If the Craters & Freighters Franchise Agreement is transferred, when does the post-term competition restriction begin for the Restricted Person?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of two (2) years after (a) Restricted Person's relationship with Franchisee ends; (b) the expiration or termination of the Franchise Agreement; or (c) the approved transfer of the Franchise Agreement to a new franchisee, whichever occurs first, Restricted Person will not, without Franchisor's consent, directly or indirectly (such as through an affiliate or a family member) 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 the Franchisee 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 the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, the post-term competition restriction for a Restricted Person begins based on whichever of these events occurs first: (a) when the Restricted Person's relationship with the franchisee ends, (b) upon the expiration or termination of the Franchise Agreement, or (c) when the Franchise Agreement is approved for transfer to a new franchisee.
Following the triggering event, the Restricted Person is subject to a two-year restriction. During this period, without Craters & Freighters's consent, the Restricted Person cannot perform services for, consult for, engage in, acquire, lend money to, extend credit to, have any interest in, or be employed by any Competitive Business. This restriction applies directly or indirectly, including through affiliates or family members.
The non-compete restrictions apply within specific geographic areas: (i) at the premises of the franchised business, (ii) within the territory granted to the franchisee, or (iii) within a 10-mile radius of either the franchised business's premises or the premises of any other Craters & Freighters franchised, company-owned, or affiliate-owned outlet existing as of the date of expiration, transfer, or termination.