How does the Caring Transitions royalty fee in Item 6 compare to the initial franchise fee in Item 5?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
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 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 charged for every 1,000 people (or part thereof) over that threshold. In contrast, the royalty fee is ongoing and consists of 6% of gross receipts, with a minimum monthly payment.
Specifically, the minimum royalty is $300 per month for the first 12 months after the minimum royalty start date, and then $500 per month thereafter. This minimum royalty payment is due starting on the fifth day of the second month after completing the initial training program. However, Caring Transitions may extend the minimum royalty start date by an additional month if the franchisee meets certain system standards for opening their business, signs a general release, and is in full compliance with the Franchise Agreement.
In effect, the initial franchise fee is a one-time upfront cost, while the royalty fee is an ongoing monthly expense. The royalty fee's actual cost will depend on the franchisee's gross receipts, but it will always be at least the minimum royalty amount. A prospective franchisee should consider both the initial investment and the continuing royalty obligations when evaluating the financial feasibility of a Caring Transitions franchise.