What is a Craters & Freighters franchisee's obligation regarding their best efforts?
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 obligated to devote their best efforts to identifying, attracting, and serving customers within their designated territory. This means a franchisee should actively work to gain and retain customers who reside or operate within their territory. Except when permitted by Craters & Freighters, franchisees must solicit business only in their territory to obtain customers within that territory and will not knowingly solicit business outside of it. However, franchisees are not required to verify that customers reside or conduct business within the territory.
Franchisees must also use their best efforts to incorporate specific terms and conditions, outlined in the Collateral Assignment of Lease and Addendum, into their lease agreement for the business premises. Before executing the lease, the franchisee needs to get the lease approved by Craters & Freighters. This approval will not be unreasonably withheld or delayed.
Craters & Freighters also uses best efforts when directing telephone calls or other communications from prospective customers located in the Territory to Franchisee. However, Craters & Freighters is not obligated to allocate business generated by such telephone calls or other communications to Franchisee.