When does a new Caring Transitions franchisee begin paying the Minimum Royalty?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
ARTICLE 5
PERIODIC FEES
5.1 Royalty.
(a) Franchisee shall pay Franchisor a monthly royalty fee of 6% of Franchisee's Gross Receipts for the preceding month, or the "Minimum Royalty" (defined in subparagraph (b) below), whichever is greater. The royalty fee is solely in consideration of Franchisee's continued right to use the Marks. All Royalties are payable on or before the fifth day of each month and are based upon Franchisee's Gross Receipts of the preceding month. Franchisee is not obligated to pay the Minimum Royalty until the fifth day of the second calendar month following the month in which Franchisee or the
85 All dollar figures are in United States currency.
Designated Individual completes the initial training program required by Section 7.1 (the "Minimum Royalty Effective Date"), unless (1) Franchisee has operated a Caring Transitions franchise under another franchise agreement with an effective date at least six months earlier than the Effective Date of this Agreement; or (2) Franchisee acquired the Territory from another Caring Transitions franchisee.
- (b) The Minimum Royalty is: (1) $300 a month for the first 12 months beginning on the Min
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 new franchisee is not required to pay the Minimum Royalty until the fifth day of the second calendar month following the month in which the franchisee or their designated individual completes the initial training program. This date is referred to as the "Minimum Royalty Effective Date."
The Minimum Royalty is $300 per month for the first 12 months after the Minimum Royalty Effective Date. After the first 12 months, the Minimum Royalty increases to $500 per month. These royalty payments are in exchange for the franchisee's continued right to use Caring Transitions' marks.
There are two exceptions to the standard Minimum Royalty start date. First, if the franchisee previously operated a Caring Transitions franchise under another agreement with an effective date at least six months earlier than the current agreement, they are not exempt from the Minimum Royalty. Second, if the franchisee acquired their territory from another existing Caring Transitions franchisee, they are also not exempt and must begin paying the Minimum Royalty as specified in the franchise agreement.