Can a Caring Transitions franchisee indirectly solicit customers after the franchise agreement terminates?
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.
- (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 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, a franchisee is restricted from indirectly soliciting customers after the termination of the franchise agreement. Specifically, for two years after the agreement ends, the franchisee cannot promote, sell, procure, provide, or solicit referrals for moving management, estate liquidation, or household liquidation services. This restriction applies to any services offered by the franchised business.
The restriction extends to soliciting from Shared Referral Sources or within 15 miles of the franchisee's former territory or any other Caring Transitions franchisee's territory. This prevents a former franchisee from leveraging established relationships or geographic proximity to unfairly compete with Caring Transitions or its other franchisees.
The FDD also states that these restrictions are severable and contain different but overlapping restrictions that shall be enforced simultaneously whenever permitted by applicable law. This means that if one part of the restriction is deemed unenforceable, the remaining parts will still be in effect. The franchisee acknowledges that these restrictions are reasonable and necessary to protect Caring Transitions' business interests.