What is the Craters & Freighters franchisee's territory defined as?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
1. GRANT OF FRANCHISE.
- 1.1 Grant. Subject to the terms and conditions of this Agreement, Franchisor grants to Franchisee a non-exclusive license to operate a Franchised Business at the Premises (as such term is defined below) using the System and the Marks for the Initial Term of this Agreement. Franchisee may not operate the Franchised Business at any site other than the Premises without Franchisor's prior written consent. Franchisee must use the Marks and System only in accordance with the terms and conditions of this Agreement.
- 1.2 Territory. During the Initial Term and any Successor Term (as such terms are defined below), neither Franchisor nor its Affiliates will own, operate or franchise a fixed location for the operation of any other Franchised Business within Franchisee's territory ("Territory") as set forth in Attachment A to this Agreement. For purposes of this Agreement, "Affiliate" means any person or entity that controls, is controlled by, or is in common control with, Franchisor or Franchisee.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, a franchisee's territory is defined in Attachment A of the franchise agreement. During the initial and any subsequent terms, Craters & Freighters or its affiliates will not operate or franchise a fixed location for another Craters & Freighters business within the franchisee's designated territory. The franchise agreement grants a non-exclusive license to operate a Craters & Freighters business at a specific location, referred to as the Premises, using the Craters & Freighters system and trademarks for the duration of the agreement. The franchisee is restricted from operating the business at any location other than the approved Premises without prior written consent from Craters & Freighters.
Craters & Freighters may grant a franchisee the right to promote and service customers in an unsold territory adjacent to the franchisee's territory, termed the "Adjacent Territory." Franchisees are obligated to pay royalty fees on adjusted gross sales from customers within both their primary territory and any assigned Adjacent Territory. However, the ability to service customers or promote the business in an Adjacent Territory does not grant the franchisee any rights to that territory. Craters & Freighters retains the right to grant the Adjacent Territory to another franchisee. If this occurs, the original franchisee must cease all promotional efforts, return customer data, and stop providing services in the Adjacent Territory upon written notice.
Despite these territorial considerations, Craters & Freighters emphasizes that customers have the freedom to choose any Craters & Freighters outlet, regardless of location. The franchise granted is non-exclusive, allowing Craters & Freighters to operate or franchise other outlets outside the franchisee's territory. Craters & Freighters also retains the right to sell similar products or services through alternate channels of distribution, including to National Accounts, within or outside the franchisee's territory. This means that while franchisees have a defined territory, Craters & Freighters maintains significant flexibility in its operations and distribution strategies, which could impact a franchisee's business.