Does Craters & Freighters disclaim any warranty or guarantee as to the potential profits of the franchised business?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges that Franchisor must approve the lease, and any renewal of such lease (collectively, "Lease") for the Premises of the Franchised Business prior to executing such Lease. Franchisor's approval of such Lease cannot be unreasonably withheld or delayed. Franchisee agrees to use Franchisee's best efforts to incorporate into the Lease the terms and conditions set forth in the form of Collateral Assignment of Lease and Addendum, attached hereto as Attachment D to this Agreement. Franchisee acknowledges that Franchisor's approval of the Lease for the Premises does not constitute a guarantee or warranty by Franchisor, express or implied, of the successful operation or profitability of a Craters & Freighters Franchised Business operated at the Premises and indicates only that Franchisor believes the terms and conditions of the Lease fall within the acceptable criteria established by Franchisor as of that time. Franchisee agrees to deliver a copy of the executed Lease to Franchisor within fifteen (15) days after the execution of such Lease.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, Craters & Freighters approval of a franchisee's lease for their business premises does not constitute a guarantee or warranty regarding the potential profitability of the franchise. This means that while Craters & Freighters must approve the lease, this approval is only an indication that the lease terms meet the company's established criteria at that time. It does not ensure the franchisee's success or profitability at that location.
This disclaimer is important for prospective franchisees to understand. The approval of a lease by Craters & Freighters should not be interpreted as a promise of financial success. Franchisees must conduct their own due diligence and assess the potential profitability of a location independently. Factors such as market conditions, competition, and local demographics should be carefully considered.
This type of disclaimer is common in franchising. Franchisors typically do not guarantee the profitability of individual franchise locations because many factors influencing a business's success are outside of the franchisor's direct control. These factors include the franchisee's management skills, local market conditions, and the franchisee's ability to follow the franchisor's system.
Therefore, a prospective Craters & Freighters franchisee should not rely solely on the franchisor's lease approval as an indicator of potential profits. They should conduct thorough market research, develop a comprehensive business plan, and seek professional advice to assess the financial viability of the franchise opportunity.