What is Caring Transitions' recourse if a franchisee's taxes become delinquent?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee's failure to do so shall constitute a breach of this agreement. All taxes shall be paid directly to the taxing authorities prior to the delinquent date. If Franchisee shall fail to pay any such obligations promptly as the debts to such parties become due, or if any taxes become delinquent, Franchisor, in addition to its other remedies provided in this agreement, may elect to pay any such obligation or delinquent tax on behalf of Franchisee, together with late charges, penalties and interest, if any, and Franchisee shall, upon demand, reimburse Franchisor for any sums so paid by Franchisor, together with interest at the rate of eighteen percent (18%) per annum, or the highest rate allowed by law, whichever is less, from the date of payment by Franchisor to the date of reimbursement by Franchisee.
- 7.8 Records.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, franchisees are expected to pay all taxes to the taxing authorities before the delinquent date. Failure to do so constitutes a breach of the franchise agreement.
If a Caring Transitions franchisee fails to pay their taxes on time, Caring Transitions has the option to pay the delinquent taxes on behalf of the franchisee. This includes any late charges, penalties, and interest that may have accrued.
If Caring Transitions pays the franchisee's delinquent taxes, the franchisee is obligated to reimburse Caring Transitions for the full amount paid. Additionally, the franchisee must pay interest on the reimbursed amount. The interest rate is set at eighteen percent (18%) per annum, or the highest rate allowed by law, whichever is less, calculated from the date Caring Transitions made the payment to the date they receive reimbursement from the franchisee. This ensures that Caring Transitions can recover the costs and any associated financial losses incurred by covering the franchisee's tax obligations.