Can a Craters & Freighters franchisee independently use alternative channels of distribution without approval?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
You may not independently use alternative channels of distribution to make sales within or outside your Territory without our prior written approval;
- (3) to use and license the use of other proprietary and non-proprietary marks or methods which are not the same as or confusingly similar to our trademarks, whether in alternative channels of distribution or in the operation of a business offering shipping, packaging, crating, receiving and delivery, storage, transportation, moving, logistics, blanket wrap, and freight forwarding services and products, at any location, including within the Territory, which may be similar to or different from the business operated by you;
Source: Item 12 — TERRITORY (FDD pages 29–32)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, franchisees are restricted from independently using alternative channels of distribution. The FDD explicitly states that franchisees must obtain prior written approval from Craters & Freighters before using alternative channels of distribution to make sales, whether within or outside their designated territory. These alternative channels include methods such as the Internet, catalog sales, telemarketing, or other direct marketing approaches. This restriction is in place to allow Craters & Freighters to manage and control these channels.
Craters & Freighters reserves the right to use its trademarks and system to sell products or services similar to those offered by franchisees through any alternate channels of distribution, both within and outside the franchisee's territory, including sales to national accounts. The company also exclusively reserves alternative channels of distribution such as the Internet, catalog sales, telemarketing, or other direct marketing for its own use. This means that Craters & Freighters is not obligated to compensate franchisees even if the company solicits or accepts orders from within the franchisee's territory through these alternative channels.
This policy has significant implications for prospective franchisees. It limits their ability to expand their business through online sales, catalogs, or telemarketing without direct approval from Craters & Freighters. While franchisees are granted an exclusive territory, Craters & Freighters retains control over alternative distribution methods, potentially creating competition within the franchisee's territory. Franchisees need to be aware that Craters & Freighters can market and sell directly to customers in their territory through these channels without any compensation to the franchisee. Therefore, understanding the potential impact of these reserved channels on their business is crucial for any potential franchisee.