What is the consequence if a Craters & Freighters franchisee violates the assurances made in the 'Statement of Franchisee'?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
ORTH DAKOTA, RHODE ISLAND, SOUTH DAKOTA, VIRGINIA, WASHINGTON, OR WISCONSIN.
IF THE FRANCHISE IS TO BE OPERATED IN, OR YOU ARE A RESIDENT OF, MARYLAND, DO NOT SIGN THIS STATEMENT.
In order to make sure that no misunderstanding exists between you, the Franchisee, and us, Craters & Freighters Franchise Company (also called "Franchisee" or "we") and to make sure that no violations of law might have occurred, and understanding that we are relying on the statements you make in this document, you assure us as follows:
| Cash Flows from Financing Activities: | | | | |---|---|---|---| | Distributions to Shareholder | | | - (4,945,919) | | Due to Shareholder | 2,769,688 | | - | | Net Cash Flows from Financing Activities | 2,769,688 | (4,945,919) | | | Net Increase (Decrease) in Cash and Cash Equivalents | 4,615,333 | (2,279,537) | | | Cash and Cash Equivalents at Beginning of Year | 2,376,316 | 4,655,853 | | | Cash and Cash Equivalents at End of Year | $6,991,649 | $ 2,376,316 | | Craters & Freighters 2025 FDD v2 This document was downloaded from franchimp.com.
Source: Item 23 — RECEIPTS (FDD pages 50–193)
What This Means (2025 FDD)
The 2025 Craters & Freighters Franchise Disclosure Document includes a 'Statement of Franchisee' to ensure there are no misunderstandings between the franchisee and Craters & Freighters Franchise Company and to prevent any legal violations. Craters & Freighters requires this statement with the understanding that they are relying on the statements the franchisee makes in the document. This statement is not applicable to franchisees in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin due to state franchise disclosure laws. Furthermore, the statement should not be signed if the franchise is to be operated in, or the franchisee is a resident of, Maryland.
The 'Statement of Franchisee' includes assurances from the franchisee regarding their understanding of the franchise agreement, the risks involved in the business venture, and the absence of any external promises or agreements not documented in the Franchise Disclosure Document or Franchise Agreement. The franchisee also confirms they have had the opportunity to consult with independent advisors and have been advised to discuss the franchise with existing Craters & Freighters franchisees.
The document states that if there are any matters inconsistent with the statements in the document or if anyone has suggested that you sign this document without all of its statements being true, correct and complete, the franchisee should immediately inform Craters & Freighters Franchise Company. However, the document does not explicitly state the consequences if a franchisee violates the assurances made in the 'Statement of Franchisee'.
Given the absence of explicitly stated consequences within the provided FDD excerpts, it is important for a prospective Craters & Freighters franchisee to seek clarification from the franchisor regarding the ramifications of violating the assurances made in the 'Statement of Franchisee'. This inquiry should cover potential legal and financial repercussions, as well as any impacts on the franchise agreement itself.