Following termination or expiration of the Craters & Freighters franchise agreement, is the franchisee's owner required to comply with post-term restrictive covenants?
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 the 2025 Craters & Freighters Franchise Disclosure Document, both the franchisee and the franchisee's owner(s) are subject to post-term restrictive covenants for a period of two years after the expiration, transfer, or termination of the Franchise Agreement. These covenants prevent them from engaging in or being involved with any Competitive Business. This includes performing services for, consulting for, engaging in, acquiring, lending money to, extending credit to, having any interest in, or being employed as an officer, director, executive, or principal of any Competitive Business.
The restrictions apply specifically to the physical location of the Franchised Business, the territory granted to the franchisee, and within a ten-mile radius of both the Franchised Business premises and any other Craters & Freighters Franchised Business or company-owned outlet existing at the time of expiration, transfer, or termination.
Additionally, the franchisee and its owner(s) are prohibited from diverting, attempting to divert, or soliciting business or customers away from the Franchised Business, any Craters & Freighters Franchised Business, or any Craters & Freighters company-owned or Affiliate-owned business to any Competitive Business, whether through direct or indirect means. These restrictions are designed to protect Craters & Freighters's business interests and customer relationships after the franchise agreement ends.