Must Craters & Freighters approve the lease for the franchise premises?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.2 Lease of Premises. Franchisee acknowledges that Franchisor must approve the lease, and any renewal of such lease (collectively, "Lease") for the Premises of the Franchised Business prior to executing such Lease. Franchisor's approval of such Lease cannot be unreasonably withheld or delayed. Franchisee agrees to use Franchisee's best efforts to incorporate into the Lease the terms and conditions set forth in the form of Collateral Assignment of Lease and Addendum, attached hereto as Attachment D to this Agreement. Franchisee acknowledges that Franchisor's approval of the Lease for the Premises does not constitute a guarantee or warranty by Franchisor, express or implied, of the successful operation or profitability of a Craters & Freighters Franchised Business operated at the Premises and indicates only that Franchisor believes the terms and conditions of the Lease fall within the acceptable criteria established by Franchisor as of that time. Franchisee agrees to deliver a copy of the executed Lease to Franchisor within fifteen (15) days after the execution of such Lease.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, Craters & Freighters requires that franchisees obtain approval for the lease of their business premises, as well as any renewals of that lease. This approval must be secured before the franchisee executes the lease agreement. However, Craters & Freighters cannot unreasonably withhold or delay this approval.
To facilitate the approval process, Craters & Freighters requires franchisees to incorporate specific terms and conditions into their lease, using the form of Collateral Assignment of Lease and Addendum provided as Attachment D to the Franchise Agreement. Franchisees are expected to make their best efforts to include these terms in the lease agreement. Once the lease is executed, the franchisee must provide a copy of the signed lease to Craters & Freighters within fifteen days.
The FDD clarifies that Craters & Freighters' approval of the lease does not act as a guarantee or warranty regarding the potential success or profitability of the franchise at that location. Instead, the approval indicates that the lease terms and conditions meet the criteria established by Craters & Freighters at the time of review. This requirement ensures that the location meets the brand's standards and protects their interests in the event of a default.