What happens if a Craters & Freighters franchisee defaults on their lease?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, if a franchisee defaults on their lease, resulting in the landlord terminating the lease agreement, it constitutes a material breach of the Franchise Agreement. However, Craters & Freighters must first verify the franchisee's alleged default of the lease before considering it a breach.
This provision underscores the importance of maintaining a good relationship with the landlord and adhering to the terms of the lease agreement. A lease termination due to default can have significant consequences beyond just losing the business location; it can also lead to the termination of the franchise agreement itself.
Prospective Craters & Freighters franchisees should carefully review the terms of their lease agreements and ensure they can meet all obligations to avoid default. It is also advisable to understand the verification process Craters & Freighters undertakes to confirm a default, as this could impact the franchisee's rights and responsibilities.