For how long after the expiration or termination of the Caring Transitions franchise agreement are franchisees prohibited from soliciting shared referral sources?
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 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 33)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, a franchisee is restricted from soliciting shared referral sources for two years after the expiration or termination of the franchise agreement. Specifically, the franchisee cannot promote or solicit referrals for estate liquidation, household liquidation services, moving management services, Permitted Products and Services, or any other services that had been offered by the franchised business from any Shared Referral Source located in the Territory. This restriction applies regardless of the cause of termination.
This non-solicitation covenant is designed to protect Caring Transitions' established relationships and goodwill. Shared Referral Sources are defined as entities like attorneys, bank trust departments, real estate agents, funeral homes, and senior care facilities that frequently recommend service providers. The restriction ensures that former franchisees do not unfairly capitalize on the Caring Transitions network after leaving the system.
The FDD also states that the two-year time period will be paused during any violation or breach of the terms of this paragraph. This means that if a franchisee violates the non-solicitation agreement, the two-year clock stops, and the restriction period is effectively extended by the duration of the violation. This provision strengthens the enforcement of the non-solicitation agreement and discourages franchisees from attempting to circumvent it.
Prospective franchisees should be aware of these post-termination restrictions and factor them into their business planning. The inability to solicit Shared Referral Sources for two years could impact their ability to start a competing business or transition to a similar venture after leaving the Caring Transitions system. It is important to fully understand the scope and implications of these covenants before entering into a franchise agreement.