For Caring Transitions, when must the Designated Individual be designated if the franchisee is not an individual?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
limits required by Franchisor.
7.10 Limited Liability Business Entity.
- (a) If Franchisee is a limited liability business entity (such as a corporation or limited liability company) when it signs this agreement, it must satisfy the following requirements at the time it signs this agreement:
- (1) Franchisee must be a newly organized business entity that has never operated or engaged in any business.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to the 2025 Caring Transitions Franchise Disclosure Document, if the franchisee is a limited liability business entity when signing the agreement, the franchisee must provide Caring Transitions with a list of principal owners certified by the Designated Individual at the time of signing the agreement. This list must include the full legal name, home address, home telephone number, and ownership percentage of each principal of the franchisee.
This requirement ensures that Caring Transitions knows who the principals are within the franchisee's business entity from the outset. It also confirms that a Designated Individual is in place to certify the accuracy of the provided information. This is a standard practice in franchising, as franchisors need to know who is ultimately responsible for the franchise's operations and compliance with the franchise agreement.
For a prospective Caring Transitions franchisee, this means that if you plan to operate the franchise through a corporation or LLC, you must have all your ownership and management structure in place before signing the franchise agreement. You'll need to designate an individual to certify the list of principal owners and ensure all required information is accurately documented and submitted to Caring Transitions at the time of signing.