What is the Caring Transitions franchisee's obligation to pay suppliers and creditors?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
nishings, signs, or other equipment not conforming to the System Standards.
- 7.5 Supplier Approval. Franchisor has the right to require Franchisee to purchase all goods and services used in the franchised business solely from suppliers designated by Franchisor, which may include Franchisor or an affiliate. Franchisor has the right to condition its approval of any supplier upon benefits to Franchisor and/or its affiliates based upon purchases by Caring Transitions franchisees. Franchisor and/or its affiliates may derive income or receive benefits as a result of Franchisee's and/or other Caring Transitions franchisees' purchase of items. Franchisor has the right to require Franchisee to purchase certain goods or services exclusively from one or more designated suppliers, or to purchase cooperatively with Franchisor or other Caring Transitions franchisees in order to maintain Franchisor's quality standards or to take advantage of price discounts, benefits or other sales incentives. Franchisor and/or its affiliates have the right to receive rebates, discounts, allowances, and other payments from suppliers in respect of group purchasing programs and otherwise on account of the suppliers' dealings with Franchisee and other Caring Transitions franchisees, which Franchisor is entitled to retain and use without restriction for any purpose and without accounting to Franchisee. Franchisor has the unlimited right to change and add designated suppliers and to change the list of goods and services required to be purchased from designated suppliers at any time.
- 7.6 Business Operation. Franchisee must open the franchised business within ninety (90) days after Franchisee or Franchisee's designee completes the initial training program required by Section 7.1 above. After opening, Franchisee shall maintain the franchised business in continuous operation during the term of this agreement.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
Based on the 2025 Caring Transitions Franchise Disclosure Document, franchisees may be required to purchase goods and services from suppliers designated by Caring Transitions, which could include Caring Transitions itself or its affiliates. Caring Transitions has the right to approve suppliers based on benefits to Caring Transitions and/or its affiliates resulting from franchisee purchases. Caring Transitions and its affiliates may receive income or benefits from these purchases.
Caring Transitions can mandate that franchisees buy certain goods or services exclusively from designated suppliers or participate in cooperative purchasing arrangements with Caring Transitions or other franchisees. This is intended to maintain quality standards or take advantage of price discounts and sales incentives. Caring Transitions and its affiliates can also receive rebates, discounts, and other payments from suppliers due to these purchasing programs, which Caring Transitions can retain without needing to account to the franchisee.
Caring Transitions retains the right to change designated suppliers and the list of goods and services that must be purchased from these suppliers at any time. This gives Caring Transitions significant control over the franchisee's supply chain and purchasing decisions. Prospective franchisees should be aware that they may not have the freedom to choose their own suppliers and may be required to purchase from suppliers that benefit Caring Transitions financially.
If a franchisee wants to transfer their franchise to a new owner, all of the franchisee's outstanding monetary obligations to Caring Transitions or its affiliates, as well as any other obligations related to the franchised business, must be satisfied. The transferor's right to receive compensation from any agreement related to the purchase of the Caring Transitions franchise is secondary to Caring Transitions' right to receive any outstanding monetary obligations or other outstanding obligations from the transferor or franchisee.