In the event of the death or permanent disability of a Craters & Freighters franchisee, who is responsible for transferring the interest in the Franchise Agreement?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon death or permanent disability of Franchisee or a principal owner of Franchisee, the executor, administrator, conservator, guardian, or other personal representative of such person must transfer its interest in this Agreement or such interest in Franchisee to a third party approved by Franchisor. Such disposition of this Agreement or such interest (including, without limitation, transfer by bequest or inheritance) (collectively, "Disposition") must be completed within a reasonable time, not to exceed six (6) months from the date of death or permanent disability ("Disposition Deadline"), and will be subject to all of the terms and conditions applicable to transfers contained in Section 16 of this Agreement including, but not limited to Franchisor's right of first refusal; provided, however, in the event the Disposition has not been completed before the Disposition Deadline because the estate of Franchisee (or a principal owner of Franchisee, as the case may be) has not yet been concluded in probate court, then the Disposition Deadline will be extended until such time that such probate court has completed the probate process, not to exceed a total of twelve (12) months from the date of death or permanent disability. For purposes hereof, the term "permanent disability" will mean a mental or physical disability, impairment, or condition that is reasonably expected to prevent or actually does prevent Franchisee or an owner of a controlling interest in Franchisee from supervising the management and operation of the Franchised Business for a period of six (6) months or more from the onset of such disability, impairment, or condition.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, in the event of the death or permanent disability of a franchisee or a principal owner, the responsibility for transferring the interest in the Franchise Agreement falls to the executor, administrator, conservator, guardian, or other personal representative of the deceased or disabled individual. This representative is obligated to transfer the interest to a third party that is approved by Craters & Freighters.
The transfer, referred to as "Disposition," must be completed within a reasonable timeframe, specifically within six months from the date of death or permanent disability. However, there is an exception: if the estate is still in probate court by the deadline, the deadline is extended up to a total of twelve months from the date of death or permanent disability, allowing sufficient time for the legal proceedings to conclude before the transfer must occur.
The transfer is subject to all the standard terms and conditions applicable to transfers outlined in Section 16 of the Franchise Agreement, including Craters & Freighters's right of first refusal. The FDD defines "permanent disability" as a mental or physical condition that prevents the franchisee or a controlling owner from managing the business for at least six months from the onset of the condition. This ensures clarity on what qualifies as a permanent disability in the context of the agreement.