Can a Caring Transitions franchisee divert business from their Franchised Business to a Competitive Business?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
directly, commit an act
of infringement or contest, or aid in contesting, the validity or ownership of the Marks or take any other action in derogation thereof during the term of the Franchise Agreement or after the expiration or termination thereof.
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- 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.
Source: Item 23 — RECEIPT (FDD pages 49–202)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, a franchisee is restricted from diverting business from their franchised business to a competitive business during the term of the Franchise Agreement. Specifically, the franchisee (or any related party) cannot directly or indirectly attempt to divert any business or client of the Caring Transitions franchise to a Competitive Business. They are also prohibited from performing any act that could be harmful to the goodwill associated with the Caring Transitions brand and its operating system.
The FDD defines a "Competitive Business" broadly, including any business that offers similar products or services to Caring Transitions, or one in which Caring Transitions' trade secrets could be used to the disadvantage of the franchisor, franchisee, or another Caring Transitions franchise. This definition extends to businesses that offer alternatives to the sale of personal belongings or move management services, which are core services of Caring Transitions.
After the termination of the Franchise Agreement, the franchisee is still restricted from engaging in activities that would divert business. For a period of two years after termination, the franchisee cannot own, operate, or be employed by a Competitive Business within 15 miles of their former territory or any other Caring Transitions franchise territory. Additionally, they cannot divert business from the Franchised Business to a Competitive Business or solicit customers of the Franchised Business for the benefit of a Competitive Business. These restrictions are in place to protect Caring Transitions' business interests and the interests of its franchisees.