Are there any Caring Transitions management employees who are NOT required to execute the Employment Agreement?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
7.20 Covenants of Employees and Agents. Franchisee shall require each of its management employees (except those individuals required to execute a Restrictive Covenant Agreement pursuant to section 15.9), at the time of the commencement of their association with Franchisee, to execute an "Employment Agreement" containing provisions:
- (a) requiring that all Confidential Information (as defined in section 10.1) that may be acquired by or imparted to the person in connection with their association with Franchisee (including the Manual, any proprietary software provided by Franchisor, and all information contained therein) be held in strict confidence and used solely for the benefit of Franchisee or Franchisor during their association with Franchisee and at all times thereafter;
- (b) prohibiting the person, during their association with Franchisee, from diverting or attempting to divert any business or customer of the Franchised Business or of any other Caring Transitions franchisee to any competitor of the franchised business, by direct or indirect inducement or otherwise;
- (c) prohibiting the person, during their association with Franchisee, from doing or performing, directly or indirectly, any act injurious or prejudicial to the goodwill associated with the Marks and the System; and
- (d) prohibiting the person, during their association with Franchisee and for a continuous period of one year (or the maximum period permitted or enforced by the laws of the state in which the Franchised Business is located, if such period is less than one year, but in no event less than six months) after the termination of their association with Franchisee, from operating, owning, maintaining, promoting, engaging in, or performing services for (as an employee or otherwise) any competitor of the franchised business.
Franchisee shall provide Franchisor with executed copies of all Employment Agreements required by this section. Franchisee may not grant any person enumerated above access to any confidential aspect of the System or the Franchised Business before their execution of an Employment Agreement. All Employment Agreements required by this section must be in a form satisfactory to Franchisor and must specifically identify Franchisor as a third-party beneficiary with the independent right to enforce the agreement. Franchisee's failure to obtain the execution of all Employment Agreements required by this section and provide copies thereof to Franchisor is a material breach of this agreement.
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 generally required to have their management employees sign an Employment Agreement. However, there is an exception for individuals who are required to execute a Restrictive Covenant Agreement under section 15.9 of the agreement. These individuals are not required to sign the Employment Agreement.
The Employment Agreement mandates that employees maintain the confidentiality of sensitive information, such as the contents of the manual and proprietary software. It also prevents them from engaging in activities that could harm the Caring Transitions brand or divert business to competitors.
Furthermore, the Employment Agreement includes a non-compete clause that restricts employees, for a period after their association with the franchisee ends, from working for a competitor. This period is one year or the maximum period permitted by state law, but no less than six months. The franchisee must provide Caring Transitions with copies of all executed Employment Agreements and cannot allow employees access to confidential information before they sign the agreement. Failure to obtain these agreements is considered a material breach of the franchise agreement.