What happens to the two-year non-solicitation period for Caring Transitions if a franchisee violates its terms?
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.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the two-year non-solicitation period is paused if a franchisee violates the terms of the non-solicitation agreement. This means that any time spent in violation of the agreement does not count towards the fulfillment of the two-year restriction. The non-solicitation period will only resume once the franchisee ceases the violating behavior.
For a prospective Caring Transitions franchisee, this implies that strict adherence to the non-solicitation terms is crucial. Any breach, even if unintentional, could extend the period during which they are restricted from soliciting customers or shared referral sources. This could significantly impact their ability to start a competing business or engage with former clients and referral partners after leaving the Caring Transitions system.
This type of clause is fairly standard in franchise agreements, as franchisors aim to protect their customer base and referral networks. The 'stayed' or paused time period ensures that the franchisor is not penalized by a franchisee's non-compliance. Franchisees should carefully review the definition of 'solicitation' and 'Shared Referral Source' in their Franchise Agreement to fully understand the scope of these restrictions and avoid inadvertent violations that could prolong the non-solicitation period.