What is included in the definition of 'Gross Receipts' for a Caring Transitions franchise?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5.4 Gross Receipts.
The term "Gross Receipts" means all receipts (cash, credit, and all other consideration) on a cash basis by Franchisee or any spouse or child of Franchisee or its principal or guarantor: (i) in connection in any way with the operation of the franchised business or any competing business or billed through the franchised business or any competing business; (ii) from the sale of any Permitted Products or Services (as modified from time-to-time by Franchisor in accordance with this Agreement) anywhere; or (iii) from the sale of any goods or services (whether or not permitted) under, using, or in connection with the Marks. "Gross Receipts" are determined prior to distributions to clients and do not include value-added, sales, use, excise, or other taxes that are separately stated and that Franchisee is required by law to collect and does collect from clients and pays to any governmental taxing authority.
Franchisor reserves the right to require accrual accounting in determining Gross Revenues.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, "Gross Receipts" encompasses a broad range of income sources related to the franchise's operations. It includes all receipts, whether in cash, credit, or any other form of consideration, received by the franchisee, their spouse, child, principal, or guarantor. This applies to income connected to the franchised business, any competing business, or billed through either.
Specifically, Gross Receipts include proceeds from the sale of any Permitted Products or Services, regardless of where the sale occurs. It also covers income from the sale of any goods or services, whether permitted or not, that are sold under, using, or in connection with the Caring Transitions Marks. This definition ensures that all revenue streams associated with the franchise's brand and operations are included in the calculation of royalties and fees.
However, the definition of Gross Receipts for a Caring Transitions franchise does have some exclusions. It is determined prior to distributions to clients and does not include value-added, sales, use, excise, or other taxes that are separately stated. These taxes must be collected from clients and paid to a governmental taxing authority. Caring Transitions also retains the right to require accrual accounting in determining Gross Revenues, which could impact how revenue is recognized and reported.