Is a Craters & Freighters franchisee allowed to solicit business outside of their Territory?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
You may only solicit business in the Territory for the purpose of obtaining customers who reside or operate within the Territory, and you cannot knowingly solicit business outside of the Territory. However, you are not required to verify that your customers reside or conduct business within the Territory. Accordingly, it is possible that you may provide services to customers who reside or conduct business outside of the Territory. At the same time, it is also possible that another Craters and Freighters Franchised Business may provide services to customers who reside or conduct business within the Territory.
You may be granted, in our sole discretion, express permission to promote and advertise your Franchised Business to customers in an unsold territory adjacent to your Territory ("Adjacent Territory"). If we permit you do to so, you must agree that if the Adjacent Territory is granted to another Craters & Freighters franchisee, you will, upon receipt of written notice from us, cease all promotional and advertising efforts within the Adjacent Territory, return to us all customer data and prospect information related to the Adjacent Territory, and cease providing products and services to customers in the Adjacent Territory.
You do not have the right to use other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing, to make sales outside of your Territory. If you receive information on prospective business outside of your Territory, you must relay the information to the owner of the Franchise who owns the Territory where the business is located. In areas where there are no Craters & Freighters Franchised Businesses, you may provide services to the prospective client.
You will not receive options, rights of first refusal, or similar rights to acquire additional franchises. You may relocate your Franchised Business to another location within your Territory upon our prior written approval.
Source: Item 12 — TERRITORY (FDD pages 29–32)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, franchisees are generally restricted from actively seeking customers outside their designated territory. The FDD states that franchisees "may only solicit business in the Territory for the purpose of obtaining customers who reside or operate within the Territory, and you cannot knowingly solicit business outside of the Territory." This means Craters & Freighters franchisees should focus their marketing and sales efforts within their assigned geographical area. However, franchisees are not required to verify where their customers reside or conduct business, so providing services to customers outside the territory is possible.
There are exceptions to this rule. Craters & Freighters may grant a franchisee express permission to promote and advertise in an unsold territory adjacent to their own. However, this permission comes with conditions. If the adjacent territory is later granted to another franchisee, the original franchisee must cease all promotional activities in that area, return all customer data and prospect information, and stop providing services to customers there. This highlights the importance of understanding the potential limitations and conditions associated with expanding marketing efforts beyond the primary territory.
Furthermore, Craters & Freighters reserves specific rights regarding alternative channels of distribution, such as the Internet, catalog sales, and telemarketing. Franchisees cannot use these channels to make sales outside their territory without prior written approval from Craters & Freighters. If a franchisee receives information about prospective business outside their territory, they are required to pass that information on to the franchisee who owns the territory where the business is located. However, in areas where there are no existing Craters & Freighters franchises, a franchisee may provide services to the prospective client. This caveat provides some flexibility in serving clients in unfranchised areas.
Craters & Freighters also retains the right to implement multi-area marketing programs that may allow the company or others to solicit or sell to customers anywhere, including national accounts. Franchisees are subject to mandatory policies to coordinate these multi-area marketing programs. These stipulations emphasize that while franchisees have an exclusive territory, Craters & Freighters maintains control over broader marketing strategies and alternative distribution channels, which could impact a franchisee's business operations and revenue potential.