If a Caring Transitions franchisee is in a holdover period, what fee are they required to pay monthly?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
ents specifically designed for renewing franchisees.
- 2.3 Holdover Period. If Franchisee does not sign a Successor Agreement before the Expiration Date but continues to operate the Franchised Business (or a competitive business) or to otherwise accept the benefits of this Agreement after the Expiration Date, then at Franchisor's option, this Agreement may be treated either as: (i) expired as of the Expiration Date, with Franchisee thereafter operating without a license to do so and in violation of Franchisor's rights; or (ii) continued on a monthto-month basis (the "Holdover Period") until either party provides the other party with at least one month's written notice of that party's intention to terminate the Holdover Period (if the laws of the jurisdiction in which the Franchised Business or Franchisee is located require a longer notice period, the one-month period will be deemed modified to be the shortest notice period required by the applicable laws of the jurisdiction). In the latter case, all of Franchisee's obligations will remain in full force and effect during the Holdover Period as if this Agreement had not expired, and all obligations and restrictions imposed on Franchisee upon the expiration of this Agreement will be deemed to take effect
upon the termination of the Holdover Period. Except as described in this section, Franchisee has no right to continue to operate the Franchised Business after the Expiration Date. If Franchisee does not sign a Successor Agreement before the Expiration Date but Franchisor nevertheless permits Franchisee to renew the license granted under this Agreement, then Franchisee must pay to Franchisor a fee of $1,000 per month for every month of
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions's 2025 Franchise Disclosure Document, if a franchisee continues to operate the franchised business after the expiration date of the franchise agreement without signing a Successor Agreement, they may enter a holdover period. During this holdover period, the franchisee is obligated to pay Caring Transitions a fee of $1,000 per month. This fee continues for each month of the holdover period and accumulates up to the amount of Caring Transitions's then-current initial franchise fee.
This holdover provision gives Caring Transitions two options if a franchisee continues to operate after the agreement expires: treat the agreement as expired, or allow a month-to-month holdover period. If Caring Transitions chooses the latter, all of the franchisee's obligations remain in effect as if the agreement hadn't expired. This includes the monthly $1,000 fee, ensuring Caring Transitions continues to receive compensation while the franchisee operates under the brand.
For a prospective Caring Transitions franchisee, this means that failing to renew the franchise agreement on time can result in significant additional costs. The $1,000 monthly fee during the holdover period can quickly add up, especially if negotiations for a new agreement take longer than expected. It's crucial for franchisees to proactively manage the renewal process to avoid triggering this holdover provision and incurring these extra fees. Franchisees should also be aware of the notice period required to terminate the holdover period, which is at least one month, but may be longer depending on local laws.