Is a Caring Transitions franchisee prohibited from operating a Competitive Business 'in conjunction with' a Covered Person during the Restrictive Period?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
and ending on the second anniversary thereof (the "Restrictive Period"), directly or indirectly, for him/herself or through, on behalf of, or in conjunction with a Covered Person:
- (1) except as may be authorized under another franchise agreement in effect between Franchisee (or Covenantor) and Franchisor (including a successor agreement upon the renewal of the Franchise granted under the Franchise Agreement), own, maintain, operate, engage in, or have any interest in a Competitive Business that is or is intended to be located, or that operates, in or within 15 miles of the geographical boundaries of Franchisee's Territory; or
- (2) except as may be authorized under another franchise agreement in effect between Franchisee (or Covenantor) and Franchisor (including a successor agreement upon the
renewal of the Franchise granted under the Franchise Agreement), own, maintain, operate, engage in, or have any interest in a Competitive Business that is or is intended to be located, or that operates, in or within 15 miles of the geographical boundaries of any other Caring Transitions Franchisee's protected territory; or
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 operating a Competitive Business in conjunction with a Covered Person during the Restrictive Period. Specifically, during the Restrictive Period, the franchisee cannot own, maintain, operate, engage in, or have any interest in a Competitive Business that is located within 15 miles of the franchisee's territory or any other Caring Transitions franchisee's protected territory, except if authorized under another franchise agreement with the Franchisor. The Restrictive Period begins upon the expiration or termination of the Franchise Agreement and extends for two years.
A "Covered Person" includes any other person, including a spouse, child, parent, or sibling of a Covenantor. A "Competitive Business" is defined as a business that offers or sells any of the Permitted Products or Services, or any products or services similar to those offered as part of the Operating System, or in which Trade Secrets could be used to the disadvantage of Franchisor, Franchisee, or another Caring Transitions Franchise. It also includes businesses that offer products or services that are otherwise competitive with or may be considered an alternative to any products or services offered by Caring Transitions Franchises.
These restrictions are designed to protect Caring Transitions' business interests and prevent unfair competition. The FDD states that the geographic and temporal restrictions are acknowledged as reasonable and necessary to protect the Franchisor's and Franchisee's business interests in the relevant markets. A violation of these covenants could result in legal action, including injunctive relief, and potential damages. The franchisee acknowledges having sufficient resources, business experience, and opportunities to earn an adequate living while complying with these restrictions.