After the expiration or termination of the Caring Transitions franchise agreement, what is the geographic radius within which the franchisee is prohibited from competing?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
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15.3 Covenants After Termination of Franchise Agreement.
- (a) Except as otherwise approved in writing by Franchisor, Franchisee shall not, for a continuous and uninterrupted period commencing upon the expiration, termination, or transfer of this Agreement (regardless of the cause for termination) and continuing for two (2) years thereafter, directly or indirectly, for itself or through, on behalf of, or in conjunction with any person (including a spouse, child, parent, or sibling of Franchisee or of a principal of Franchisee), partnership, limited liability company, corporation, or other entity:
- (1) own, maintain, operate, engage in, or have any interest in any business offering moving management, estate liquidation or household liquidation services, or any other services that had been offered by the franchised business, that is or is intended to be located or which operates in or within 15 miles of the geographical boundaries of Franchisee's Territory or within 15 miles of the geographical boundaries any Caring Transitions franchisee's Territory; or
- (2) promote, sell, procure, provide or solicit referrals for, or offer to sell, procure, provide or solicit referrals for, moving management, estate liquidation or household liquidation services, any Permitted Products and Services, or any other services that are offered in the franchised business, from any Shared Referral Sources (as defined in Section 8.7 above) or in or within 15 miles of the geographical boundaries of
Franchisee's Territory or in or within 15 miles of any other Caring Transitions franchisee's Territory.
- (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.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 33)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, a franchisee is restricted from competing within a specific geographic radius after the franchise agreement expires or terminates. Specifically, for a period of two years after the agreement ends, the franchisee cannot engage in or have any interest in a business offering similar services such as moving management, estate liquidation, or household liquidation. This restriction applies within 15 miles of the geographical boundaries of the franchisee's territory.
This non-compete clause also extends to 15 miles from the geographical boundaries of any other Caring Transitions franchisee's territory. Furthermore, the franchisee is prohibited from soliciting referrals for these services from any shared referral sources within the same 15-mile radius. These restrictions apply regardless of the reason for termination, whether it be expiration, termination, or transfer of the agreement.
The FDD emphasizes that these geographic and temporal restrictions are considered reasonable and necessary to protect Caring Transitions' business interests in the relevant markets. The agreement also states that if any part of these restrictions is deemed invalid or unenforceable, the provision should be modified to allow enforcement to the extent possible, without affecting the remaining provisions. This ensures that Caring Transitions maintains its competitive edge and protects its established network of franchisees.
Prospective franchisees should carefully consider these post-termination restrictions, as they could significantly impact their ability to operate a similar business in the same area after leaving the Caring Transitions system. It is common practice in franchising to include non-compete clauses to protect the brand and existing franchisees, but the specific terms can vary widely. Therefore, understanding the scope and duration of these restrictions is crucial for making an informed investment decision.