What are the exceptions to the 'Abandonment Period' for a Craters & Freighters franchise?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
credit to, have any interest in, or be employed as an officer, director, executive, or principal of any Competitive Business, as such term is defined in the Franchise Agreement.
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- Post-Term Competition Restriction. For a period of two (2) years after (a) Restricted Person's relationship with Franchisee ends; (b) the expiration or termination of the Franchise Agreement; or (c) the approved transfer of the Franchise Agreement to a new franchisee, whichever occurs first, Restricted Person will not, without Franchisor's consent, directly or indirectly (such as through an affiliate or a family member) 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 the Franchisee 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 the Franchise Agreement.
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- Reasonableness of Restrictions. Restricted Person acknowledges and confirms that the length of the term and geographical restrictions contained in Section 5 above are fair and reasonable and not the result of overreaching, duress, or coercion of any kind. In the event a court of competent jurisdiction rules that any of the restrictions set forth in this Agreement is unenforceable by virtue of its scope or in terms of geographic area, type of business activity prohibited, and/or length of time, Restricted Person agrees to comply with any lesser restriction deemed enforceable by the court.
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- Enforcement. If Franchisor initiates a legal proceeding to enforce this Agreement and prevails in the proceeding, Restricted Person agrees to reimburse Franchisor for its enforcement costs and expenses, including attorneys' fees.
IN WITNESS WHEREOF, the Parties hereto executed, sealed, and delivered this Agreement on the Effective Date.
RESTRICTED PERSON: Name: Address: ACKNOWLEDGED BY FRANCHISOR: CRATERS & FREIGHTERS FRANCHISE COMPANY a Colorado corporation By: Name: Matthew J.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
The 2025 Craters & Freighters Franchise Disclosure Document outlines post-term competition restrictions that apply for two years after the franchise agreement expires, is transferred, or is terminated. These restrictions prevent the franchisee and their owners from engaging in any Competitive Business without Craters & Freighters' consent. A Competitive Business is defined as one that offers shipping, packaging, crating, receiving and delivery, storage, transportation, moving, logistics, blanket wrap, or freight forwarding services, or products or services similar to the Franchised Business.
Specifically, the franchisee cannot perform services for, consult for, engage in, acquire, lend money to, extend credit to, have any interest in, or be employed by a Competitive Business. This prohibition applies (i) at the Premises of the Franchised Business; (ii) within the Territory granted to Franchisee under the Franchisee 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 the Franchise Agreement.
However, the restriction does not apply if Craters & Freighters gives their consent. Also, if a court deems any of the restrictions unenforceable due to its scope, geographic area, type of business activity, or length of time, the Restricted Person agrees to comply with any lesser restriction deemed enforceable by the court. This means that the franchisee may be able to engage in a competitive business if the court reduces the scope of the restrictions. Additionally, the franchisee is not prohibited from owning securities in a Competitive Business if such securities are listed on a stock exchange or traded on the over-the-counter market and represent five percent (5%) or less of that class of securities.