How does the Caring Transitions initial franchise fee (Item 5) relate to the overall profitability of the franchise?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
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We presently offer a rebate program called "The Winners' Circle" for new Caring Transitions owners that meet our qualifications and that achieve certain revenue goals. For qualifying owners, we will rebate $10,000 of the franchise fee they paid if they attain cumulative gross receipts of at least $900,000 during the two-year period after the Commencement Date; we will rebate an additional $10,000 of the franchise fee if they received the first rebate and attain cumulative gross receipts of at least $1,600,000 during the three-year period after the Commencement Date; we will rebate an additional $10,000 of the franchise fee if they received the first two rebates and attain cumulative gross receipts of at least $2,300,000 during the four-year period after the Commencement Date; and we will rebate the remainder of the franchise fee they paid if they received the first three rebates and attain cumulative gross receipts of at least $3,100,000 during the five-year period after the Commencement Date. The "Commencement Date" is the first day of the month following the month in which the training program for new owners is completed. If the owner fails to achieve any one of these revenue goals, then he or she will not be eligible to receive any additional rebate. To be eligible for any rebate, the owner must strictly comply with all obligations to us, including timely reporting all gross receipts and paying all royalties and fees required by the franchise agreement, must have attended all franchise system national conferences and regional conferences and all required on-site training centers, must sign a general release, and must have strictly complied with all other material terms and conditions of each agreement and instrument between us. If the Franchise Agreement is
1 All dollar figures refer to U.S. Dollars.
terminated for any reason prior to the end of its initial term, then Franchisee must return all rebates to Franchisor, if any. NOTE: The revenue goals above are not to be construed as projections or estimates of actual or potential earnings, sales, or receipts.
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the initial franchise fee is directly tied to a rebate program called "The Winners' Circle," which allows new franchisees to recover portions or all of their initial franchise fee based on achieving certain revenue goals within specific time frames. For a territory with a population between 175,000 and 200,000, the initial franchise fee is $53,900. If the territory's population exceeds 200,000, an additional $500 is charged for every 1,000 people (or part thereof) over that threshold.
Caring Transitions offers a rebate of $10,000 of the initial franchise fee if a franchisee attains cumulative gross receipts of at least $900,000 during the two-year period after the Commencement Date. Additional rebates of $10,000 are available for reaching $1,600,000 in gross receipts within three years, $2,300,000 within four years, and $3,100,000 within five years of the Commencement Date. Achieving all these milestones would result in a full rebate of the initial franchise fee. The Commencement Date is defined as the first day of the month following the completion of the new owner's training program.
To be eligible for any rebate, the Caring Transitions franchisee must strictly comply with all obligations to the company, including timely reporting of gross receipts, paying all royalties and fees, attending all national and regional conferences and required on-site training, signing a general release, and adhering to all material terms and conditions of the agreements. Failure to meet any of the revenue goals disqualifies the franchisee from receiving further rebates. This program incentivizes franchisees to achieve high revenue and maintain compliance with the franchise agreement, directly linking the initial investment to potential profitability and adherence to system standards.