What is a Caring Transitions franchisee required to do to ensure the Franchisor has access to the EDT Account?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
axing authority with respect to any tax credits.
5.6 Method of Payment.
- (a) Franchisee shall make all payments to Franchisor, including Royalties, National Branding Fees, Technology Fees, interest, late fees, and legal expenses, through an electronic depository transfer account ("EDT Account") established at a national banking institution approved by Franchisor. Within two months after the Effective Date and before opening the franchised business, or at such time thereafter as Franchisor may require, Franchisee shall establish the EDT Account and execute and deliver to Franchisor an authorization for electronic funds transfer for direct debits from the EDT Account. At all times thereafter during the term of this agreement, Franchisee shall ensure that Franchisor has access to Franchisee's EDT Account for purposes of receiving electronic funds transfer payments, and Franchisee shall comply with procedures specified by Franchisor and perform such acts 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. Franchisee may not close the EDT Account without Franchisor's consent. Franchisor reserves the right to require Fr
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, franchisees are required to establish and maintain an Electronic Depository Transfer (EDT) Account for payments to the Franchisor. Within two months of the effective date of the franchise agreement, and before opening the business, the franchisee must establish this EDT Account at a national banking institution approved by Caring Transitions. They must also provide the franchisor with authorization for electronic funds transfers, allowing direct debits from the account.
Throughout the term of the franchise agreement, the franchisee must ensure that Caring Transitions has continuous access to the EDT Account for receiving electronic payments. This includes complying with any procedures specified by Caring Transitions and performing any actions necessary to facilitate payment via electronic funds transfer. The franchisee also authorizes Caring Transitions to initiate debit entries and credit correction entries to the EDT Account for various fees and expenses, such as royalties, national branding fees, technology fees, interest, late fees, and legal expenses.
Furthermore, the franchisee is responsible for maintaining sufficient funds in the EDT Account to cover their obligations as they become due. The franchisee cannot close the EDT Account without Caring Transitions' consent. If a debit is denied due to insufficient funds or account closure, the franchisee will incur a $50 charge-back fee, reimburse Caring Transitions for any related bank charges, and pay interest on the unpaid amount from the fifth day of the month the payment was due. Caring Transitions retains the right to require payments through methods other than the EDT Account.