What events trigger the start of the Restrictive Period for a Caring Transitions franchise?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
Each Covenantor agrees that he or she shall not, for a continuous and uninterrupted period commencing upon the earlier of:
- (i) the expiration of the Franchise Agreement,
- (ii) the termination (regardless of the cause) of the Franchise Agreement, or
- (iii) the termination of Covenantor's relationship with Franchisee (as defined in section 4(d)) for any reason,
and ending on the second anniversary thereof (the "Restrictive Period"), directly or indirectly, for him/herself or through, on behalf of, or in conjunction with a Covered Person:
- (1) 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), own, maintain, operate, engage in, or have any interest in a Competitive Business that is or is intended to be located, or that operates, in or within 15 miles of the geographical boundaries of Franchisee's Territory; or
- (2) 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), own, maintain, operate, engage in, or have any interest in a Competitive Business that is or is intended to be located, or that operates, in or within 15 miles of the geographical boundaries of any other Caring Transitions Franchisee's protected territory; or
(3) be employed by, or be engaged on a self-employed basis in, a Competitive Business that is or is intended to be located, or that operates, in or within 15 miles of the geographical boundaries of Franchisee's Territory; or
(4) be employed by, or be engaged on a self-employed basis in, a Competitive Business that is or is intended to be located, or that operates, in or within 15 miles of the geographical boundaries of any other Caring Transitions Franchisee's protected territory; or
(5) divert or attempt to divert any business or client of the Franchised Business 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
Source: Item 23 — RECEIPT (FDD pages 49–202)
What This Means (2025 FDD)
According to the 2025 Caring Transitions Franchise Disclosure Document, the Restrictive Period for a Covenantor (which includes the franchisee, their owners, officers, directors, or managers) begins upon the earliest of three events: the expiration of the Franchise Agreement, the termination of the Franchise Agreement (regardless of the cause), or the termination of the Covenantor's relationship with the franchisee for any reason. This Restrictive Period lasts for a continuous and uninterrupted period of two years.
During this two-year Restrictive Period, the Covenantor is restricted from engaging in activities that could harm the Caring Transitions business. These restrictions include owning, operating, or having an interest in a Competitive Business within 15 miles of the franchisee's territory or any other Caring Transitions franchisee's protected territory, being employed by or engaged in a Competitive Business within those same distances, diverting business or clients from the Franchised Business to a Competitive Business, or having commercial dealings with anyone who was a client of the Franchised Business during the one-year period prior to the start of the Restrictive Period.
These covenants are designed to protect Caring Transitions's business interests and the interests of its franchisees by preventing former franchisees or related parties from using confidential information or relationships gained during their time with Caring Transitions to compete against the system. The FDD also specifies that the time period of the restrictive covenant will be stayed during any violation or breach of its terms.
It is important for prospective franchisees to understand these restrictions and how they might impact their future business activities if they decide to leave the Caring Transitions system. Franchisees should seek legal counsel to fully understand the implications of these covenants before signing the Franchise Agreement.