Does the Caring Transitions agreement define what constitutes 'Covered Person'?

According to Caring Transitions' 2025 Franchise Disclosure Document, the term "Covered Person" is specifically defined within the context of the franchise agreement. It includes any other person (including a spouse, child, parent, or sibling of a Covenantor). This definition is relevant to the sections outlining covenants during the term of the franchise agreement.

This definition is important because the covenants in the agreement restrict the activities of not only the franchisee (Covenantor) but also those considered a "Covered Person." This means that the franchisee's close family members are also subject to certain restrictions, such as not being able to engage in a competitive business or solicit clients of Caring Transitions. These restrictions apply while the franchise agreement is in effect.

The inclusion of family members in the definition of "Covered Person" is not uncommon in franchise agreements, as franchisors aim to prevent franchisees from circumventing non-compete clauses by involving family members in competing businesses. Prospective Caring Transitions franchisees should carefully consider the implications of this definition and ensure that their family members understand the restrictions.

If a Covenantor or any Covered Person breaches the agreement, they shall pay Caring Transitions a royalty equal to 15% of the gross amount of all income, sales, salary, wages, fees, dividends, distributions, and other compensation received or earned by Covenantor or any Covered Person, or to which any of those parties becomes entitled, as the result of the breach or noncompliance.