What is the 'Abandonment Period' for a Craters & Freighters franchise, and what circumstances are considered exceptions?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of two (2) years after the expiration, transfer, or termination of this Agreement, Franchisee and its owner(s) may not, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership, or corporation:
- 15.3.1 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 this 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 this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the 'abandonment period,' or the post-term restrictive covenant, lasts for two years after the franchise agreement's expiration, transfer, or termination. During this period, the franchisee and their owners are restricted from engaging in any competitive business activities within specific areas. These restricted activities include performing services for, consulting for, engaging in, acquiring, lending money to, extending credit to, having any interest in, or being employed by a Competitive Business.
The geographical limitations during this two-year period include (i) the premises of the franchised business, (ii) the territory granted to the franchisee, or (iii) within a ten-mile radius of either the franchised business's premises or the premises of any other Craters & Freighters franchised, company-owned, or affiliate-owned outlet existing at the time of expiration, transfer, or termination. This prevents former franchisees from directly competing with existing Craters & Freighters locations.
The FDD does not explicitly detail any specific 'exceptions' to these post-term restrictive covenants. However, it does state that the franchisor's consent can allow a restricted person to engage in activities that would otherwise be prohibited. Additionally, if a court deems any restriction unenforceable due to its scope, geographic area, type of business activity, or length of time, the restricted person must comply with any lesser restriction the court deems enforceable. This suggests that the restrictions are subject to legal review and potential modification based on specific circumstances.