Which sections of the Caring Transitions Franchise Agreement address non-competition covenants?

• 1. Covenants During Term of Franchise Agreement. Each Covenantor agrees that, so long as the Franchise Agreement is in effect, he or she shall not, either directly or indirectly, for him or herself or through, on behalf of, or in conjunction with, any other person (including a spouse, child, parent, or sibling of a Covenantor) (each of which is a "Covered Person" for purposes of this agreement):
  • (a) divert or attempt to divert any business or client of the Franchised Business or of any other Caring Transitions Franchisee to a Competitive Business, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the Operating System;
  • (b) aid, assist, provide goods or services to (whether as an employee or independent contractor), or loan money to any Competitive Business;
  • (c) own, maintain, engage in, operate, or have any interest in a Competitive Business, except as may be authorized under another franchise agreement in effect between Franchisee (or Covenantor) and Franchisor;
  • (d) promote, sell, or provide for compensation any Permitted Products or Services, or otherwise operate the Franchised Business, within a protected territory licensed to another Caring Transitions Franchisee (except as may be expressly permitted by the Franchise Agreement or the Manual), or otherwise infringe upon rights granted under franchise agreements between Franchisor and other Caring Transitions Franchisees; or
  • (e) take any action injurious or prejudicial to the Operating System.

4. Covenants After Termination of Franchise Agreement.

• (a) Each Covenantor agrees that he or she shall not, for a continuous and uninterrupted period commencing upon the earlier of:
  • (i) the expiration of the Franchise Agreement,
  • (ii) the termination (regardless of the cause) of the Franchise Agreement, or
  • (iii) the termination of Covenantor's relationship with Franchisee (as defined in section 4(d)) for any reason,

15.3 Covenants After Termination of Franchise Agreement.

• (a) Except as otherwise approved in writing by Franchisor, Franchisee shall not, for a continuous and uninterrupted period commencing upon the expiration, termination, or transfer of this Agreement (regardless of the cause for termination) and continuing for two (2) years thereafter, directly or indirectly, for itself or through, on behalf of, or in conjunction with any person (including a spouse, child, parent, or sibling of Franchisee or of a principal of Franchisee), partnership, limited liability company, corporation, or other entity:
  • (1) own, maintain, operate, engage in, or have any interest in any business offering moving management, estate liquidation or household liquidation services, or any other services that had been offered by the franchised business, that is or is intended to be located or which operates in or within 15 miles of the geographical boundaries of Franchisee's Territory or within 15 miles of the geographical boundaries any Caring Transitions franchisee's Territory; or
  • (2) promote, sell, procure, provide or solicit referrals for, or offer to sell, procure, provide or solicit referrals for, moving management, estate liquidation or household liquidation services, any Permitted Products and Services, or any other services that are offered in the franchised business, from any Shared Referral Sources (as defined in Section 8.7 above) or in or within 15 miles of the geographical boundaries of

Franchisee's Territory or in or within 15 miles of any other Caring Transitions franchisee's Territory.

The parties agree that the full extent of the damages that Franchisor will incur if a Covenantor fails to comply with their obligations under section 3 or 4 is difficult to ascertain, but the parties nevertheless desire certainty in this matter.

Accordingly, if a Covenantor breaches or fails to comply with any of the provisions of section 3 or 4, they shall pay Franchisor, as liquidated damages and not as a penalty, a royalty equal to 15% of the gross amount of all income, sales, salary, wages, fees, dividends, distributions, and other compensation received or earned by Covenantor or any Covered Person, or to which any of those parties becomes entitled, as the result of the breach or noncompliance.

The parties further agree that the royalty required by this paragraph is reasonable in light of the damages that Franchisor will incur.

This payment is not exclusive of any other remedies that Franchisor may have, including equitable remedies, attorneys' fees, and costs.

Definition of Competitive Business. "Competitive Business" means a business (i) that offers, provides or sells any of the Permitted Products or Services; or (ii) that offers, provides or sells any products or services similar to those offered as part of the Operating System; or (iii) in which Trade Secrets could be used to the disadvantage of Franchisor, Franchisee, or another Caring Transitions Franchise; or (iv) that offers, provides or sells products or services that are otherwise competitive with or may be considered an alternative to any products or services offered by Caring Transitions Franchises; or (v) that franchises or licenses others to do any of the foregoing.

Services that are "otherwise competitive with or may be considered an alternative" to services offered by Caring Transitions Franchises include services that offer or provide alternatives to the sale of personal belongings or move management services or other Permitted Products or Services.

Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 21–22)