What is the consequence for a Craters & Freighters franchisee who uses Proprietary Software in violation of the agreement?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
To protect the reputation and goodwill of Franchisor and the System, and to maintain uniform standards of operation under the Marks, Franchisee will conduct the Franchised Business in strict accordance with the specifications, standards, operating procedures, and rules set forth in this Agreement, the Operations Manuals, and otherwise established and communicated by Franchisor (collectively the "System Standards").
Franchisee acknowledges the System Standards are intended to protect Franchisor's standards, systems, names, Marks, Confidential Information, and Trade Secrets (including but not limited to the Proprietary Software) and are not intended to control the day-to-day operation of Franchisee's Franchised Business.
Franchisee further acknowledges and agrees that Franchisee's Franchised Business will be under the control of the Franchisee at all times and that Franchisee will be solely responsible for the day-to-day operation of the business.
Any failure or refusal by Franchisee to comply with the System Standards will be a material default by Franchisee under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
Based on the 2025 Craters & Freighters Franchise Disclosure Document, failure to comply with system standards, including the use of proprietary software, constitutes a material default of the agreement. The FDD states that Craters & Freighters franchisees must conduct their franchised business in strict accordance with the specifications, standards, operating procedures, and rules set forth in the agreement, operations manuals, and other communications from the franchisor, collectively known as the System Standards. These standards are in place to protect Craters & Freighters' reputation, goodwill, trademarks, confidential information, and trade secrets, including the proprietary software.
For a prospective Craters & Freighters franchisee, this means that using the proprietary software as directed is not optional but a requirement of the franchise agreement. The proprietary software is described as the central platform for processing customer jobs and managing royalty reports, so using it incorrectly or not at all would violate the System Standards.
While the FDD excerpt specifies that failure to comply with System Standards is a material default, it does not explicitly detail the specific consequences of such a default. Typically, a material default could lead to penalties, required corrective actions, or even termination of the franchise agreement. A prospective franchisee should seek clarification from Craters & Freighters regarding the specific repercussions of failing to use the proprietary software as required.