During the term of the Caring Transitions franchise agreement, can a franchisee own or have interest in a business offering estate liquidation services without written consent from the franchisor?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.7 Permitted Activities.
The rights granted to Franchisee under this Agreement are limited to the sale of Permitted Products and Services to clients within the Territory.
Franchisee shall not promote, offer, sell, provide, or distribute any other goods or services without Franchisor's prior written approval.
- 1.8 Reserved Rights of Franchisor.
Franchisor specifically reserves all rights not expressly granted to Franchisee in this agreement.
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.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the franchise agreement places restrictions on a franchisee's involvement in similar businesses, specifically after the agreement's termination. During the term of the Caring Transitions franchise agreement, the franchisee is limited to selling only approved products and services within their designated territory. To offer any additional goods or services outside of what is already approved, the franchisee must obtain prior written consent from Caring Transitions. This clause ensures that franchisees focus on the core offerings of the Caring Transitions system and maintain brand consistency.
However, the FDD excerpt does not explicitly state whether a franchisee can own or have interest in a business offering estate liquidation services during the term of the franchise agreement. The document does state that after the termination of the franchise agreement, the franchisee is restricted from owning, maintaining, operating, engaging in, or having any interest in any business offering estate liquidation services for a period of two years. This restriction applies within 15 miles of the franchisee's territory or any other Caring Transitions franchisee's territory, unless Caring Transitions provides written approval.
Because the excerpt focuses on post-termination restrictions, it is important for a prospective franchisee to clarify with Caring Transitions the specific policies regarding outside business interests during the active term of the franchise agreement. Understanding these limitations is crucial for anyone considering investing in a Caring Transitions franchise, as it directly impacts their ability to pursue other business ventures concurrently.