What is the scope of territorial protection for a Caring Transitions franchisee during the agreement term?
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. With Franchisor's prior written consent, Franchisee may provide products and services to National Accounts at or from locations in a franchise territory granted to another franchisee of the System. A "National Account" means a special customer (which may be, but is not limited to, a national or regional customer, other large business, or government agency) designated as such by Franchisor from time-to-time in its business judgment. A National Account will typically (though not necessarily) be a customer whose offices, stores, plants, buildings, or other facilities are not confined to the territory of a single Caring Transitions Franchise.
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 is granted a territory defined by postal codes, as detailed in Exhibit B of the Franchise Agreement. During the term of the agreement, Caring Transitions will not establish or franchise another business substantially similar to the franchised business within the franchisee's territory. However, the franchise granted is otherwise non-exclusive and subject to conditions outlined in specific sections of the agreement. The franchisee's right to exclusively operate within their territory begins after completing the initial training program and once the business is fully operational.
Despite the territorial protection, Caring Transitions franchisees do not have exclusive territorial rights beyond what is expressly described in the agreement. Caring Transitions retains the right to establish other franchises or facilities at any location, regardless of their proximity to existing franchises or their impact on the franchisee's business. The territorial protection does not extend to the solicitation of employees by other franchisees. Additionally, the rights granted to a franchisee do not include the exclusive right to offer services to National Accounts, which are specifically excluded from territorial restrictions. Other franchisees may provide services to National Accounts within a franchisee's territory, and a franchisee may serve National Accounts in another franchisee's territory with prior written consent from Caring Transitions.
In practical terms, while Caring Transitions offers some territorial protection, it is limited and subject to several exceptions. A franchisee's territory is defined by postal codes, but this territory is not entirely exclusive. The franchisor can still operate or franchise other businesses, and National Accounts are not protected. This means a franchisee might face competition from other Caring Transitions franchisees or from the franchisor itself within their designated area, especially concerning large, national clients. Prospective franchisees should carefully review the definition of "National Accounts" and consider the potential impact of these exceptions on their business.