Are the covenants in the Caring Transitions franchise agreement considered independent of each other?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Subparagraphs (a)(1) and (a)(2) above are severable and contain different but overlapping restrictions that shall be enforced simultaneously whenever permitted by applicable law.
If any of those subparagraphs is held to be invalid or unenforceable in any respect, then such provision is to be modified to the extent necessary to permit its enforcement, and the remaining provisions will be unaffected thereby.
Franchisee specifically acknowledges and agrees that the geographic and temporal restrictions on Franchisee's ability to compete with Franchisor and Franchisor's franchisees are reasonable and necessary to protect Franchisor's business interests in the relevant markets.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the covenants regarding post-termination competition are designed to be severable and operate independently. Specifically, the agreement outlines two main restrictions on a franchisee after the termination, expiration, or transfer of the franchise agreement:
First, for two years, franchisees cannot own, operate, or have an interest in a business offering similar services (moving management, estate liquidation, etc.) within 15 miles of their former territory or any other Caring Transitions franchise territory. Second, franchisees are prohibited from soliciting referrals for these services from shared referral sources or within the same 15-mile radius.
The FDD states that these two restrictions are severable, containing different but overlapping restrictions, and should be enforced simultaneously whenever the law permits. This means that if one restriction is deemed invalid or unenforceable, the other restriction remains in effect. The document also indicates that if any part of these restrictions is found to be invalid, it should be modified only to the extent necessary to allow enforcement, ensuring the remaining provisions are not affected.
This approach is intended to protect Caring Transitions' business interests by ensuring that franchisees cannot easily circumvent the non-compete provisions. The franchisee acknowledges that the geographic and time restrictions are reasonable and necessary to protect Caring Transitions' interests. This clause aims to provide Caring Transitions with the maximum possible protection against former franchisees competing unfairly, while also recognizing the need to comply with applicable laws regarding non-compete agreements.