What is the consequence if a franchisee defaults on a note receivable with Craters & Freighters?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
31, 2024 and 2023, respectively.
At the Company's discretion, unpaid franchisee balances may be converted to a note receivable with payment terms between twenty-four and thirty-six months, accruing interest at six percent. As of December 31, 2024, there was $16,991 in outstanding notes receivable from franchisees relating to unpaid balances, of which $11,662 is due within one-year and $5,329 is due in 12-24 months. As of December 31, 2023, there were no Franchisee accounts with past due balances converted to notes receivable. Default on notes receivable will result in a termination of the related franchise agreements b
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, if a franchisee defaults on a note receivable, the related franchise agreement between Craters & Freighters and the franchisee will be terminated.
Craters & Freighters may, at its discretion, convert unpaid franchisee balances into a note receivable. These notes have payment terms of 24 to 36 months and accrue interest at a rate of 6%. As of December 31, 2024, the total outstanding notes receivable from franchisees was $16,991. Of this amount, $11,662 is due within one year, and $5,329 is due in 12-24 months.
This policy highlights the importance of franchisees maintaining timely payments to Craters & Freighters to avoid potential default and subsequent termination of their franchise agreement. Prospective franchisees should carefully consider their financial stability and ability to meet ongoing payment obligations before entering into a franchise agreement with Craters & Freighters.