What is the Caring Transitions Franchisor's obligation regarding advertising expenditures for each franchisee?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
determined by the Cooperative, but no later than the tenth day of each month.
- (f) For each Caring Transitions franchise operated by Franchisor or an affiliate of Franchisor in a geographical area for which a Cooperative has been established, Franchisor shall make a Cooperative Contribution on the same basis as assessments required of comparable franchisees that are members of the same Cooperative.
- (g) Cooperatives established by Franchisor are intended to be of perpetual duration. However, Franchisor maintains the right to terminate any Cooperative. Franchisor shall use any unexpended monies from the terminated Cooperative only for advertising or promotional purposes for the System.
11.12. Local Marketing.
- (a) Minimum Local Marketing. Franchisee shall, during the first 12 months of operation, spend at least $399 a month (the "Minimum Local Marketing Amount"). In the thirteenth month of operation and thereafter, Franchisee shall spend at least 4% of its Gross Receipts on Local Marketing on an annual basis. Local Marketing expenditures must be made directly by Franchisee and must be paid for each Territory owned by Franchisee. At Franchisor's request, Franchisee shall furnish Franchisor with an itemized report of Franchisee's Local Marketing expenditures for each month. Franchisee's failure to spend at least the Minimum Local Marketing Amount will constitute a default of this Agreement. Franchisee will have the right to cure the default by paying to the National Branding Fund, within one month after notice from Franchisor, the difference between the Minimum Local Marketing Amount for the relevant period(s) less Franchisee's actual Local Marketing expenditures for the same period(s). Franchis
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the franchisor's obligation regarding advertising expenditures relates to cooperatives. If Caring Transitions or its affiliate operates a franchise in an area where a cooperative has been established, Caring Transitions must make a Cooperative Contribution. This contribution is based on the same assessments required of comparable franchisees who are members of the same Cooperative.
Caring Transitions intends for these cooperatives to be perpetual; however, they retain the right to terminate any Cooperative. If a Cooperative is terminated, Caring Transitions is obligated to use any unexpended funds from that Cooperative solely for advertising or promotional purposes for the Caring Transitions system.
Franchisees are also obligated to spend on local marketing. During the first 12 months, a franchisee must spend at least $399 per month on local marketing. After the first 12 months, the franchisee must spend at least 4% of its gross receipts annually on local marketing. Failure to meet the minimum local marketing spend will constitute a default of the agreement, but can be cured by paying the difference to the National Branding Fund.