After the Craters & Freighters agreement expires, for how long are the post-term restrictive covenants in effect?
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 Craters & Freighters' 2025 Franchise Disclosure Document, the post-term restrictive covenants are in effect for two years after the franchise agreement expires, is transferred, or is terminated. During this two-year period, the franchisee and their owners are restricted from engaging in or being involved with any competitive business. This includes performing services, consulting, being employed by, or having any financial interest in a competitive business within specific areas.
The restricted areas include the premises of the franchised business, the territory granted to the franchisee, and within a ten-mile radius of the franchised business or any other Craters & Freighters location. These restrictions prevent a former franchisee from directly competing with Craters & Freighters by leveraging the knowledge and experience gained during their time as a franchisee.
These post-term covenants also prevent the franchisee from diverting or soliciting business or customers away from the Craters & Freighters franchise to a competitive business. This includes actively attempting to take customers from the existing Craters & Freighters network, which is a common protective measure in franchising to maintain brand integrity and customer loyalty. The restrictions apply to the franchisee and their owners, ensuring that they cannot bypass the agreement by operating through another entity or individual.