factual

Where in the Caring Transitions Franchise Agreement can I find information about non-competition covenants?

Caring_Transitions Franchise · 2025 FDD

Answer from 2025 FDD Document

| Exhibit I | The restrictive covenant agreement to be signed by the owners of a non-individual franchisee and by employees with management responsibility (see Item 15 above) |

    1. Covenants During Term of Franchise Agreement. Each Covenantor agrees that, so long as the Franchise Agreement is in effect, he or she shall not, either directly or indirectly, for him or herself or through, on behalf of, or in conjunction with, any other person (including a spouse, child, parent, or sibling of a Covenantor) (each of which is a "Covered Person" for purposes of this agreement):
    • (a) divert or attempt to divert any business or client of the Franchised Business or of any other Caring Transitions Franchisee to a Competitive Business, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the Operating System;
    • (b) aid, assist, provide goods or services to (whether as an employee or independent contractor), or loan money to any Competitive Business;
    • (c) own, maintain, engage in, operate, or have any interest in a Competitive Business, except as may be authorized under another franchise agreement in effect between Franchisee (or Covenantor) and Franchisor;
    • (d) promote, sell, or provide for compensation any Permitted Products or Services, or otherwise operate the Franchised Business, within a protected territory licensed to another Caring Transitions Franchisee (except as may be expressly permitted by the Franchise Agreement or the Manual), or otherwise infringe upon rights granted under franchise agreements between Franchisor and other Caring Transitions Franchisees; or
    • (e) take any action injurious or prejudicial to the Operating System.

4. Covenants After Termination of Franchise Agreement.

  • (a) 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,

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.

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 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 21–22)

What This Means (2025 FDD)

According to Caring Transitions' 2025 Franchise Disclosure Document, details regarding non-competition covenants can be found in several exhibits and sections of the agreement. Exhibit I, titled "The restrictive covenant agreement," outlines the agreement to be signed by owners of non-individual franchisees and employees with management responsibilities, as referenced in Item 15. Additionally, Item 23 discusses covenants related to confidentiality, intellectual property, and actions during the term of the Franchise Agreement that could be considered non-competition clauses.

Item 20, Section 15.3, details the covenants after the termination of the Franchise Agreement. This section specifies that for two years after the agreement's expiration, termination, or transfer, the franchisee cannot engage in businesses offering similar services (moving management, estate liquidation, etc.) within 15 miles of their territory or any other Caring Transitions franchisee's territory. They are also restricted from soliciting referrals for these services from Shared Referral Sources within the same geographic boundaries.

These restrictions are acknowledged by the franchisee as reasonable and necessary to protect Caring Transitions' business interests. The document also clarifies that these non-compete clauses are severable, meaning that if one part is deemed unenforceable, the remaining provisions will still be in effect. This ensures that Caring Transitions maintains protection against unfair competition even if specific clauses are challenged.

Prospective franchisees should carefully review these sections and exhibits to fully understand the scope and limitations of the non-competition covenants, both during the franchise term and after termination. It is important to note the geographical and temporal restrictions, as well as the types of activities that are prohibited, to ensure compliance and avoid potential legal issues.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.