What is the duration of the nonsolicitation covenant for Caring Transitions customers and shared referral sources after termination?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not, directly or indirectly, for itself or through, on behalf of, or in conjunction with any person or entity for a continuous and uninterrupted period commencing upon the expiration or termination of this agreement (regardless of the cause for termination) and continuing for two years thereafter, directly or indirectly: (i) solicit or sell products or services to any person who was a customer of the franchised business at any time during the term of this agreement; or (ii) promote or solicit referrals for estate liquidation or household liquidation services or moving management services, any Permitted Products and Services, or any other services that had been offered by the franchised business, from any Shared Referral Source (as defined in Section 1.5 above) located in the Territory.
The two-year time period referred to in this paragraph will be stayed during any violation or breach of the terms of this paragraph.
The covenants in this paragraph will survive the expiration, termination or cancellation of this agreement.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, a franchisee is restricted from soliciting Caring Transitions' customers and shared referral sources for two years after the termination of the franchise agreement. This restriction applies regardless of the reason for termination. The two-year period is continuous and uninterrupted, but it will be paused during any violation of the nonsolicitation terms. These covenants remain in effect even after the franchise agreement expires or is terminated.
Specifically, the franchisee cannot directly or indirectly solicit or sell products or services to anyone who was a customer of the franchised business during the agreement's term. Additionally, the franchisee is prohibited from promoting or soliciting referrals for estate liquidation, household liquidation services, moving management services, or any other services offered by the franchised business from any Shared Referral Source within the territory.
This means that upon leaving the Caring Transitions system, a former franchisee must avoid actively pursuing business from former customers or referral partners for two years. This restriction is designed to protect Caring Transitions' customer relationships and referral networks, ensuring that departing franchisees do not unfairly compete using the goodwill and connections established during their time with the franchise. Prospective franchisees should carefully consider the implications of this non-solicitation clause, especially if they plan to remain in the same industry after leaving the Caring Transitions system.