What is the geographic scope of the nonsolicitation covenant for Caring Transitions customers and shared referral sources after termination?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not, directly or indirectly, for itself or through, on behalf of, or in conjunction with any person or entity for a continuous and uninterrupted period commencing upon the expiration or termination of this agreement (regardless of the cause for termination) and continuing for two years thereafter, directly or indirectly: (i) solicit or sell products or services to any person who was a customer of the franchised business at any time during the term of this agreement; or (ii) promote or solicit referrals for estate liquidation or household liquidation services or moving management services, any Permitted Products and Services, or any other services that had been offered by the franchised business, from any Shared Referral Source (as defined in Section 1.5 above) located in the Territory.
The two-year time period referred to in this paragraph will be stayed during any violation or breach of the terms of this paragraph.
The covenants in this paragraph will survive the expiration, termination or cancellation of this agreement.
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 termination of the franchise agreement, the franchisee is restricted from soliciting customers of the franchised business or promoting or soliciting referrals from Shared Referral Sources. This restriction lasts for two years. The geographic scope for Shared Referral Sources is within the franchisee's territory. A "Shared Referral Source" is defined as a person or organization that frequently recommends providers of services similar to those offered by a Caring Transitions franchise due to their business or purpose.
Specifically, the franchisee cannot solicit or sell products or services to anyone who was a customer during the term of the agreement. Additionally, they cannot promote or solicit referrals for estate liquidation, household liquidation, moving management services, or any other services offered by the franchised business from any Shared Referral Source located within the Territory.
This non-solicitation covenant aims to protect Caring Transitions' customer base and referral networks. The agreement specifies that the two-year restriction period will be paused during any violation of these terms. These covenants are designed to survive the termination or cancellation of the franchise agreement, ensuring continued protection for the franchisor's interests.