Does Caring Transitions have the right to establish or franchise another business substantially similar to the franchised business within the Franchisee's Territory?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
he Territory described on Exhibit B.
- 1.3 Scope of Territorial Protection. During the term of this agreement, Franchisor shall not establish or franchise another to establish a business substantially similar to the franchised business within Franchisee's Territory. Franchisee acknowledges that the franchise granted hereunder is otherwise non-exclusive and is granted subject to the terms and conditions of Sections 1.4 through 1.10 and 8.6 of this agreement. Except as expressly described in this paragraph, Franchisee does not have any "exclusive territory" or any "exclusive," "protected," or "reserved" territorial or similar rights, and there is and will be no limitation on Franchisor's rights to locate and consent to the location of other Caring Transitions Franchises or other facilities of any type at any location, regardless of the distance from, impact on, or vicinity of, the franchised business or the number of Caring Transitions Franchises in an area or market. Except as permitted by Sections 1.4 and 1.5 below, Franchisee may not provide or sell products or services in a franchise territory granted to another franchisee of the System. The territorial protection granted under this Section does not extend to the solicitation of employees, and nothing in this agreement prohibits other franchisees of Franchisor from advertising for and soliciting employees in Franchisee's Territory. Franchisee's right to exclusively operate the franchised business within Franchisee's Territory (subject to Sections 1.4 and 1.5 below) shall begin once Franchisee has completed Franchisor's initial training program (see Section 7.1 below) and the franchised business has become fully operational.
- 1.4 National Accounts. The rights granted to Franchisee by this agreement do not include the exclusive right to offer or provide products or services to National Accounts, and National Accounts are hereby specifically excluded from Franchisor's territorial restrictions in Section 1.3 above. Franchisee acknowledges that other franchisees of the System may provide products and services to National Accounts at or from locations in Franchisee's Territory.
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, Caring Transitions agrees not to establish or franchise another business substantially similar to the franchised business within the franchisee's territory during the term of the agreement. However, this territorial protection is subject to several conditions outlined in other sections of the agreement.
Specifically, the franchise granted to the franchisee is non-exclusive and subject to the terms and conditions of Sections 1.4 through 1.10 and 8.6 of the agreement. The franchisee does not have an "exclusive territory" or any "exclusive," "protected," or "reserved" territorial rights beyond what is expressly described in those sections. Caring Transitions retains the right to locate or consent to the location of other Caring Transitions franchises or facilities of any type at any location, regardless of the distance from, impact on, or vicinity of the franchised business.
The franchisee's right to exclusively operate within their territory begins only after completing Caring Transitions's initial training program and once the franchised business is fully operational. This protection does not extend to the solicitation of employees by other franchisees. Additionally, the franchisee's territorial rights do not include the exclusive right to offer services to National Accounts, which other franchisees may serve within the franchisee's territory.
In summary, while Caring Transitions provides some territorial protection, it is limited and subject to numerous exceptions, allowing Caring Transitions to establish or franchise similar businesses under certain circumstances. A prospective franchisee should carefully review Sections 1.4 through 1.10 and 8.6 of the franchise agreement to fully understand the scope and limitations of their territorial protection.