What is the Caring Transitions franchisor's cost in providing CTBids.com?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
chise Agreement § 6.1).
A "buyer's premium" is a fee paid by winning bidders for items won on our online auction website, www.CTBids.com. The buyer's premium defrays our costs in providing, operating, and maintaining CTBids.com and the franchisee's costs in conducting the auction, but there are no specific restrictions on its use. It is calculated as a percentage of the winning bid. For example, if an auction is won for $50 and the buyer's premium is 18%, the winning bidder will pay a buyer's premium of $9 (that is, 18% of $50). From the buyer's premium, (a) we will receive an amount equal to 3% of the winning bid ($1.50 in the above example) during a franchisee's first two years of operation and the franchisee will receive the balance of the buyer's premium ($7.50 in the above example); (b) we will receive 4% of the winning bid during the third year of operation and the franchisee will receive the balance; (c) we will receive 5% of the winning bid during the fourth year of operation and the franchisee will receive the balance; and (d) we will receive 6% of the winning bid during the sixth through tenth years of operation and the franchisee will receive the balance. Note: this is an example only and is not to be construed as a projection or estimate of actual or potential earnings, sales or receipts. We have the right, in our sole discretion, to establish a maximum and minimum buyer's premium. Presently we intend to set a maximum and recommended buyer's premium of 18%. We reserve the right to modify this policy after providing 30 days' notice but the amount of the buyer's premium that we receive will not exceed 6% of the winning bid. We did not derive any revenue from the buyer's premiu
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 22–29)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the franchisor defrays the costs of providing, operating, and maintaining CTBids.com through a "buyer's premium," which is a fee paid by winning bidders on the online auction website. The buyer's premium is calculated as a percentage of the winning bid.
During a franchisee's first two years of operation, Caring Transitions receives 3% of the winning bid from the buyer's premium, with the franchisee receiving the balance. This increases to 4% in the third year, 5% in the fourth year, and 6% from the sixth through tenth years, with the franchisee receiving the remaining balance. For example, if an auction is won for $50 and the buyer's premium is 18%, the winning bidder pays a buyer's premium of $9 (18% of $50). From this $9, Caring Transitions would receive $1.50 (3% of $50) during the franchisee's first two years, and the franchisee would receive $7.50.
The FDD specifies that Caring Transitions did not derive any revenue from the buyer's premium in calendar year 2024. The franchisor has the right to establish a maximum and minimum buyer's premium, and presently intends to set a maximum and recommended buyer's premium of 18%.
Prospective franchisees should note that these percentages and the example provided are not projections or estimates of actual or potential earnings, sales, or receipts. Caring Transitions reserves the right to modify its buyer's premium policy after providing 30 days' notice, but the amount they receive will not exceed 6% of the winning bid.