What does the Craters & Freighters franchise agreement state regarding the franchisee's and owner's acknowledgement of the reasonableness of restrictions in Section 15.3?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
- 15.4 Reasonableness of Restrictions. Franchisee and Franchisee's owner(s) acknowledge and confirm that the length of the term and geographical restrictions contained in Section 15.3 are fair and reasonable and not the result of overreaching, duress, or coercion of any kind. Franchisee and Franchisee's owner(s) also acknowledge and confirm that their full, uninhibited and faithful observance of each of the covenants contained in Section 15.3 will not cause any undue hardship, financial or otherwise, and that enforcement of each of the covenants contained in Section 15.3 will not impair their ability to obtain employment commensurate with their respective abilities and on terms fully acceptable to them.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters FDD, Section 15.4 of the franchise agreement outlines the franchisee's and their owner's acknowledgement regarding the restrictions in Section 15.3, which pertains to post-term restrictive covenants. The franchisee and their owner(s) confirm that the term length and geographical restrictions within Section 15.3 are considered fair, reasonable, and not a result of overreaching, duress, or coercion.
Furthermore, the franchisee and owner(s) acknowledge that adhering to the covenants in Section 15.3 will not cause undue financial or other hardships. They also confirm that enforcing these covenants will not impair their ability to find suitable employment that matches their skills and is acceptable to them.
This acknowledgement is a crucial part of the franchise agreement, indicating that the franchisee and owner(s) have considered the implications of the post-term restrictions and find them acceptable. This clause aims to protect Craters & Freighters' interests by preventing franchisees from using the franchisor's confidential information and business practices to compete against them after the franchise agreement ends. Prospective franchisees should carefully review Section 15.3 and understand the scope and impact of these restrictions before signing the agreement.