Can a Craters & Freighters franchisee solicit business outside of their territory?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
of this Agreement, "Affiliate" means any person or entity that controls, is controlled by, or is in common control with, Franchisor or Franchisee.
- 1.3 Operation of Franchised Business Limited to Territory. 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. Franchisee acknowledges and agrees that Franchisor, an Affiliate of Franchisor, or designee of Franchisor, as part of Franchisor's business strategy, may advertise or market on behalf of the System in the Territory. Franchisee agrees to abide by Franchisor's then current policies on marketing outside the Territory, if any, and on cooperating with neighboring Craters & Freighters franchisees, as the same may be set forth from time to time in the Operations Manuals. Franchisee acknowledges and agrees that customers residing or operating within the 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 of the type provided by Franchisee from others, including another Craters & Freighters outlet located outside of Franchisee's Territory. Franchisee further acknowledges and agrees that advertising promotions conducted by third parties upon request by Franchisor may inadvertently refer customers residing or operating within the Territory to a Craters & Freighters outlet outside of the Territory.
- 1.4 Servicing in Unsold Adjacent Territories.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, franchisees are generally expected to focus their efforts on attracting and serving customers within their designated territory. While franchisees are expected to devote their best efforts to customers within their territory, they are not required to verify that customers reside or operate within the territory.
However, a Craters & Freighters franchisee can solicit business outside their territory if they obtain advance written approval from the franchisor. The document also states that the franchisee must adhere to Craters & Freighters's policies regarding marketing outside of their territory and cooperate with neighboring franchisees.
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 granted the right to operate in an adjacent territory and that territory is subsequently granted to another franchisee, the original franchisee must cease all promotional efforts in the adjacent territory and return all customer data to Craters & Freighters. Franchisees are obligated to pay royalty fees to Craters & Freighters on adjusted gross sales from customers in their territory and any adjacent territory.