What is the Caring Transitions franchisee's obligation regarding the National Branding Fee?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
l be determined as specified in the franchise agreement for that Franchise.
- 5.2 National Branding Fee. Franchisee shall pay, to the Fund established in accordance with Article 11 of this Agreement, a National Branding Fee of 2% of Franchisee's Gross Receipts for the preceding month, or $350.00 per month, whichever is greater. All National Branding Fees shall be payable on or before the fifth day of each month. Franchisee is not obligated to pay the National Branding Fee until the fifth day of the second calendar month immediately following the month in which Franchisee or the Designated Individual completes the initial training program required by Section 7.1, unless: (1) Franchisee has operated a Caring Transitions franchise under another franchise agreement with an effective date at least six months earlier than the Effective Date of this Agreement; or (2) Franchisee acquired the Territory from another Caring Transitions franchisee. Franchisor reserves the right to increase the amount of the National Branding Fee at any time in its sole discretion. Any increase in the National Branding Fee shall be effective thirty days after Franchisee's receipt of written notice thereof.
- 5.3 Late Payment. Franchisee shall pay (to Franchisor or to the Fund, as the case may be) a late fee of $100.00 or 10% of the amount due, whichever is greater, on any payment (including, without limitation, amounts due for Royalties, National Branding Fees, or goods or services provided by the Fund, by Franchisor or any affiliate of Franchisor) that is not received by Franchisor within five days after the due date. Franchisee shall pay to Franchisor a late fee of $100 for any Revenue Report, tax return, or other Business Record that is not received by Franchisor within five days after the due date. Any payments that are not received by Franchisor within thirty days after its due date shall bear interest at the rate of 18% per annum, or the highest rate allowed by law, whichever is lower, from the date payment is due to the date payment is received by Franchisor, regardless of any subordinate agreement that may be in effect to postpone payment.
- 5.4 Gross Receipts. The term "Gross Receipts" means all receipts (cash, credit, and all other consideration) on a cash basis by Franchisee or any spouse or child of Franchisee or its principal or guarantor: (i) in connection in any way with the operation of the franchised business or any competing business or billed through the franchised business or any competing business; (ii) from the sale of any Permitted Products or Services (as modified from time-to-time by Franchisor in accordance with this Agreement) anywhere; or (iii) from the sale of any goods or services (whether or not permitted) under, using, or in connection with the Marks. "Gross Receipts" are determined prior to distributions to clients and do not include value-added, sales, use, excise, or other taxes that are separately stated and that Franchisee is required by law to collect and does collect from clients and pays to any governmental taxing authority.
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 pay a National Branding Fee. This fee is set at 2% of the franchisee's Gross Receipts for the preceding month or $350.00 per month, whichever amount is greater. The purpose of this fee is to contribute to a fund established in accordance with Article 11 of the agreement, which is used for national branding efforts. All National Branding Fees are due on or before the fifth day of each month.
However, a new Caring Transitions franchisee is not immediately obligated to pay the National Branding Fee. The obligation begins on the fifth day of the second calendar month following the month in which the franchisee or their designated individual completes the initial training program. There are exceptions to this rule: if the franchisee has previously operated a Caring Transitions franchise under another agreement that was effective at least six months prior to the current agreement, or if the franchisee acquired the territory from another existing Caring Transitions franchisee, the fee obligation may start sooner.
Caring Transitions retains the right to increase the National Branding Fee at its discretion. Franchisees will receive written notice of any increase, which will take effect 30 days after the franchisee receives the notification. It's also important to note that late payments are subject to a penalty. If the National Branding Fee is not received within five days of the due date, the franchisee will incur a late fee of $100.00 or 10% of the amount due, whichever is greater.
Franchisees contribute to the national fund via electronic funds transfer payable to "Caring Transitions National Branding Fund" or another designation prescribed by Caring Transitions. These funds are kept in a separate account from Caring Transitions' other monies and are intended to maximize public recognition and acceptance of the Caring Transitions brand for the benefit of all franchises. The funds are used for advertising, promotional activities, public relations campaigns, and developing marketing materials for the Caring Transitions system and its franchisees.