Does the Caring Transitions agreement define what constitutes 'Shared Referral Sources'?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
to a Competitive Business or, for the benefit of a Competitive Business, have any commercial dealings with or solicit the custom of anyone who was a client of or received services from the Franchised Business at any time during the one-year period prior to the beginning of the Restrictive Period; or
- (6) except as may be authorized under another franchise agreement in effect between Franchisee (or Covenantor) and Franchisor (including a successor agreement upon the renewal of the Franchise granted under the Franchise Agreement), promote, sell, procure, provide or solicit referrals for, or offer to sell, procure, provide or solicit referrals for any Permitted Products or Services or any other products or services that are offered in the Franchised Business, from any Shared Referral Sources or in or within 15 miles of the geographical boundaries of Franchisee's or any other Caring Transitions Franchisee's Territory;
Source: Item 23 — RECEIPT (FDD pages 49–202)
What This Means (2025 FDD)
Based on the 2025 Caring Transitions Franchise Disclosure Document, the agreement does not explicitly define what constitutes 'Shared Referral Sources.' However, the document does state that franchisees are restricted from soliciting referrals for any products or services offered in the Franchised Business from any Shared Referral Sources within 15 miles of the geographical boundaries of the franchisee's territory or any other Caring Transitions franchisee's territory.
This restriction is in place unless authorized under another franchise agreement between the franchisee and Caring Transitions. This clause is part of the covenants that Covenantors (which may include the franchisee) agree to, and it survives the expiration, termination, or transfer of the agreement. The document also mentions that the franchisor can reduce the scope of any covenant without the franchisee's consent.
Because the term 'Shared Referral Sources' is not defined, a prospective franchisee should seek clarification from Caring Transitions regarding what entities or individuals are considered 'Shared Referral Sources.' Understanding the scope of this term is crucial, as violating this covenant could have legal and financial repercussions for the franchisee.