Under what condition do state-specific disclosures and riders apply to a Caring Transitions franchise?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
The following are additional disclosures and/or riders required by certain state franchise laws. A particular state's disclosures/riders only apply if you are covered by that state's franchise law.
CALIFORNIA
The following additional disclosures are required by the California Franchise Relations Act:
We will comply with all appropriate laws governing any direct financing offered by us to you, including, if applicable, the California Finance Lenders Law.
The highest interest rate allowed by law in California is 10% annually.
California Business and Professions Code Sections 20000 through 22243 provide rights to the franchisee concerning termination or non-renewal of a franchise. If the franchise agreement contains a provision that is inconsistent with the law, the law will control.
The Franchise Agreement contains a covenant not to compete that extends beyond the termination of the franchise. This provision may not be enforceable under California law.
The franchise agreement requires binding arbitration. The arbitration will occur in Hamilton County, Ohio, and the fees and expenses for arbitration shall be paid by the losing party. This provision may not be enforceable under California law. Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
The Franchise Agreement requires application of the laws of the State of Ohio. This provision may not be enforceable under California law.
Each owner of the franchise is required to execute a personal guaranty. Doing so could jeopardize the marital assets of non-owner spouses domiciled in community property states such as California.
Registration of this franchise does not constitute approval, recommendation, or endorsement by the Commissioner.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, state-specific disclosures and riders are applicable only if the prospective franchisee is subject to that particular state's franchise law. For example, the FDD includes additional disclosures required by the California Franchise Relations Act, addressing aspects such as compliance with laws governing direct financing, interest rate limits, franchisee rights concerning termination or non-renewal, enforceability of non-compete covenants, arbitration clauses, choice of law, and personal guarantees. These California-specific disclosures apply only to franchisees covered by California's franchise law.
Similarly, the FDD includes information specific to New York, such as an addition to the cover page of the Franchise Disclosure Document. This addition includes information about where prospective franchisees can find information comparing franchisors, a disclaimer that registration of the franchise by New York State does not mean that New York State recommends it or has verified the information in the Franchise Disclosure Document, and instructions for contacting the Federal Trade Commission and the appropriate state or provincial authority if anything in the Franchise Disclosure Document is untrue.
Prospective franchisees should carefully review Exhibit P, which lists state-specific additional disclosures and riders, to determine if any apply to their specific situation based on the state in which they plan to operate their Caring Transitions franchise. It is important to consult with legal counsel to fully understand the implications of these state-specific requirements.