What is a Craters & Freighters franchisee prohibited from knowingly doing outside of their territory?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees to devote its best efforts to identifying, attracting, and serving customers who reside or operate within the Territory.
Therefore, except as otherwise permitted herein or as approved in advance and in writing by Franchisor, Franchisee will solicit business only in the Territory for the purpose of obtaining customers who reside or operate within the Territory, and Franchisee will not knowingly solicit business outside of the Territory.
However, Franchisee is not required to verify that customers to the Franchised Business reside or conduct business within the Territory.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 FDD, a Craters & Freighters franchisee must focus on attracting and serving customers within their designated territory. The franchisee is prohibited from knowingly soliciting business outside of their territory, with the aim of obtaining customers who reside or operate outside of it. However, the franchisee is not required to verify where their customers reside or conduct business.
This restriction ensures that franchisees primarily concentrate their efforts within their assigned area, preventing potential conflicts and competition between different franchise locations. It's a common practice in franchising to grant territories to franchisees, providing them with a defined market to develop and serve. This territorial protection aims to give franchisees a competitive advantage and incentivize them to invest in their local business.
Despite this restriction, Craters & Freighters franchisees must be aware that customers have the freedom to choose any Craters & Freighters outlet, regardless of location. Additionally, the franchisor may conduct marketing activities that inadvertently refer customers within a franchisee's territory to an outlet outside of it. Franchisees are also required to follow any marketing policies set by Craters & Freighters regarding activities outside their territory and cooperate with neighboring franchisees.