Following termination or expiration, can a Craters & Freighters franchisee be employed as an officer of a Competitive Business within their former territory?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Item | Provision | Section in Franchise Agreement | Summary |
|---|---|---|---|
| r. | Non-competition covenants after the franchise is terminated or expires | Section 15.3 | You may not 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 you; 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. You may not divert, attempt to divert, or solicit business or customers of the Franchised Business or any Craters & Freighters Franchised Business to any Competitive Business, by direct or indirect inducement or otherwise. You may not attempt to endorse, or enter into any business competing in whole or in part with us in granting franchisors or licenses, or establishing joint ventures, for Competitive Businesses. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTIONS (FDD pages 36–44)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, a franchisee is restricted from being employed as an officer of a Competitive Business after the franchise is terminated or expires.
The restrictions specify that the franchisee cannot perform 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. This restriction applies (i) at the Premises of the Franchised Business; (ii) within the Territory granted to you; 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.
Additionally, the franchisee is prohibited from diverting or soliciting business or customers of the Franchised Business or any Craters & Freighters Franchised Business to any Competitive Business. They also cannot attempt to endorse or enter into any business competing with Craters & Freighters in granting franchises or licenses, or establishing joint ventures, for Competitive Businesses. These non-competition covenants are designed to protect Craters & Freighters' market share and brand reputation after a franchise agreement ends.