CarePatrol Franchise

Financing Details

CarePatrol may offer direct financing to qualified franchisees under its Standard Offering, covering up to 50% of the initial franchise fee. These loans come with an annual interest rate of 10% and a repayment term of 60 months. Payments begin on the franchisee's official open date or six months from the contract date, whichever occurs first, and are collected via electronic funds transfer (ACH). CarePatrol requires a security interest in all of the franchisee's assets, including future acquisitions. Additionally, if the franchisee is a legal entity, all shareholders, members, partners, or owners, along with their spouses, must personally guarantee the debt and agree to cover all collection costs.

Litigation Summary

CarePatrol has been involved in several legal matters. Recently, in 2024, CarePatrol filed two lawsuits against former franchisees for breaching non-compete and confidentiality provisions of their agreements. Both of these cases were settled, with the former franchisees agreeing to cease competing for specific periods (12 and 18 months, respectively). An older administrative action from 2012 by the Federal Trade Commission concerned CarePatrol's website wording. The FTC objected to language that implied the company monitored care histories of many assisted living facilities in non-franchised states; CarePatrol resolved this by modifying the website wording and faced no fines or penalties. CarePatrol's affiliated brands have also had litigation. Blue Moon Franchise Systems, LLC, faced a lawsuit in 2023 for alleged material default on royalty payments and business opportunity law violations, which was settled. ComForCare Franchise Systems, LLC, is involved in multiple ongoing lawsuits from 2023 and 2024, including claims for unpaid fees, failure to provide financial records, breach of confidentiality, and a claim alleging negligent care by former franchisees (which ComForCare denies responsibility for). Another 2024 lawsuit against a ComForCare franchisee also incorrectly named affiliated companies. Additionally, administrative proceedings from 2007-2010 involved ComForCare's predecessor and Next Day Access' predecessor, where they settled allegations of selling unregistered franchises, resulting in one rescission offer and one civil penalty, respectively.

Renewal Conditions

To renew their agreement, CarePatrol franchisees must provide written notice between six and twelve months before the current term expires. They must be in good standing, meaning they have no defaults on their agreement or any other agreements with CarePatrol or its affiliates, and are current on all debt obligations. Franchisees are required to sign CarePatrol's then-current standard franchise agreement and all related documents, which may contain different or less favorable terms, but they will not pay the then-current initial franchise fee. At CarePatrol's discretion, franchisees may also be required to execute a mutual general release of claims. A renewal fee of either $7,500 for a 10-year term or $15,000 for a 15-year term is payable. If the original franchise was purchased under the Reduced Initial Fee Program, the renewal agreement will continue under the terms and fees of that program, and the franchisee cannot switch to the lower Standard Offering royalty rates.

Staffing Notes

CarePatrol franchisees must designate either a Managing Owner or a Managing Employee who is primarily responsible for the daily management and supervision of the business. This individual must be approved by CarePatrol, dedicate a minimum of 35 hours per week to the business, and successfully complete all phases of the initial training program. For franchisees operating multiple units, an additional dedicated, full-time marketer is required for each extra territory. Franchisees are solely responsible for all aspects of employee management, including hiring, firing, training, and compliance with labor laws.