After the termination of a Caring Transitions franchise agreement, is a franchisee prohibited from owning a business offering moving management services within 15 miles of another Caring Transitions franchisee's territory?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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.
- (b) Subparagraphs (a)(1) and (a)(2) above are severable and contain different but overlapping restrictions that shall be enforced simultaneously whenever permitted by applicable law.
If any of those subparagraphs is held to be invalid or unenforceable in any respect, then such provision is to be modified to the extent necessary to permit its enforcement, and the remaining provisions will be unaffected thereby.
Franchisee specifically acknowledges and agrees that the geographic and temporal restrictions on Franchisee's ability to compete with Franchisor and Franchisor's franchisees are reasonable and necessary to protect Franchisor's business interests in the relevant markets.
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 restricted from engaging in certain business activities after the termination of their franchise agreement. Specifically, for two years following the termination, the franchisee cannot own, maintain, operate, or have any interest in a business that offers moving management, estate liquidation, or household liquidation services. This restriction applies if the business is located within 15 miles of the franchisee's former territory or within 15 miles of any other Caring Transitions franchisee's territory.
This post-termination covenant aims to protect Caring Transitions' market and the interests of its franchisees by preventing former franchisees from directly competing and leveraging the knowledge and experience gained during their franchise term. The restrictions apply regardless of the reason for termination, whether it be expiration, termination, or transfer of the agreement.
Furthermore, the franchisee is also prohibited from promoting, selling, or soliciting referrals for these services from shared referral sources or within the same 15-mile radius of their former territory or any other Caring Transitions franchisee's territory. This includes indirect involvement through other entities like a spouse, child, or another company. These restrictions are designed to be severable and enforceable to the fullest extent permitted by law, ensuring that if one part is deemed invalid, the remaining provisions still hold.
Caring Transitions emphasizes that these geographic and temporal restrictions are reasonable and necessary to protect its business interests and those of its franchisees in the relevant markets. Franchisees acknowledge and agree to these terms, recognizing the importance of these protections for the overall health and stability of the Caring Transitions franchise system.