What must a prospective purchaser of a Caring Transitions franchise execute before receiving confidential information?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall require each prospective purchaser of the franchised business, the license granted under this agreement, or any interest in Franchisee, prior to disclosing any confidential information to such person, to execute a confidentiality agreement, in a form approved by Franchisor, requiring that all confidential information that may be disclosed will be held in strict confidence and used solely to evaluate the contemplated transaction.
All confidentiality agreements described in this paragraph must include a specific identification of Franchisor as a third-party beneficiary with the independent right to enforce the agreement.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, a franchisee must require each prospective purchaser of the franchised business, the license granted under the agreement, or any interest in the franchisee to execute a confidentiality agreement before disclosing any confidential information. This agreement must be in a form approved by Caring Transitions.
The confidentiality agreement mandates that all confidential information disclosed be held in strict confidence and used solely to evaluate the contemplated transaction. This measure ensures that sensitive business information remains protected during the transfer process.
Furthermore, all confidentiality agreements must specifically identify Caring Transitions as a third-party beneficiary. This grants Caring Transitions the independent right to enforce the agreement, providing an additional layer of protection for their confidential information and business interests. This is a fairly standard practice in franchising to protect the franchisor's proprietary information.