What happens to excess amounts remaining in the Caring Transitions Funds at the end of the taxable year?

According to Caring Transitions' 2025 Franchise Disclosure Document, 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. However, if excess amounts remain in the Funds at the end of such taxable year, all expenditures in the following taxable year(s) shall be made first out of accumulated earnings from previous years, next out of earnings in the current year, and finally from contributions.

This means that Caring Transitions franchisees' contributions to the National Branding Fund are intended to be used in the same year they are collected. If there is a surplus, the funds are carried over and used in subsequent years, with priority given to using accumulated earnings before tapping into current-year contributions. This ensures that franchisees' contributions are used efficiently for advertising and promotional activities.

This policy benefits franchisees by ensuring that all contributions are used for their intended purpose, which is to promote the Caring Transitions brand and support the franchise system. By prioritizing the use of accumulated earnings, Caring Transitions aims to minimize the need to draw on current-year contributions, potentially reducing the financial burden on franchisees in the future. Prospective franchisees should consider this aspect as a positive factor, as it demonstrates the franchisor's commitment to managing the funds responsibly and maximizing their impact on brand awareness and business growth.