During the term of the franchise agreement, can a Caring Transitions franchisee own an interest in any business that competes with the franchise?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
You may not compete with, or own an interest in any business that competes with, your franchise anywhere during the term of your franchise agreement, or in or within 15 miles of your territory or any other franchisee's territory for 2 years after the expiration or termination of your franchise agreement. You may not solicit any "shared referral sources" (wherever located) for 2 years after the expiration or termination of your franchise agreement (see Item 12 for an explanation of "shared referral sources"). If the franchisee is a corporation, partnership, limited liability company, or other entity, the restrictions in this paragraph also apply to all of the owners of the franchisee. If the franchisee is a corporation, partnership, limited liability company, or other entity, all of its owners must sign a written agreement to maintain the confidentiality of any confidential information about Caring Transitions or your business that may be disclosed to them, and a written agreement (a sample of this agreement is attached to this disclosure document as Exhibit H) personally guaranteeing all of the franchisee's obligations under the franchise agreement. The spouse of an owner is not required to sign a guaranty unless he or she has an ownership interest in the franchise.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 33)
What This Means (2025 FDD)
According to Caring Transitions's 2025 Franchise Disclosure Document, franchisees are restricted from engaging in competitive business activities during the term of their franchise agreement. Specifically, a franchisee cannot own an interest in any business that competes with their Caring Transitions franchise. This restriction applies throughout the duration of the franchise agreement.
This non-compete obligation extends beyond just the franchisee. If the franchisee is a corporation, partnership, limited liability company, or other entity, these restrictions also apply to all of the owners of the franchisee. Furthermore, all owners must sign agreements to maintain confidentiality and personally guarantee the franchisee's obligations under the franchise agreement.
After the franchise agreement expires or is terminated, the franchisee is further restricted from competing with Caring Transitions. For a period of two years following the end of the agreement, the franchisee cannot compete within their territory or within 15 miles of any other Caring Transitions franchisee's territory. They are also prohibited from soliciting shared referral sources for two years after the agreement ends. These measures are designed to protect Caring Transitions's market share and referral networks.