After the expiration or termination of the Caring Transitions franchise agreement, for how long is the franchisee prohibited from competing?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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.
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's 2025 Franchise Disclosure Document, a franchisee is restricted from competing for two years after the franchise agreement expires or terminates. This non-compete clause prevents the franchisee from directly or indirectly engaging in businesses that offer moving management, estate liquidation, or household liquidation services, or any services previously offered by the franchised business. This restriction applies within the franchisee's territory and extends to a 15-mile radius around any Caring Transitions franchisee's territory.
This restriction also prohibits the franchisee from soliciting referrals for these services from shared referral sources or within the same 15-mile radius. The FDD specifies that these restrictions are considered reasonable and necessary to protect Caring Transitions's business interests. The non-compete agreement is applicable regardless of the reason for termination.
These post-term covenants are typical in franchising to protect the brand's market share, customer relationships, and proprietary information. Prospective Caring Transitions franchisees should carefully consider the implications of this two-year restriction, especially if they plan to remain in the same geographic area and industry after leaving the Caring Transitions system. It is advisable to seek legal counsel to fully understand the scope and enforceability of the non-compete agreement in their specific jurisdiction.