For what duration does the Owner's Guaranty apply to the obligations of the Franchisee to Craters & Freighters?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of two (2) years after the expiration, transfer, or termination of this Agreement, Franchisee and its owner(s) may not, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership, or corporation:
15.3.1 Perform any services for, consult for, engage in, acquire, lend money to, extend credit to, have any interest in, or be employed as an officer, director, executive, or principal of any Competitive Business at or within the following areas: (i) at the Premises of the Franchised Business; (ii) within the Territory granted to Franchisee under this Agreement; or (iii) within a radius of ten (10) miles of (a) the Premises of the Franchised Business, or (b) the premises of any other Craters & Freighters Franchised Business or any Craters & Freighters company-owned or Affiliate-owned outlet then-existing as of the date of the expiration, transfer, or termination of this Agreement.
15.3.2 Divert, attempt to divert, or solicit business or customers of the Franchised Business, any Craters & Freighters Franchised Business, or any Craters & Freighters company-owned or Affiliate-owned business, to any Competitive Business by direct or indirect inducement or otherwise.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, the Owner's Guaranty extends for a period of two years following the expiration, transfer, or termination of the Franchise Agreement. During this time, both the franchisee and their owner(s) are subject to certain restrictive covenants. These covenants prevent them from engaging in competitive business activities within a specified area.
Specifically, the franchisee and their owner(s) are prohibited from performing services for, consulting for, or being involved with any Competitive Business. This includes being an officer, director, executive, or principal of such a business. The restrictions apply at the premises of the franchised business, within the territory granted to the franchisee, or within a 10-mile radius of the franchised business or any other Craters & Freighters outlet.
Additionally, the franchisee and their owner(s) are barred from diverting or soliciting business or customers away from the Craters & Freighters network to any Competitive Business. These post-term restrictive covenants are designed to protect Craters & Freighters's interests and prevent former franchisees from using their knowledge and experience to directly compete with the brand shortly after leaving the system.