When is it lawful for Caring Transitions to repurchase a franchisee's business?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
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| We have the right under the Franchise Agreement to obtain a general release from you (and, if |
| applicable, your owners) as a condition of taking this action or agreeing to this request. Therefore, |
| we are willing to take the action or agree to the request specified above if you (and if applicable, |
| your owners) give us the release and covenant not to sue provided below in this document. You |
| (and, if applicable, your owners) are willing to give us the release and covenant not to sue |
| provided below as partial consideration for our willingness to take the action nor agree to the |
| request described above. |
| Consistent with the previous introduction, you, on your own behalf and on behalf of your |
| successors, heirs, executors, administrators, personal representatives, agents, assigns, partners, |
| shareholders, members, directors, officers, principals, employees, and affiliated entities |
| (collectively, the "Releasing Parties"), hereby forever release and discharge us and our current |
| and former officers, directors, shareholders, principals, employees, agents, representatives, |
| affiliated entities, successors, and assigns (collectively, the "Franchisor Parties") from any and all |
| claims, damages (known and unknown), demands, causes of action, suits, duties, liabilities, and |
| agreements of any nature and kind (collectively, "Claims") that you and any of the other Releasing |
| Parties now have, ever had, or, but for this document, hereafter would or could have against any |
| of the Franchisor Parties (1) arising out of or related to the Franchisor Parties' performance of |
| their obligations under the Franchise Agreement before the date of your signature below or (2) |
| otherwise arising from or related to your and the other Releasing Parties' relationship, from the |
| beginning of time to the date of your signature below, with any of the Franchisor Parties. You, on |
| your own behalf and on behalf of the other Releasing Parties, further covenant not to sue any of |
| the Franchisor Parties on any of the Claims released by this paragraph and represent that you |
| have not assigned any of the Claims released by this paragraph to any individual or entity that is |
| not bound by this paragraph. |
| We also are entitled to a release and covenant not to sue from your owners. By his, her, |
| or their separate signature below, your transferring owners likewise grant to us the release and |
| covenant not to sue provided above. |
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| Notwithstanding the above, nothing contained herein shall act as a release, estoppel or |
| waiver of any claim or liability arising under the Maryland Franchise Registration and Disclosure |
| Law. |
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2025 FDD)
Based on the 2025 Caring Transitions Franchise Disclosure Document, the franchisor, C.T. Franchising Systems, Inc., has the right to obtain a general release from the franchisee (and their owners, if applicable) as a condition of taking a specific action or agreeing to a request made by the franchisee. This implies that if a franchisee requests Caring Transitions to take a certain action, such as a business repurchase, Caring Transitions can require a release and covenant not to sue as a condition of agreeing to the request. This release covers any claims, damages, or liabilities related to the Franchise Agreement or the relationship between the franchisee and Caring Transitions up to the date of signing the release.
In practical terms, this means that if a Caring Transitions franchisee wants to sell their business back to the franchisor, Caring Transitions can legally require the franchisee to sign a document releasing them from any past or present claims. This protects Caring Transitions from potential future lawsuits related to the franchisee's operation of the business or the terms of the franchise agreement. The franchisee, in turn, provides this release as partial consideration for Caring Transitions' willingness to repurchase the business.
However, the FDD also notes an important exception: the release does not apply to any claim or liability arising under the Maryland Franchise Registration and Disclosure Law. This means that even if a franchisee signs a general release, they still retain their rights under Maryland franchise law. Prospective franchisees should carefully review the release and covenant not to sue, and consult with an attorney to fully understand its implications before signing.
It is also important to note that other states may have laws regulating the offer and sale of franchises or business opportunities. Franchisees should be aware of the specific laws in their state and how they may affect their rights and obligations. The FDD also mentions that if Caring Transitions does not deliver the disclosure document on time or if it contains false or misleading statements, or a material omission, a violation of federal and state law may have occurred.