During the term of the Caring Transitions franchise agreement, is the franchisee allowed to divert business from other Caring Transitions franchisees to a competitor?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.10 Marketing and Solicitation Restrictions.
Except as permitted by section 1.4, 1.5, or 8.6, Franchisee shall not directly or indirectly: (i) engage in advertising, marketing, or promotional activities in, or that are directed or targeted primarily to, the protected territory of another Caring Transitions franchisee; or (ii) conduct in-person assessments, provide Permitted Products and Services, or provide products and services that compete with Permitted Products and Services, in the protected territory of any other Caring Transitions franchisee.
Any violation of any of the restrictions of this section by Franchisee will constitute a material default of this Franchise Agreement.
Within 10 days after receiving written notice of such violation, Franchisee shall remit to Franchisor all Gross Receipts earned or received from any activities prohibited by this section.
If Franchisee receives a request for services to be provided in the protected territory of another Caring Transitions franchisee, then Franchisee shall promptly notify such other franchisee of the request and provide appropriate contact information for the potential client.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, franchisees are restricted from diverting business from other Caring Transitions franchisees. Specifically, franchisees cannot engage in marketing activities targeted towards another franchisee's protected territory, nor can they provide services that compete with the permitted services within another franchisee's territory. If a franchisee receives a service request from within another franchisee's territory, they are obligated to notify the other franchisee and provide the potential client's contact information. This is to protect each franchisee's territory.
These restrictions are in place to maintain the integrity of the Caring Transitions franchise system and to ensure that franchisees are not undermining each other's businesses. Violating these restrictions constitutes a material breach of the franchise agreement. If a franchisee violates these marketing and solicitation restrictions, they must remit all gross receipts earned from the prohibited activities to Caring Transitions.
This policy is fairly standard in franchising, as franchisors typically implement territorial protections to foster collaboration and prevent destructive competition among franchisees. Prospective franchisees should understand these limitations and how they impact their ability to market and operate their Caring Transitions franchise, especially if their territory is near another franchisee.