What is the Caring Transitions franchisee prohibited from doing with equipment, materials, or confidential methods after the franchise agreement terminates?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
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 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to the 2025 Caring Transitions Franchise Disclosure Document, after the termination of the franchise agreement, the franchisee is restricted from certain competitive activities for a period of two years. Specifically, the franchisee cannot own, maintain, operate, engage in, or have any interest in a business offering moving management, estate liquidation, or household liquidation services, or any services previously offered by the franchised business, within 15 miles of their former territory or any other Caring Transitions franchisee's territory.
Additionally, the franchisee is prohibited from promoting, selling, procuring, providing, or soliciting referrals for these services from Shared Referral Sources or within the same 15-mile radius of their territory or any other Caring Transitions franchisee's territory. These restrictions apply regardless of the reason for termination, whether it be expiration, termination, or transfer of the agreement.
The FDD emphasizes that these restrictions are considered reasonable and necessary to protect Caring Transitions' business interests in the relevant markets. The document also states that these restrictions are severable and contain different but overlapping restrictions that shall be enforced simultaneously whenever permitted by applicable law. If any of these restrictions are deemed invalid or unenforceable, they are to be modified to the extent necessary to permit enforcement, while the remaining provisions remain unaffected.
This non-compete clause has significant implications for a former Caring Transitions franchisee. It limits their ability to immediately start a competing business or work for a competitor in the same geographic area, potentially impacting their livelihood. Prospective franchisees should carefully consider these restrictions and their potential impact on their future career options before entering into a franchise agreement with Caring Transitions.