Is a Craters & Freighters franchisee required to exert their best efforts to expand the business?
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 Craters & Freighters Franchise Disclosure Document, franchisees must devote their best efforts to identifying, attracting, and serving customers within their designated territory. This obligation means a franchisee needs to actively work on building their customer base and providing services to those customers who reside or operate within their territory. While franchisees are expected to focus on their territory, they are not required to verify that customers reside or conduct business within the territory.
Craters & Freighters may also grant a franchisee the right to promote and service customers in an unsold territory adjacent to their own, referred to as an "Adjacent Territory." If a franchisee is given these rights, they are obligated to pay royalty fees on adjusted gross sales from customers in both their primary territory and any adjacent territory they are authorized to serve. However, this ability to service an adjacent territory does not grant the franchisee any long-term rights or interests in that adjacent territory.
It's important to note that the Craters & Freighters franchise is non-exclusive. Craters & Freighters retains the right to operate or franchise other outlets outside the franchisee's territory. However, Craters & Freighters will not establish another franchisee or company-owned outlet within the franchisee's territory. Craters & Freighters also retains the right to sell similar products or services through alternate channels of distribution, both within and outside the franchisee's territory, including sales to National Accounts.