What is the Caring Transitions Franchisor's responsibility in administering the national and regional advertising funds?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
at all times.
ARTICLE 11
ADVERTISING
11.1. Control of Advertising. Recognizing the value of advertising and the importance of consistency of advertising and promotion to the furtherance of the goodwill and public image of the System and the Marks, the parties agree that Franchisor shall conduct, determine, maintain, and administer all national and regional advertising funds that are or may hereafter be established pursuant to Article 11 of this
agreement, and shall have sole discretion over the concepts, materials, media, type, nature, scope, frequency, place, form, copy, layout and content of all national, regional, and local advertising.
- 11.2. National Branding Fee. As required in Section 5.2, Franchisee shall contribute a National Branding Fee to a national advertising fund established by Franchisor pursuant to Section 11.3 below. Franchisor shall, for each of its company-owned locations (if any), pay National Branding Fees on the same basis as other franchisees within the System.
- 11.3. Administration of Funds. Franchisor may establish one or more regional advertising funds and designate any geographical area as a region for establishing regional advertising funds, and/or a national advertising fund (the "Funds"), which shall be maintained and administered as follows:
- (a) The Funds are intended to maximize general public recognition and acceptance of the Marks for the benefit of all franchises within the System or within a region, as the case may be. Franchisor is not obligated in administering the Funds to make expenditures for Franchisee that are equivalent or proportionate to Franchisee's contribution, to ensure that any particular Franchisee benefits directly or pro rata from the placement of advertising, or to spend equal or pro rata amounts on each Caring Transitions franchisee.
- (b) The Funds, all contributions thereto, and any earnings thereon, shall be used exclusively to meet any and all costs of maintaining, administering, researching, directing and preparing advertising and/or promotional activities, developing new public relations campaigns and new advertising, promotional and marketing materials for the System and for franchisees in the System.
- (c) Franchisor shall, for each of its company-owned locations (if any), contribute to the Funds on the same basis as assessments required of comparable franchisees within the System.
- (d) Franchisee shall contribute to the national Fund by electronic funds transfer payable to "Caring Transitions National Branding Fund" or such other designation as Franchisor may from time to time prescribe. All sums paid by Franchisee to the Funds shall be maintained in an account separate from the other moneys of Franchisor.
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 has the responsibility of conducting, determining, maintaining, and administering all national and regional advertising funds. Caring Transitions has sole discretion over the concepts, materials, media, type, nature, scope, frequency, place, form, copy, layout, and content of all national, regional, and local advertising. The funds are intended to maximize general public recognition and acceptance of the marks for the benefit of all franchises within the Caring Transitions system or within a region.
The funds, contributions, and any earnings will be used exclusively for the costs of maintaining, administering, researching, directing, and preparing advertising and promotional activities. This also includes developing new public relations campaigns and new advertising, promotional, and marketing materials for the Caring Transitions system and its franchisees. For each company-owned location, Caring Transitions will contribute to the funds on the same basis as comparable franchisees.
All sums paid by franchisees to the funds will be maintained in a separate account from the franchisor's other monies. Franchisee contributions may not be used to defray Caring Transitions' operating expenses, except for reasonable salaries, overhead, and administrative, accounting, and legal costs related to the administration or direction of the funds or advertising programs. The funds and all earnings thereof shall not otherwise benefit the franchisor. It is anticipated that all franchisee contributions to and earnings of the funds will be spent for advertising and/or promotional purposes during the taxable year within which the contributions are made.
Caring Transitions is not obligated to make expenditures for a franchisee that are equivalent or proportionate to the franchisee's contribution. They are also not required to ensure that any particular franchisee benefits directly or pro rata from the placement of advertising, or to spend equal or pro rata amounts on each Caring Transitions franchisee. This means that while franchisees contribute to the advertising funds, there is no guarantee of direct or proportional benefit from the advertising efforts.