Is Craters & Freighters allowed to operate a competing business under a different trademark?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.5 Non-Exclusivity; Franchisor's Reservation of Rights.
Franchisee acknowledges that the franchise granted hereunder is non-exclusive and that Franchisor and its Affiliates retain the exclusive right, among others to:
1.5.1 Own, franchise, or operate Craters & Freighters outlets at any location outside of the Territory, regardless of the proximity to the boundaries of the Territory; provided, however, Franchisor will not establish within the Territory another franchisee or company-owned outlet which may also use the Marks;
1.5.2 Use the Marks and System to sell any products or services similar to those which Franchisee will sell, through any alternate channels of distribution within or outside of the Territory, including to National Accounts (as defined below).
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, Craters & Freighters and its Affiliates retain specific rights regarding the operation of other Craters & Freighters outlets and the sale of similar products or services. Specifically, Craters & Freighters has the right to own, franchise, or operate Craters & Freighters outlets at any location outside of a franchisee's territory. However, Craters & Freighters cannot establish another franchisee or company-owned outlet within the franchisee's territory that also uses the Craters & Freighters marks.
Additionally, Craters & Freighters retains the right to use the Craters & Freighters marks and system to sell similar products or services through any alternate channels of distribution, whether within or outside the franchisee's territory. This includes sales to National Accounts. The franchise granted to the franchisee is non-exclusive, meaning Craters & Freighters reserves these rights.
In practical terms, while Craters & Freighters agrees not to directly compete with a franchisee within their defined territory using the same brand, they retain considerable freedom to operate or franchise other outlets outside the territory and to utilize alternative distribution channels, even within the franchisee's territory, for similar products and services. This is a common practice in franchising, allowing the franchisor to explore different market segments and distribution methods. However, prospective franchisees should carefully consider how these retained rights might impact their business, particularly concerning potential competition from other channels or outlets owned or franchised by Craters & Freighters outside their territory.