What agreement must the Craters & Freighters franchisee's owner(s) sign contemporaneously with the execution of the Franchise Agreement?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee and Franchisee's owner(s) further acknowledge that these covenants and agreements relating to non-competition and non-solicitation are material inducements for Franchisor to enter into this Agreement, and that it is essential that Franchisee and Franchisee's owner(s) comply with the terms set forth herein.
- 15.2 In-Term Restrictive Covenants.
During the term of this Agreement, Franchisee and Franchisee's owner(s) may not, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership, or corporation:
- 15.2.1 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 business that offers shipping, packaging, crating, receiving and delivery, storage, transportation, moving, logistics, blanket wrap, or freight forwarding services, or products or services similar to the Franchised Business ("Competitive Business") without the prior written consent of Franchisor.
Notwithstanding the foregoing, Franchisee will not be prohibited from owning securities in a Competitive Business if such securities are listed on a stock exchange or traded on the over-the-counter market and represent five percent (5%) or less of that class of securities.
15.2.2 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.
15.3 Post-Term Restrictive Covenants.
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:
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, the franchisee and the franchisee's owner(s) must acknowledge that the covenants and agreements relating to non-competition and non-solicitation are material inducements for Craters & Freighters to enter into the Franchise Agreement. This acknowledgment signifies that the franchisor considers these agreements essential and that the franchisee's and their owner's compliance with these terms is critical.
During the term of the Franchise Agreement, the franchisee and their owner(s) are restricted from engaging in any competitive business activities, such as offering similar services or products, without prior written consent from Craters & Freighters. This includes performing services for, consulting for, or having any interest in a competitive business. However, the franchisee is not prohibited from owning securities in a competitive business if those securities are listed on a stock exchange or traded over-the-counter and represent 5% or less of that class of securities.
Post-termination, for a period of two years after the expiration, transfer, or termination of the Franchise Agreement, the franchisee and their owner(s) are further restricted from engaging in competitive business activities within specific areas. These areas include the premises of the franchised business, the territory granted to the franchisee, or within a 10-mile radius of the franchised business or any other Craters & Freighters outlet. They are also prohibited from diverting or soliciting business or customers to any competitive business.