Under what circumstances is the Franchise Fee described in Article 4 not applicable to a Caring Transitions franchisee?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
ore the change.
ARTICLE 4
FRANCHISE FEE
Franchisee shall pay to Franchisor a "Franchise Fee" of $53,900.0085. The Franchise Fee is fully earned, due and payable to Franchisor upon the execution of this agreement, in consideration of the administrative and other expenses incurred by Franchisor in furnishing items to Franchisee as described in Article 6 and for Franchisor's lost or deferred opportunity to franchise to others. The Franchise Fee is not refundable. This Article 4 is not applicable if: (i) this agreement is a successor agreement to a prior franchise agreement or Franchisee is otherwise signing this agreement in connection with the renewal of a franchise granted under a prior franchise agreement; or (ii) Franchisee is signing
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 standard Franchise Fee of $53,900 is not applicable in specific situations. This fee covers the administrative costs and lost franchising opportunities incurred by Caring Transitions.
The Franchise Fee is waived if the agreement is a successor to a prior franchise agreement. This typically occurs when a franchisee renews their franchise agreement. It is also waived if the franchisee is signing the agreement in connection with a transfer in accordance with Article 12. This usually happens when an existing franchisee sells their franchise to a new owner, and the new owner needs to sign a new agreement.
In essence, the Franchise Fee is generally only applicable to new Caring Transitions franchisees who are starting their first franchise location under a standard franchise agreement. Existing franchisees renewing or transferring their franchise are exempt from paying this initial fee again.