What are all the fees that a Craters & Freighters franchisee might incur, considering Items 5 and 6?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
As described in this Disclosure Document, we will offer and sell to qualified persons a single-unit franchise to operate a Craters & Freighters Franchised Business located at the franchisee's business premises in accordance with the standards for the System specified in the Operations Manuals ("System Standards") and utilizing our trademarks pursuant to the terms and conditions of the Craters & Freighters Franchise Company Franchise Agreement, a copy which is a part of this Disclosure Document (see ITEM 22). This Disclosure Document describes relevant information about the Franchise.
We offer two types of territories (each a "Territory"): one which will have a population under 1,000,000 people, and another which will have a population of 1,000,000 or more people. If you request, and we approve, a Territory with a population of more than 1,000,000 people, then you will be required to pay us a Supplemental Territory Fee equal to $0.015 per additional person in the Territory. All population determinations will be based upon the latest United States Census information available for the various territories.
We will not operate Craters & Freighters businesses or grant franchises for Craters & Freighters Franchised Businesses in your Territory unless you fail to comply with the Franchise Agreement and we terminate the Franchise Agreement. Your failure to satisfy your minimum performance standards may result in the reduction of, or adjustments to, your Territory.
What This Means (2025 FDD)
According to the 2025 Craters & Freighters FDD, franchisees can expect to pay several fees throughout the term of the franchise agreement. The initial franchise fee varies depending on the territory size, with a supplemental territory fee of $0.015 per additional person for territories exceeding 1,000,000 in population. Franchisees also pay a royalty fee based on Adjusted Gross Sales.
Franchisees are responsible for technology fees to cover software, support, and website maintenance. There is also a Brand Fund Contribution for marketing and advertising efforts. Franchisees may face additional costs for modifications to the Craters & Freighters system, though these expenditures will not exceed $10,000 during the agreement term.
These fees represent significant financial obligations for Craters & Freighters franchisees. Understanding the nuances of each fee, its calculation, and potential impact on profitability is crucial for prospective franchisees. They should carefully review Items 5 and 6 of the FDD and discuss these fees with existing franchisees and a professional advisor to fully grasp the financial implications before investing.