Does a Craters & Freighters franchisee have a right to acquire an Adjacent Territory if they service it?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges and agrees that neither the ability to service nor the grant of Franchisor's permission to service customers residing or operating in any Adjacent Territory affords Franchisee any right, title, or interest in or to such Adjacent Territory whatsoever, including the ability to do further business in the Adjacent Territory after it is granted to a third party (including any right to acquire such Adjacent Territory or any right of first refusal as to such Adjacent Territory).
If the right to operate in the Adjacent Territory is subsequently granted by Franchisor to another Craters & Freighters franchisee through the sale of a franchise, Franchisee agrees to, upon receipt of written notice from Franchisor, cease all promotional and advertising efforts within the Adjacent Territory, return to Franchisor all customer data and prospect information related to the Adjacent Territory, and cease providing products and services to customers in the Adjacent Territory.
Franchisee will use its best efforts to comply with Franchisor's requirements set forth herein, but Franchisor and Franchisee acknowledge and agree that customers residing or operating within the Adjacent Territory are entitled the freedom to choose any Craters & Freighters outlet which they believe will best serve them and their needs, and that they may seek service from Franchisee.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, a franchisee does not automatically gain rights to an adjacent territory, even if they are permitted to service customers in that area. The ability to serve customers or receiving permission to do so in an adjacent territory does not give the franchisee any ownership or acquisition rights to that territory. This includes no right to acquire the adjacent territory or any right of first refusal.
If Craters & Freighters grants the right to operate in the adjacent territory to another franchisee, the original franchisee must cease all promotional and advertising efforts within that adjacent territory. They are also required to return all customer data and prospect information related to the adjacent territory to Craters & Freighters and stop providing products and services to customers in that area.
However, Craters & Freighters acknowledges that customers in the adjacent territory have the freedom to choose any Craters & Freighters outlet, including the original franchisee, if they believe it will best serve their needs. This highlights that while franchisees may service adjacent territories, Craters & Freighters retains control over territory assignments and can reassign territories as it sees fit.