What is the 'Abandonment Period' defined as in the Craters & Freighters franchise agreement?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Post-Term Competition Restriction.
For a period of two (2) years after (a) Restricted Person's relationship with Franchisee ends; (b) the expiration or termination of the Franchise Agreement; or (c) the approved transfer of the Franchise Agreement to a new franchisee, whichever occurs first, Restricted Person will not, without Franchisor's consent, directly or indirectly (such as through an affiliate or a family member) perform any services for, consult for, engage in, acquire, lend money to, extend credit to, have any interest in, or be employed as an officer, director, executive, or principal of any Competitive Business at or within the following areas: (i) at the Premises of the Franchised Business; (ii) within the Territory granted to Franchisee under the Franchisee Agreement; or (iii) within a radius of ten (10) miles of (a) the Premises of the Franchised Business, or (b) the premises of any other Craters & Freighters Franchised Business or any Craters & Freighters company-owned or Affiliate-owned outlet then-existing as of the date of the expiration, transfer, or termination of the Franchise Agreement.
-
- Reasonableness of Restrictions. Restricted Person acknowledges and confirms that the length of the term and geographical restrictions contained in Section 5 above are fair and reasonable and not the result of overreaching, duress, or coercion of any kind. In the event a court of competent jurisdiction rules that any of the restrictions set forth in this Agreement is unenforceable by virtue of its scope or in terms of geographic area, type of business activity prohibited, and/or length of time, Restricted Person agrees to comply with any lesser restriction deemed enforceable by the court.
-
- Enforcement. If Franchisor initiates a legal proceeding to enforce this Agreement and prevails in the proceeding, Restricted Person agrees to reimburse Franchisor for its enforcement costs and expenses, including attorneys' fees.
IN WITNESS WHEREOF, the Parties hereto executed, sealed, and delivered this Agreement on the Effective Date.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, the abandonment period is referred to as the post-term competition restriction. For a period of two years after the relationship with the franchisee ends, or the franchise agreement expires or terminates, or the approved transfer of the franchise agreement to a new franchisee, a restricted person cannot engage with any competitive business without Craters & Freighters' consent.
This restriction applies to performing services for, consulting for, engaging in, acquiring, lending money to, extending credit to, having any interest in, or being employed as an officer, director, executive, or principal of any competitive business. The restrictions are applicable (i) at the premises of the franchised business, (ii) within the territory granted to the franchisee, or (iii) within a 10-mile radius of the franchised business or any other Craters & Freighters franchised, company-owned, or affiliate-owned outlet existing at the time of expiration, transfer, or termination.
This clause prevents former franchisees from leveraging their knowledge and experience gained while operating a Craters & Freighters franchise to directly compete with the brand shortly after their departure. It protects Craters & Freighters' market share and confidential information. The agreement also states that the franchisee acknowledges the reasonableness of these restrictions. If Craters & Freighters has to initiate legal proceedings to enforce this agreement and wins, the restricted person is responsible for reimbursing Craters & Freighters for all enforcement costs and expenses, including attorney's fees.