What are the Craters & Freighters franchisee's obligations regarding compliance with the lease?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
ng, training, wage and hour requirements, compensation, promotion, record-keeping, supervision, discipline, and workplace safety of employees, paid or unpaid, full or part-time.
- 6.12 Compliance with Lease. Franchisee must comply with both the Lease and any additional leasehold covenants and regulations of the building in which the Premises is located. In the event the landlord of the Premises terminates the Lease due to Franchisee's default of such Lease, such termination of the Lease will also constitute a material breach of this Agreement by Franchisee, so long as Franchisor verifies Franchisee's alleged default(s) of such Lease.
- 6.13 Compliance with System Standards. To protect the reputation and goodwill of Franchisor and the System, and to maintain uniform standards of operation under the Marks, Franchisee will conduct the Franchised Business in strict accordance with the specifications, standards, operating procedures, and rules set forth in this Agreement, the Operations Manuals, and otherwise established and communicated by Franchisor (collectively the "System Standards"). Franchisee acknowledges the System Standards are intended to protect Franchisor's standards, systems, names, Marks, Confidential Information, and Trade Secrets (including but not limited to the Proprietary Software) and are not intended to control the day-to-day operation of Franchisee's Franchised Business. Franchisee further acknowledges and agrees that Franchisee's Franchised Business will be under the control of the Franchisee at all times and that Franchisee will be solely responsible for the day-to-day operation of the business.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, franchisees must adhere to the terms of their lease agreement and any additional leasehold covenants or building regulations. This means the franchisee is responsible for understanding and fulfilling all obligations outlined in the lease, such as paying rent on time, maintaining the premises, and adhering to any specific rules set by the landlord.
Craters & Freighters requires that the franchisee use their best efforts to incorporate the terms and conditions set forth in the form of Collateral Assignment of Lease and Addendum, attached as Attachment D to the Franchise Agreement, into the lease. The franchisee must also provide Craters & Freighters with a copy of the executed lease within 15 days of signing it, and Craters & Freighters must approve the lease and any renewals before execution; however, such approval cannot be unreasonably withheld or delayed. While Craters & Freighters's approval indicates that the lease terms meet their criteria, it does not guarantee the franchisee's business success or profitability at that location.
Failure to comply with the lease can have serious consequences. If the landlord terminates the lease due to the franchisee's default, it constitutes a material breach of the Franchise Agreement with Craters & Freighters, provided Craters & Freighters verifies the default. This could lead to further penalties or even termination of the franchise agreement. Therefore, franchisees must carefully review and understand the lease terms and ensure they can meet all obligations to avoid potential issues.
Prospective Craters & Freighters franchisees should pay close attention to the lease terms and conditions, seeking legal counsel if needed, to fully understand their obligations and potential risks. Maintaining a positive relationship with the landlord and adhering to the lease agreement is crucial for the stability and success of the franchise.