Does the Craters & Freighters franchise agreement require the franchisee's owner(s) to acknowledge the uniqueness of the System?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee and Franchisee's owner(s) further acknowledge that these covenants and agreements relating to non-competition and non-solicitation are material inducements for Franchisor to enter into this Agreement, and that it is essential that Franchisee and Franchisee's owner(s) comply with the terms set forth herein.
- 15.2 In-Term Restrictive Covenants.
During the term of this Agreement, Franchisee and Franchisee's owner(s) may not, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership, or corporation:
- 15.2.1 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 business 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 ("Competitive Business") without the prior written consent of Franchisor.
Notwithstanding the foregoing, Franchisee will not be 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 securitie
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, the franchise agreement requires both the franchisee and their owner(s) to acknowledge the importance of non-competition and non-solicitation agreements as a key factor that motivates Craters & Freighters to enter into the agreement. This acknowledgment highlights the significance Craters & Freighters places on protecting its business interests and maintaining a competitive edge within the industry.
Specifically, the franchisee and their owner(s) must recognize that their commitment to these covenants is a material inducement for Craters & Freighters to grant the franchise. This means that Craters & Freighters views these agreements as essential for safeguarding its market position, trade secrets, and customer relationships. By agreeing to these terms, the franchisee and their owner(s) assure Craters & Freighters of their dedication to upholding the standards and integrity of the franchise system.
During the term of the agreement, the franchisee and their owner(s) are restricted from engaging in any competitive business activities, either directly or indirectly, without prior written consent from Craters & Freighters. This includes providing services, consulting, investing, or being employed by any business that offers similar shipping, packaging, crating, or logistics services. However, an exception exists for 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.
This requirement ensures that franchisees and their owners remain fully committed to the Craters & Freighters system and do not divert their resources or expertise to competing ventures. The acknowledgement and adherence to these covenants are crucial for maintaining the integrity and competitiveness of the Craters & Freighters franchise network.