Under what conditions can the Caring Transitions Franchisor withhold consent to a transfer?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor shall not be obliged to consent to any such transfer.
- (d) Notwithstanding the provisions of subsection 12.2(b) above, Franchisor is not obligated to consent to any Transfer to a person that owns, operates, franchises, licenses, develops, consults with, manages, is involved in or employed by, or controls a competitive business.
If Franchisor refuses to consent to a transfer under this paragraph, the sole remedy of Franchisee will be to seek a declaratory judgment in a court of competent jurisdiction to determine whether the proposed transferee is a person that owns, operates, franchises, licenses, develops, consults with, manages, is involved in or employed by, or controls a competitive business.
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 franchisor is not obligated to consent to any transfer to a person that owns, operates, franchises, licenses, develops, consults with, manages, is involved in or employed by, or controls a competitive business. This means Caring Transitions can deny a transfer if the potential buyer is involved in a competing business.
If Caring Transitions refuses a transfer based on the potential buyer's involvement in a competitive business, the franchisee's sole recourse is to seek a declaratory judgment in court. This legal action would aim to determine whether the proposed transferee is indeed involved in a competitive business. This process could be costly and time-consuming for the franchisee.
Even if the potential buyer is not involved in a competitive business, Caring Transitions is not obliged to consent to any transfer. This gives Caring Transitions broad discretion over who becomes a franchisee. Prospective franchisees should be aware of this and carefully consider the implications for the future sale of their franchise.