What is the geographic scope of the post-term competition restriction for Craters & Freighters, in relation to other Craters & Freighters businesses?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of two (2) years after the expiration, transfer, or termination of this Agreement, Franchisee and its owner(s) may not, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership, or corporation:
- 15.3.1 Perform any services for, consult for, engage in, acquire, lend money to, extend credit to, have any interest in, or be employed as an officer, director, executive, or principal of any Competitive Business at or within the following areas: (i) at the Premises of the Franchised Business; (ii) within the Territory granted to Franchisee under this Agreement; or (iii) within a radius of ten (10) miles of (a) the Premises of the Franchised Business, or (b) the premises of any other Craters & Freighters Franchised Business or any Craters & Freighters company-owned or Affiliate-owned outlet then-existing as of the date of the expiration, transfer, or termination of this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 FDD, the post-term competition restriction for Craters & Freighters extends not only to the franchisee's own territory but also considers the proximity of other Craters & Freighters locations. Specifically, for two years after the franchise agreement expires, is transferred, or is terminated, the franchisee is restricted from engaging in a competitive business within their former territory.
In addition to the franchisee's territory, the restriction includes a radius of ten miles from the premises of the former franchised business. Importantly, this ten-mile radius also extends to the premises of any other existing Craters & Freighters franchised business, company-owned outlet, or affiliate-owned outlet. This means a franchisee cannot operate a competing business within ten miles of any other Craters & Freighters location, regardless of whether it is within their original territory.
This provision is designed to protect Craters & Freighters' market share and brand integrity by preventing former franchisees from leveraging their experience and knowledge to directly compete with existing locations. The restriction applies to performing services, consulting, engaging in, acquiring, lending money to, having an interest in, or being employed by a competitive business. This broad definition aims to prevent any form of direct or indirect competition within the specified geographic areas. A prospective franchisee should carefully consider the implications of these restrictions, especially if they plan to remain in the same geographic area after leaving the Craters & Freighters system.