Does the Craters & Freighters Franchise Agreement provide a definition of 'Affiliate'?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
h. "Cause" defined – non-curable Section 19.1 Non-Curable Defaults: failure or refusal to defaults open the Franchised Business within 90 days after execution of the Franchise Agreement; the making of any material misrepresentation or omission in applying to be a Craters & Freighters franchisee; you or any other required attendee(s) fail to attend and complete, to our satisfaction, the initial training program; abandonment of the Franchised Business; criminal conduct by you, any principal owner of the franchisee entity, or any owner of franchisee entity owning more than owner of the franchisee entity, or any owner of franchisee entity owning more than 10% of the franchisee entity engages in any act or conduct which, in our sole determination, materially impairs the goodwill and/or reputation of the System or Marks, and you fail or refuse to take corrective measures to promptly minimize or eliminate the negative impact of such act or conduct; repeated non-payment of any amount due and owing to us or any Affiliate of ours as required by us pursuant to the Franchise Agreement, Operations Manuals, or otherwise; a course of conduct which includes any misrepresentations or deceptive or unlawful acts or practices in connection with offering and/or selling products and services to customers; failure, refusal, or neglecting to take appropriate and necessary measures to protect any employee or customer from imminent and significant danger due to any health or safety matter in connection with the operation of the Franchised Business (or committing repeated violations of any health or safety-related law, standard, or practice); unauthorized use or disclosure of the Marks, Confidential Information, Trade Secrets, Operations Manuals, or Proprietary Software; intentional understatement of the Franchised Business's Adjusted Gross Sales in any report or financial statement; failure or refusal to comply with any of the in-term restrictive covenants set forth in the Franchise Agreement; uncured default under any other agreement with us or any of our Affiliates 10% of the franchisee entity; you, any principal (including, but not limited to, another franchise agreement or a promissory note); unauthorized
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTIONS (FDD pages 36–44)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, the term "Affiliate" is referenced within the context of various obligations and rights, but a specific definition of the term is not provided in the excerpts.
Specifically, the term "Affiliate" appears in relation to non-curable defaults, conditions for franchisor's approval of transfer, and non-competition covenants. For instance, a non-curable default can occur if there is repeated non-payment of any amount due to Craters & Freighters or any of its Affiliates. Also, a franchisee needs to have paid all amounts due to Craters & Freighters, any Affiliate, and any third-party creditors to get the franchisor's approval for a transfer. Furthermore, after the franchise is terminated or expires, the franchisee may not perform services for or be associated with any Competitive Business near any Craters & Freighters company-owned or Affiliate-owned outlet.
Since the FDD excerpts do not provide a specific definition, it is important for a prospective Craters & Freighters franchisee to seek clarification from the franchisor regarding the precise meaning of "Affiliate." Understanding this term is crucial because it affects various aspects of the franchise agreement, including grounds for default, transfer conditions, and post-termination obligations. A franchisee should confirm what entities are considered Affiliates to fully understand their financial and operational obligations and restrictions.