What happens to the obligations and restrictions imposed on a Craters & Freighters franchisee upon expiration of the agreement if the Interim Period is in effect?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee does not sign a Successor Franchise Agreement prior to the date on which the Initial Term of this Agreement expires and Franchisee continues to accept the benefits of this Agreement after the expiration of this Agreement, then at Franchisor's option, this Agreement may be treated either as (i) expired as of the date of expiration with Franchisee then operating without a license to do so and in violation of Franchisor's rights; or (ii) continued on a month-to-month basis ("Interim Period") until one party provides the other with written notice of such party's intent to terminate the Interim Period, in which case the Interim Period will terminate thirty (30) days after receipt of the notice to terminate the Interim Period.
In the latter case, all of Franchisee's obligations will remain in full force and effect during the Interim Period as if this Agreement had not expired, and all obligations and restrictions imposed on Franchisee upon expiration of this Agreement will be deemed to take effect upon termination of the Interim Period.
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 continues to operate after the initial term without signing a Successor Franchise Agreement, Craters & Freighters has the option to treat the agreement as either expired, or continued on a month-to-month basis, known as the "Interim Period".
During this Interim Period, all of the franchisee's obligations remain in full force, as if the agreement had not expired. This means the franchisee must continue to meet all requirements outlined in the original franchise agreement, such as paying royalties and adhering to operational standards.
Upon termination of the Interim Period (which occurs 30 days after written notice from either party), all obligations and restrictions that would normally take effect upon expiration of the agreement will then be implemented. This includes post-term non-compete clauses and other restrictions that limit the franchisee's activities after leaving the Craters & Freighters system. Therefore, the obligations are not waived but rather deferred until the Interim Period concludes.