What fees and expenses is Caring Transitions authorized to debit from the franchisee's EDT Account?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
cts as may be necessary to accomplish payment by electronic funds transfer. Franchisee hereby authorizes Franchisor to initiate debit entries and credit correction entries to the EDT Account for payment of Royalties, National Branding Fees, Technology Fees, interest, late fees, legal expenses, and any other amounts payable to Franchisor or any affiliate of Franchisor. Franchisee shall make funds available to its EDT Account in sufficient amounts to meet its obligations as they become due. If any debit properly initiated by Franchisor from Franchisee's EDT Account is denied or charged back due to nonsufficient funds or the closing of the EDT Account, Franchisee shall (1) pay Franchisor a $50 charge-back fee, (2) reimburse Franchisor for all bank and transaction charges incurred by Franchisor as the result of the charge-back, and (3) pay interest on the unpaid amount going back to the fifth day of the month in which the payment was due.
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, franchisees are required to establish an Electronic Depository Transfer (EDT) account for payments to Caring Transitions. Caring Transitions is authorized to debit this account for various fees and expenses. These include royalties, which are either 6% of gross receipts or a minimum amount that starts at $300 per month for the first 12 months and increases to $500 per month thereafter.
Additionally, Caring Transitions can debit the EDT account for the National Branding Fee, which is 2% of gross receipts or $350 per month, whichever is greater. Other debits may include technology fees, interest, late fees, and legal expenses. If a franchisee fails to report gross receipts in a timely manner, Caring Transitions can debit the EDT account for the prescribed fee, plus 125% of the royalty and national branding fee from the prior reporting period.
Furthermore, if Caring Transitions takes over the operation of a franchised business due to the franchisee's default, Caring Transitions can debit the EDT account for a management fee of $500 per day, along with all reasonable expenses incurred during the operation of the business. The franchisee is responsible for ensuring sufficient funds are available in the EDT account to cover these obligations. Any denied debit will result in a $50 charge-back fee, reimbursement for bank charges, and interest on the unpaid amount.