of products or services donated or provided at a discou
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 retains the right to designate suppliers for franchisees' local marketing expenditures. Franchisees are required to spend a minimum amount on local marketing. For the first 12 months of operation, this amount is at least $399 per month. After the first year, franchisees must spend at least 4% of their gross receipts on local marketing annually.
Franchisees must make these local marketing expenditures directly for each territory they own. They must also provide Caring Transitions with an itemized report of these expenditures upon request. Failure to meet the minimum local marketing spending requirements constitutes a breach of the franchise agreement. However, franchisees have the option to cure this default by paying the difference to the National Branding Fund within one month of receiving notice from Caring Transitions.
Local marketing includes marketing, advertising, promotion, and public relations within the franchisee's territory. These costs include direct expenses for marketing materials, advertising, sales promotion, media placement, advertising agency fees, search engine optimization, and other activities that Caring Transitions specifies. However, Caring Transitions may also specify types of promotional activities and costs that do not qualify as local marketing, such as the face value of promotional coupons, cash donations, the cost of products or services donated to charities, National Branding Fees, and employee salaries.
This policy gives Caring Transitions significant control over how franchisees market their businesses locally. While franchisees must spend a certain amount on local marketing, Caring Transitions can influence where that money is spent by designating approved suppliers. This arrangement allows Caring Transitions to maintain brand consistency and potentially negotiate favorable rates with preferred vendors, but it also limits the franchisee's autonomy in choosing marketing strategies and vendors.