Can Caring Transitions franchisees solicit referrals from Shared Referral Sources located in another franchisee's territory?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
heir services to Shared Referral Sources located in Franchisee's Territory. Likewise, Franchisee may solicit referrals from and promote its services to Shared Referral Sources located in a franchise territory licensed to another franchisee of the System. A "Shared Referral Source" is a person or organization that: (i) because of its purpose or the nature of its business, frequently encounters opportunities to recommend, to its customers, members, or to the general public, providers of services
similar to the services offered by a Caring Transitions franchise; and (ii) though it may be physically located within one franchise territory, serves a geographic area larger than that franchise territory. Examples of Shared Referral Sources (by way of illustration and not limitation) are attorneys, bank trust departments, publications of a general circulation, real estate agents and brokers, funeral homes, senior care facilities, and similar organizations. Franchisor retains the sole and exclusive right to identify Shared Referral Sources on a case-by-case basis, in Franchisor's sole and absolute discretion. All disputes between franchisees of the System relating to Shared Referral Sources will be resolved by Franchisor, whose decision will be final and binding upon all parties.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, franchisees are permitted to solicit referrals from Shared Referral Sources, even if those sources are located within another franchisee's territory. A "Shared Referral Source" is defined as an entity that frequently recommends service providers similar to Caring Transitions, such as attorneys, banks, real estate agents, funeral homes, and senior care facilities, and serves a geographic area larger than a single franchise territory. However, the franchisor retains the exclusive right to identify Shared Referral Sources on a case-by-case basis and resolves any disputes between franchisees regarding these sources.
This aspect of the franchise agreement provides Caring Transitions franchisees with the flexibility to expand their reach beyond their immediate territory by tapping into referral networks that may span multiple territories. It also means that franchisees may face competition from other franchisees who are also soliciting referrals from the same Shared Referral Sources within their territory. This non-exclusive right to solicit referrals from Shared Referral Sources is specifically excluded from the territorial restrictions typically imposed by Caring Transitions.
However, franchisees are restricted from offering, selling, or providing services outside their designated territory or to a Shared Referral Source located in another franchisee's licensed territory. This clause ensures that while franchisees can solicit referrals across territories, they cannot directly conduct business in another franchisee's protected area. Franchisees should be aware of these distinctions to avoid violating the franchise agreement and to maximize their referral opportunities within the bounds of the agreement.
After the termination of the franchise agreement, the franchisee is restricted for two years from soliciting referrals from Shared Referral Sources within 15 miles of their former territory or any other Caring Transitions franchisee's territory. This post-termination covenant aims to protect Caring Transitions' business interests and those of its franchisees by preventing former franchisees from leveraging established referral networks to compete with the system.