What happens if a Caring Transitions franchisee fails to furnish required reports?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges that its failure to accurately report Gross Receipts when due constitutes a breach of this agreement, notwithstanding the provisions of this paragraph.
- (c) Franchisor may, after providing thirty days' notice, alter the payment period for the Royalty, National Branding Fee, and any other required payments from monthly to weekly, biweekly, or such other period as Franchisor designates.
During the term of this agreement, Franchisee shall maintain and preserve, for at least six years from the date of their preparation, full, complete and accurate books and records of account, prepared in accordance with generally accepted accounting principles, and customer files and records pertaining to the franchised business granted pursuant to this agreement, all in the form and manner prescribed by Franchisor in the Manual or otherwise in writing.
In connection with its maintenance of such accounts and records, Franchisee, at its expense, shall:
- (a) Submit to Franchisor, by the 5th day of each month, a Revenue Report in the form prescribed by Franchisor and certified by Franchisee or by the Designated Individual, accurately reflecting all Gross Receipts during the preceding calendar month, together with such other data or information as Franchisor may require.
Franchisor may, after providing 30 days written notice, require the reporting of Revenue Reports to be weekly, biweekly, or at such other interval as Franchisor designates;
- (b) Submit to Franchisor, within ninety (90) days after the end of each calendar year, an income statement for the preceding calendar year, certified by Franchisee or by the Designated Individual as accurately reflecting the results of operations of the franchised business for the preceding calendar year, together with such other information as may be prescribed by Franchisor.
Franchisee's failure to do so shall constitute a breach of this agreement.
All taxes shall be paid directly to the taxing authorities prior to the delinquent date.
If Franchisee shall fail to pay any such obligations promptly as the debts to such parties become due, or if any taxes become delinquent, Franchisor, in addition to its other remedies provided in this agreement, may elect to pay any such obligation or delinquent tax on behalf of Franchisee, together with late charges, penalties and interest, if any, and Franchisee shall, upon demand, reimburse Franchisor for any sums so paid by Franchisor, together with interest at the rate of eighteen percent (18%) per annum, or the highest rate allowed by law, whichever is less, from the date of payment by Franchisor to the date of reimbursement by Franchisee.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, a franchisee's failure to accurately report Gross Receipts when due constitutes a breach of the franchise agreement. Franchisees are required to submit a Revenue Report by the 5th day of each month, accurately reflecting all Gross Receipts during the preceding calendar month, along with any other data or information that Caring Transitions may require. They must also submit an income statement within 90 days after the end of each calendar year, certified as accurately reflecting the results of operations for the preceding calendar year, along with any other information Caring Transitions prescribes. Caring Transitions may change the payment period for the Royalty, National Branding Fee, and any other required payments from monthly to weekly, biweekly, or another period they designate, after providing thirty days' notice.
In addition to reporting revenue, Caring Transitions franchisees must maintain and preserve full, complete, and accurate books and records of account, prepared according to generally accepted accounting principles, and customer files and records pertaining to the franchised business for at least six years from the date of their preparation. These records must be kept in the form and manner prescribed by Caring Transitions in the Manual or otherwise in writing.
Furthermore, if a Caring Transitions franchisee fails to pay any obligations promptly or if any taxes become delinquent, Caring Transitions may elect to pay the obligation or delinquent tax on behalf of the franchisee, along with any late charges, penalties, and interest. The franchisee must then reimburse Caring Transitions for any sums paid, together with interest at a rate of 18% per annum, or the highest rate allowed by law, whichever is less, from the date of payment by Caring Transitions to the date of reimbursement by the franchisee. This highlights the importance of maintaining accurate records and meeting all financial obligations to avoid potential penalties and intervention from the franchisor.