If a Caring Transitions franchisee's relationship with the Franchisee is terminated, does the non-compete still apply?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
e Franchise Agreement or the Manual), or otherwise infringe upon rights granted under franchise agreements between Franchisor and other Caring Transitions Franchisees; or
- (e) take any action injurious or prejudicial to the Operating System.
4. Covenants After Termination of Franchise Agreement.
- (a) Each Covenantor agrees that he or she shall not, for a continuous and uninterrupted period commencing upon the earlier of:
- (i) the expiration of the Franchise Agreement,
- (ii) the termination (regardless of the cause) of the Franchise Agreement, or
- (iii) the termination of Covenantor's relationship with Franchisee (as defined in section 4(d)) for any reason,
and ending on the second anniversary thereof (the "Restrictive Period"), directly or indirectly, for him/herself or through, on behalf of, or in conjunction with a Covered Person:
- (1) except as may be authorized under another franchise agreement in effect between Franchisee (or Covenantor) and Franchisor (including a successor agreement upon the renewal of the Franchise granted under the Franchise Agreement), own, maintain, operate, engage in, or have any interest in a Competitive Business that is or is intended to be located, or that operates, in or within 15 miles of the geographical boundaries of Franchisee's Territory; or
- (2) except as may be authorized under another franchise agreement in effect between Franchisee (or Covenantor) and Franchisor (including a successor agreement upon the
renewal of the Franchise granted under the Franchise Agreement), own, maintain, operate, engage in, or have any interest in a Competitive Business that is or is intended to be located, or that operates, in or within 15 miles of the geographical boundaries of any other Caring Transitions Franchisee's protected territory; or
- (3) be employed by, or be engaged on a self-employed basis in, a Competitive Business that is or is intended to be located, or that operates, in or within 15 miles of the geographical boundaries of Franchisee's Territory; or
- (4) be employed by, or be engaged on a self-employed basis in, a Competitive Business that is or is intended to be located, or that operates, in or within 15 miles of the geographical boundaries of any other Caring Transitions Franchisee's protected territory;
Source: Item 23 — RECEIPT (FDD pages 49–202)
What This Means (2025 FDD)
According to the 2025 Caring Transitions Franchise Disclosure Document, the non-compete agreement remains in effect even after the termination of a Covenantor's relationship with the franchisee. The non-compete covenants apply for a continuous and uninterrupted period starting from the earliest of the expiration of the Franchise Agreement, the termination of the Franchise Agreement (regardless of the reason), or the termination of the Covenantor's relationship with the franchisee.
The terms of the non-compete are applicable to each Covenantor, which includes owners, directors, or officers of the franchisee. The termination of the relationship is defined differently based on the Covenantor's role. For an owner, termination occurs upon the transfer of their entire ownership interest. For an officer, director, or manager, termination occurs upon their resignation or termination from that position. If a Covenantor has multiple roles, the termination occurs upon the end of their last relationship with the franchisee.
Specifically, the non-compete lasts for a continuous and uninterrupted period commencing upon the earlier of the expiration of the Franchise Agreement, the termination of the Franchise Agreement (regardless of the cause), or the termination of Covenantor's relationship with Franchisee. The non-compete restricts the Covenantor from engaging in or having an interest in a Competitive Business within 15 miles of the franchisee's territory or any other Caring Transitions franchisee's protected territory for a period of two years. This includes owning, maintaining, operating, or being employed by such a business. The time period of the non-compete will be paused during any violation of its terms.