Within what timeframe after the effective date must a Caring Transitions franchisee establish the EDT Account?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
Within two months after the Effective Date and before opening the franchised business, or at such time thereafter as Franchisor may require, Franchisee shall establish the EDT Account and execute and deliver to Franchisor an authorization for electronic funds transfer for direct debits from the EDT Account.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions's 2025 Franchise Disclosure Document, a franchisee is required to establish an electronic depository transfer account (EDT Account) within two months after the effective date of the franchise agreement. This account must be set up before the franchisee begins operating their Caring Transitions business.
The EDT Account is used for making payments to Caring Transitions, including royalties, national branding fees, technology fees, and other expenses. The franchisee must also authorize Caring Transitions to make direct debits from this account for these payments. Maintaining access to the EDT Account for Caring Transitions is an ongoing requirement throughout the term of the franchise agreement.
It is important for prospective Caring Transitions franchisees to understand this requirement, as failure to establish the EDT Account within the specified timeframe or to maintain sufficient funds in the account can result in penalties, such as a $50 charge-back fee and interest on unpaid amounts. The franchisee cannot close the EDT Account without Caring Transitions's consent, highlighting the importance of this account for managing financial transactions between the franchisee and franchisor.