How does the Caring Transitions initial franchise fee (Item 5) relate to the potential for growth and expansion?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
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Your franchise agreement does not give you any option, right of first refusal, or similar right to acquire additional franchises, but you may purchase a right of first refusal to purchase an additional franchise territory. The price for a right of first refusal is $3,000, which would be credited toward the initial franchise fee if you exercise the right of first refusal. A right of first refusal will give you the right to purchase a specific territory first if another prospective purchaser shows an interest in purchasing the territory within 1 year after you purchase the right of first refusal. You would have 7 calendar days after receipt of notice to exercise the right. Caring Transitions must receive the entire balance of the then current initial franchise fee for the right of first refusal territory by the seventh day after you receive the notice. A right of first refusal lasts for 1 year. The right of first refusal agreement is attached to this disclosure document as Exhibit K.
ITEM 6. OTHER FEES
Item 6 Table OTHER FEES
| Name of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty fee – Notes 1 & 10 | 6% of Gross Receipts; $300 monthly minimum for 12 months; $500 monthly minimum thereafter – Note 2 | Payable by the 5th day of each month – Note 1 | Paid on Gross Receipts for preceding calendar month |
| National branding fee – Note 4 | 2% of Gross Receipts; $350/month minimum | Payable by the 5th day of each month | Paid on Gross Receipts for the preceding month. See Item 11 of this disclosure document for an explanation of the national branding fees |
| Local Marketing | At least $399/month; 4% of Gross Receipts annually thereafter | Monthly for first 12 months; annually thereafter | You are required to spend at least $399 a month during your first 12 months of operation on local marketing with a designated supplier; 4% of Gross Receipts on an annual basis thereafter |
| Local Cooperative Advertising | Up to 3% of your Gross Receipts unless a majority of the cooperative members agree on a higher contribution – Note 3 | Monthly | If an advertising cooperative is established or operating in your area, you must contribute |
| Name of Fee | Amount | Due Date | Remarks |
| Transfer Fee – Note 1 | The greater of either $15,000 or 10% of the purchase price, plus legal and administrative costs | Prior to consummation of transfer | Payable when you sell your franchise to, among other things, cover the expenses of training the franchise purchaser; |
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the initial franchise fee can be directly related to growth and expansion through a right of first refusal for additional territories and a rebate program based on revenue goals. The standard initial franchise fee for a Caring Transitions franchise is $53,900 for a territory with a population between 175,000 and 200,000. If the territory's population exceeds 200,000, an additional $500 is required for each increment of 1,000 people or part thereof over 200,000.
For franchisees looking to expand, Caring Transitions offers the option to purchase a right of first refusal for an additional territory for $3,000. This $3,000 is then credited towards the initial franchise fee should the franchisee exercise their right to purchase that territory within one year. This allows existing franchisees to secure future growth opportunities.
Caring Transitions also offers a rebate program called "The Winners' Circle" that incentivizes growth by rebating portions of the initial franchise fee based on cumulative gross receipts. A new Caring Transitions owner can receive a $10,000 rebate for reaching $900,000 in gross receipts within two years, another $10,000 for reaching $1,600,000 within three years, a further $10,000 for reaching $2,300,000 within four years, and the remainder of the initial franchise fee back for reaching $3,100,000 within five years. However, to be eligible for these rebates, the franchisee must comply with all obligations, including timely reporting of gross receipts, payment of royalties and fees, attendance at conferences and training, and signing a general release.