What does it mean to 'operate your franchise in another franchisee's territory' for a Caring Transitions franchise?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
would permit us to modify your territorial rights.
You may not operate your franchise in another franchisee's territory, except as disclosed in this Item 12. "Operate your franchise in another franchisee's territory" means advertising, soliciting, offering, providing, or selling products or services in another franchisee's territory. The exclusivity of your territory begins once you complete our initial training program and become fully operational.
Although we are not obligated to do so under the franchise agreement, we may permit you to operate your franchise in areas outside your territory that are not part of another Caring Transitions franchisee's territory. We may, in our discretion, allow you to continue serving existing clients located in areas outside your territory after such area later becomes part of another franchisee's territory, but you must stop soliciting and serving new clients in any such area. Similarly, earlier Caring Transitions franchisees may have operated their franchises in areas that later became part of your territory; if so, they will be permitted to continue to provide services in your territory to clients they already had in your territory before you opened your franchise, but they will be prohibited from soliciting and serving any new clients in your territory once you open your franchise. In addition, we may permit you to operate in the territory of a franchisee that has been provided written notification of a default under
the franchise agreement and who has not cured the default within 30 days. In this event, the exclusivity of the defaulting franchisee's territory could, in our discretion, be suspended until the default is cured. You do not acquire any rights to any areas outside your territory and you must immediately stop operating your franchise in areas outside your territory upon notification from us.
You may not relocate the franchised business without our approval. Whether or not we would allow relocation depends on the circumstances at the time and what is in the systems' best interests, based on our business judgment. Any relocation, if approved, would be at your sole cost.
The exclusivity of your territory does not extend to customers that we identify as National Accounts. A "National Account" is business, association, or other organization with members, affiliates, policyholders, offices, stores, plants, buildings or other facilities that are not confined to the territory of a single Caring Transitions franchisee. With our prior written consent, you may service National Accounts at or from locations in another franchisee's territory. We have the exclusive right to identify customers or potential customers as National Accounts, to service National Accounts, and to award the right to service National Accounts to any Caring Transitions franchisee, in our sole and absolute discretion.
The exclusivity of your territory does not extend to "shared referral sources" (such as attorneys, bank trust departments, real estate agents and brokers, funeral homes, senior care facilities, and similar organizations) that will be shared by all franchisees in a market. Other Caring Transitions franchisees may solicit referrals from and promote their services to shared referral sources located in your territory, and you may solicit referrals from and promote your services to shared referral sources located in another franchisee's territory.
Source: Item 12 — TERRITORY (FDD pages 29–31)
What This Means (2025 FDD)
According to Caring Transitions's 2025 Franchise Disclosure Document, operating a franchise in another franchisee's territory is defined as advertising, soliciting, offering, providing, or selling products or services within that other franchisee's exclusive area. Generally, Caring Transitions grants franchisees an exclusive territory delineated by postal codes, containing a population between 175,000 and 200,000, for which the initial franchise fee is paid.
However, the FDD outlines several exceptions to this territorial exclusivity. Caring Transitions may allow franchisees to service National Accounts, with prior written consent, even if those accounts are located within another franchisee's territory. Additionally, franchisees can solicit referrals from shared referral sources, such as attorneys or senior care facilities, located in other territories. Existing clients can continue to be served even if their location later falls within another franchisee's territory, although soliciting new clients in that area is prohibited.
It's important to note that Caring Transitions retains the right to identify National Accounts and shared referral sources, and to resolve any disputes between franchisees related to these sources. Furthermore, the exclusivity of a territory can be temporarily suspended if a franchisee defaults on their franchise agreement and fails to cure the default within 30 days. These stipulations highlight the importance of understanding the specific terms and conditions of the franchise agreement regarding territorial rights and potential limitations.