Can the Caring Transitions franchisor provide written approval to waive the non-compete restrictions?
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.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions's 2025 Franchise Disclosure Document, the franchisor can provide written approval to waive the non-compete restrictions. Specifically, regarding post-termination covenants, the franchise agreement states that the restrictions on operating a competing business or soliciting customers within a defined territory do not apply if Caring Transitions provides written approval. This waiver would allow a former franchisee to engage in activities that would otherwise be prohibited by the non-compete agreement.
This provision offers some flexibility for franchisees who may wish to exit the Caring Transitions system but remain in a related industry. However, it's important to understand that such approval is at the discretion of Caring Transitions. A prospective franchisee should not assume that a waiver will be granted automatically.
It is common in franchising to have non-compete clauses to protect the brand and the existing franchisees. The ability to obtain a waiver, as outlined in the Caring Transitions FDD, is not always standard. A potential franchisee should consider the circumstances under which they might seek such a waiver and discuss this possibility with the franchisor during their due diligence.
It is important for a prospective franchisee to understand the specific conditions under which Caring Transitions might grant a waiver and to assess the likelihood of obtaining one should the need arise. This should be part of a broader discussion about the exit strategy and potential future opportunities after leaving the Caring Transitions franchise system.