After the Craters & Freighters agreement expires, what geographic areas are covered by the post-term restrictive covenants?
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.
15.3.2 Divert, attempt to divert, or solicit business or customers of the Franchised Business, any Craters & Freighters Franchised Business, or any Craters & Freighters company-owned or Affiliate-owned business, to any Competitive Business by direct or indirect inducement or otherwise.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, after the franchise agreement expires, franchisees are subject to certain geographic restrictions for two years. Specifically, the franchisee (or related parties) cannot be involved with a competitive business within these areas:
First, the physical location (Premises) of the former Craters & Freighters franchise is off-limits. Second, the territory that was originally granted to the franchisee in the Franchise Agreement is included. Finally, a ten-mile radius around both the former franchise location and the locations of any other existing Craters & Freighters franchises, company-owned, or affiliate-owned outlets is restricted. These restrictions are based on the locations that exist at the time of the agreement's expiration, transfer, or termination.
These post-term covenants prevent a former Craters & Freighters franchisee from leveraging the knowledge and experience gained during the franchise term to unfairly compete with the franchisor or other franchisees in the immediate vicinity. The restrictions apply not only to the franchisee but also to their owners, preventing them from circumventing the agreement by operating through other entities or individuals. Craters & Freighters can pursue legal action to enforce these restrictions, and the franchisee may be responsible for covering Craters & Freighters's legal costs if Craters & Freighters prevails in court.