Does Craters & Freighters have to approve a transfer if all conditions are met?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
e Franchised Business in the event of the death of Franchisee or an owner of Franchisee by will, declaration of or transfer in trust, or under the laws of interstate succession.
- 16.3 Conditions for Approval of Transfer. So long as Franchisee and its owner(s) are in full compliance with this Agreement as of the date of the transfer, Franchisor will not reasonably withhold its approval of a transfer that meets all of the following conditions prior to or concurrently with the effective date of the transfer:
- 16.3.1 No Default. Franchisee and Franchisee's owner(s) have performed all obligations and duties under this Agreement.
- 16.3.2 Payments. Franchisee has paid all Royalty Fees, Marketing Fund Contributions, Insurance Payments, Technology Fees, and other amounts owed by Franchisee to Franchisor, any Affiliate of Franchisor, and any third-party creditors relating to the Franchised Business.
- 16.3.3 Governmental Compliance. The transfer is conducted in compliance with applicable laws and regulations.
- 16.3.4 Standards for Franchisees and Franchisee Owners. The transferee and its owner(s) are individual(s) of good moral character, have sufficient business experience, aptitude, and financial resources to operate the Franchised Business, and have otherwise met Franchisor's then-applicable standards for franchisees and franchisee owners.
- 16.3.5 Training. The transferee and/or its management personnel have completed Franchisor's Initial Training Program to Franchisor's satisfaction.
- 16.3.6 Transfer Fee. Franchisee or the transferee has paid Franchisor a transfer fee ("Transfer Fee") in the amount of Fifteen Thousand Dollars and Zero Cents ($15,000.00) to defray expenses Franchisor incurs in connection with the transfer (unless the transfer is to or among then-existing owners of Franchisee).
- 16.3.7 Release. Franchisee and its owner(s) have executed a general release, in a form satisfactory to Franchisor, of
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the franchisor's approval of a franchise transfer will not be unreasonably withheld as long as the franchisee and its owners are in full compliance with the agreement as of the transfer date and the transfer meets specific conditions. These conditions include the franchisee and its owners fulfilling all obligations and duties under the agreement, and having paid all owed Royalty Fees, Marketing Fund Contributions, Insurance Payments, Technology Fees, and other amounts. The transfer must also comply with all applicable laws and regulations.
Furthermore, the transferee and their owners must be of good moral character, possess sufficient business experience, aptitude, and financial resources to operate the franchised business, and meet Craters & Freighters' then-applicable standards for franchisees and owners. The transferee or their management personnel must complete Craters & Freighters' Initial Training Program to the franchisor's satisfaction. Additionally, a transfer fee of $15,000 must be paid to cover the franchisor's expenses related to the transfer, unless the transfer is among existing owners of the franchisee.
Finally, the franchisee and its owners must execute a general release, in a form satisfactory to Craters & Freighters, releasing any claims against the franchisor, its subsidiaries, affiliates, and their respective stakeholders. Meeting all these conditions ensures that Craters & Freighters will not unreasonably withhold approval of the transfer, providing a clear path for franchisees looking to transfer their business while maintaining the standards and integrity of the Craters & Freighters franchise system.