What is the purpose of the National Branding Fee for Caring Transitions franchisees?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5.2 National Branding Fee.
Franchisee shall pay, to the Fund established in accordance with Article 11 of this Agreement, a National Branding Fee of 2% of Franchisee's Gross Receipts for the preceding month, or $350.00 per month, whichever is greater.
All National Branding Fees shall be payable on or before the fifth day of each month.
- (a) The Funds are intended to maximize general public recognition and acceptance of the Marks for the benefit of all franchises within the System or within a region, as the case may be.
Franchisor is not obligated in administering the Funds to make expenditures for Franchisee that are equivalent or proportionate to Franchisee's contribution, to ensure that any particular Franchisee benefits directly or pro rata from the placement of advertising, or to spend equal or pro rata amounts on each Caring Transitions franchisee.
(b) The Funds, all contributions thereto, and any earnings thereon, shall be used exclusively to meet any and all costs of maintaining, administering, researching, directing and preparing advertising and/or promotional activities, developing new public relations campaigns and new advertising, promotional and marketing materials for the System and for franchisees in the System.
(c) Franchisor shall, for each of its company-owned locations (if any), contribute to the Funds on the same basis as assessments required of comparable franchisees within the System.
(d) Franchisee shall contribute to the national Fund by electronic funds transfer payable to "Caring Transitions National Branding Fund" or such other designation as Franchisor may from time to time prescribe.
All sums paid by Franchisee to the Funds shall be maintained in an account separate from the other moneys of Franchisor.
Franchisee contributions may not be used to defray any of Franchisor's operating expenses, except for such reasonable salaries, overhead, and administrative, accounting, legal (including, without limitation, the defense of any claims against Franchisor and/or Franchisor's designee regarding the management of the Funds) and other costs, if any, as Franchisor may incur in activities reasonably related to the administration or direction of the Funds or advertising programs for Caring Transitions franchisees, including the costs of enforcing contributions to the Funds required under this agreement and the costs of preparing a statement of operations.
The Funds and all earnings thereof shall not otherwise inure to the benefit of Franchisor.
- (e) It is anticipated that all franchisee contributions to and earnings of the Funds will be spent for advertising and/or promotional purposes during the taxable year within which the contributions are made.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the National Branding Fee is intended to maximize public recognition and acceptance of the Caring Transitions marks. This benefits all franchises within the Caring Transitions system or within a specific region. The funds collected are used exclusively for the costs of maintaining, administering, researching, and preparing advertising and promotional activities. This includes developing new public relations campaigns and marketing materials for the Caring Transitions system and its franchisees.
The National Branding Fee is structured as 2% of the franchisee's gross receipts for the preceding month, or $350.00 per month, whichever is greater. Franchisees must pay this fee to the designated fund, typically via electronic funds transfer to "Caring Transitions National Branding Fund." These funds are kept in a separate account from Caring Transitions' other monies.
Caring Transitions may use a portion of the National Branding Fee to cover reasonable salaries, overhead, administrative, accounting, and legal costs associated with managing the funds and advertising programs. This includes the costs of enforcing contributions to the funds and preparing statements of operations. However, the funds and their earnings should not otherwise benefit Caring Transitions directly, and it is anticipated that all contributions and earnings will be spent on advertising and promotional purposes during the taxable year in which the contributions are made.
Prospective franchisees should understand that Caring Transitions is not obligated to spend amounts equivalent or proportionate to a franchisee's contribution, ensure that a franchisee benefits directly or pro rata from advertising, or spend equal amounts on each franchisee. This means that while the National Branding Fee is intended to benefit all franchisees, the actual benefits received may vary.