Does the non-solicitation covenant in the Caring Transitions agreement survive the expiration, termination, or cancellation of the agreement?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
The covenants in this Section 15.3 will survive the expiration, termination, or transfer of this Agreement.
- 15.4 Nonsolicitation of Customers and Shared Referral Sources.
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.
The covenants in this paragraph will survive the expiration, termination or cancellation of this agreement.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions's 2025 Franchise Disclosure Document, the non-solicitation covenants outlined in Section 15.4 of the franchise agreement do indeed survive the expiration, termination, or cancellation of the agreement. This means that even after the franchise term ends, the franchisee is still bound by the restrictions on soliciting customers and shared referral sources.
Specifically, for a period of two years after the agreement's expiration or termination, the franchisee cannot directly or indirectly solicit or sell products or services to anyone who was a customer of the franchised business during the term of the agreement. Additionally, the franchisee is prohibited from promoting or soliciting referrals for estate liquidation, household liquidation services, moving management services, or any other services offered by the franchised business from any Shared Referral Source located within the Territory. The two-year period is paused if the franchisee violates these terms, effectively extending the restriction period.
This survival clause is a standard practice in franchising to protect the franchisor's customer base and referral networks. It prevents a former franchisee from leveraging the goodwill and relationships built during the franchise term to unfairly compete with Caring Transitions or its other franchisees. Prospective franchisees should understand that these post-termination restrictions are legally binding and can significantly impact their ability to operate a similar business after leaving the Caring Transitions system.