What are the consequences of not curing a non-payment default for a Craters & Freighters franchise?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Item | Provision | Section in Franchise Agreement | Summary |
|---|---|---|---|
| g. | "Cause" defined – curable defaults | Section 19.2 | Curable Defaults: You have 30 days to cure |
| any of the following defaults: non-payment of | |||
| any amount due and owing to us or any | |||
| Affiliate of ours as required by us pursuant to | |||
| the Franchise Agreement, Operations Manuals, | |||
| or otherwise; failure or refusal to submit, when | |||
| i. | Franchisee's obligations on termination/non-renewal | Sections 15.3, 20.1, and 20.2 | Pay all amounts due, discontinue use of Marks, discontinue use of Confidential Information and Trade Secrets, discontinue use of telephone numbers associated with the Franchised Business, and comply with post-term non competition and non-solicitation covenants. Upon the termination or expiration of the Franchise Agreement, we will have the option, but not the obligation, to purchase any and all of the assets used by you to operate the Franchised Business at a purchase price equal to net depreciated book value. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTIONS (FDD pages 36–44)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, failing to cure a non-payment default can lead to termination of the franchise agreement. Craters & Freighters allows a 30-day period to cure a non-payment default, which includes non-payment of any amount due to Craters & Freighters or its affiliates as required by the Franchise Agreement or Operations Manuals.
If the franchisee fails to pay all amounts due within this 30-day cure period, Craters & Freighters can terminate the franchise agreement. Upon termination, the franchisee must pay all amounts due, discontinue the use of Craters & Freighters' marks, confidential information, and trade secrets, and discontinue using telephone numbers associated with the business. Additionally, the franchisee must comply with post-term non-competition and non-solicitation covenants.
Furthermore, Craters & Freighters has the option, but not the obligation, to purchase any or all of the assets used by the franchisee to operate the franchised business at a purchase price equal to the net depreciated book value. This means that the franchisee could lose their business and be forced to sell their assets to Craters & Freighters at a potentially unfavorable price. The franchisee will also be restricted from operating a similar business in a specific area after termination.