What is the Craters & Freighters franchisee's obligation regarding identifying and attracting customers?
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.
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.
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 means actively working to find and retain customers who reside or operate within the defined geographic area. Franchisees are expected to solicit business primarily within their territory to obtain these customers and are generally restricted from knowingly soliciting business outside of it. However, franchisees are not required to verify that each customer resides or conducts business within their territory.
Craters & Freighters, or its affiliates, may also advertise or market on behalf of the entire system within a franchisee's territory as part of their overall business strategy. Franchisees must adhere to Craters & Freighters's policies regarding marketing outside their territory and are expected to cooperate with neighboring franchisees. Customers have the freedom to choose any Craters & Freighters outlet, even those outside the franchisee's territory, and advertising promotions may inadvertently direct customers to other outlets.
Craters & Freighters may grant franchisees the right to promote and service customers in an unsold territory adjacent to their own, known as an "Adjacent Territory." In such cases, the franchisee is obligated to pay royalty fees on all adjusted gross sales from customers in both their primary territory and any Adjacent Territory. However, the right to service an Adjacent Territory does not grant the franchisee any ownership or exclusive rights to that territory. If Craters & Freighters awards the Adjacent Territory to another franchisee, the original franchisee must cease all promotional efforts, return customer data, and stop providing services in that area after receiving written notice.
While franchisees must comply with Craters & Freighters's requirements, customers in Adjacent Territories retain the freedom to choose any Craters & Freighters outlet. The franchise granted is non-exclusive, and Craters & Freighters retains the right to operate or franchise other outlets outside the franchisee's territory. Craters & Freighters can also use its trademarks and system to sell similar products or services through alternate channels of distribution, both within and outside the territory, including to National Accounts.