What is the consequence if a Craters & Freighters franchisee fails to pay all amounts owed before a transfer?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
(including, but not limited to, another franchise agreement or a promissory note) and such default has not been cured within the time specified (if any) in such other agreement.
- 19.1.14 Unauthorized Transfer. Franchisee makes an unauthorized transfer of this Agreement (or any interest therein), or any part or all of the ownership of Franchisee or the Franchised Business (or any interest therein) that does not comply with the conditions set forth in Section 16 of this Agreement. This provision also applies to any unauthorized transfer made in connection with Section 18 of this Agreement involving the death or permanent disability of Franchisee or a principal owner of Franchisee.
- 19.1.15 Insolvency. Franchisee becomes insolvent or is adjudicated a bankrupt;
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, if a franchisee fails to meet the conditions set forth in Section 16 of the agreement regarding transfers, it would be considered an unauthorized transfer.
Specifically, Section 19.1.14 states that an unauthorized transfer occurs when a franchisee transfers the agreement (or any interest), or any part or all of the ownership of the franchisee or the franchised business (or any interest), without complying with the conditions in Section 16. This also applies to unauthorized transfers related to the death or permanent disability of the franchisee or a principal owner, as covered in Section 18 of the agreement.
According to section 19.1, Craters & Freighters has the right to terminate the agreement without prior notice to the franchisee if an unauthorized transfer occurs, as this is considered an incurable breach of the agreement.