What expenses does Caring Transitions share with related parties owned by its shareholder?

According to Caring Transitions' 2025 Franchise Disclosure Document, the company shares certain expenses with related parties owned by its shareholder. These shared expenses include phone service, utilities, office supplies, and copier costs. The company that initially pays for these expenses then bills the other related entities for their respective portions. These reimbursements are recorded within the specific expense categories to ensure accurate financial tracking.

In addition to shared expenses, Caring Transitions also engages in transactions with related parties for other services. Specifically, the company contracts with a related party for its leased employees. In 2024, 2023, and 2022, Caring Transitions incurred $3,509,876, $2,713,448, and $2,463,126, respectively, in leased employee wages and related expenses from this related party. The company also paid marketing expenses to related parties, amounting to $273,000 in 2024, $271,250 in 2023, and $271,250 in 2022.

For a prospective franchisee, it is important to understand the nature and extent of these related-party transactions. While such arrangements are not inherently problematic, they can raise questions about potential conflicts of interest or whether the franchisee is receiving services at a fair market value. It would be prudent for a potential franchisee to inquire about the terms of these related-party agreements, the process for allocating shared expenses, and whether there are alternative service providers available to ensure competitive pricing and quality.