What is the Caring Transitions franchisee required to do with the premises to prevent operation of a similar business after termination?
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.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, after the franchise agreement expires, terminates, or is transferred, the franchisee is restricted from engaging in similar business activities. For a period of two years, the franchisee cannot own, maintain, operate, or have any interest in a business offering moving management, estate liquidation, or household liquidation services, or any other services offered by the franchised business. This restriction applies within 15 miles of the franchisee's territory or any other Caring Transitions franchisee's territory.
Additionally, the franchisee is prohibited from promoting, selling, or soliciting referrals for these services from shared referral sources or within the same 15-mile radius. These restrictions are designed to protect Caring Transitions' business interests and prevent unfair competition by former franchisees who might leverage the knowledge and relationships gained during their time with the franchise.
The FDD specifies that these restrictions are severable and enforceable to the extent permitted by law, acknowledging the reasonableness and necessity of these measures to safeguard Caring Transitions' market position. This means that if one part of the restriction is deemed unenforceable, the remaining parts still apply. Prospective franchisees should carefully consider these post-termination covenants, as they significantly limit their ability to operate a similar business in the same geographic area for two years after leaving the Caring Transitions system.
It is important for potential franchisees to fully understand the implications of these covenants before entering into a franchise agreement. They should seek legal counsel to assess the enforceability of these restrictions in their specific jurisdiction and to evaluate how these limitations might affect their future business opportunities.