How long is the Successor Term for a Craters & Freighters franchise if the franchisee renews?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
rants to franchisees the right to operate a Franchised Business and requires them to use certain trade names, trademarks, and service marks ("Marks").
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.
- 1.3 Operation of Franchised Business Limited to Territory. Franchisee agrees to devote its best efforts to identifying, attracting, and serving customers who reside or operate within the Territory. Therefore, except as otherwise permitted herein or as approved in advance and in writing by Franchisor, Franchisee will solicit business only in the Territory for the purpose of obtaining customers who reside or operate within the Territory, and Franchisee will not knowingly solicit business outside of the Territory.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, the franchisor grants the franchisee a non-exclusive license to operate a franchised business using the system and marks for the initial term of the agreement. The agreement also states that the terms and conditions apply to any successor term. However, the document does not specify the length of the successor term.
To renew the franchise agreement, the franchisee must provide written notice to Craters & Freighters between six and nine months before the initial term expires. The franchisor then has one month to approve or disapprove the renewal request. The franchisee must also meet certain conditions, including meeting the franchisor's standards for franchisees, meeting financial performance targets, executing a general release of claims against the franchisor, and paying a successor fee of $5,000.
Because the length of the successor term is not specified in the FDD, prospective franchisees should seek clarification from Craters & Freighters regarding the duration of the renewal term. Understanding the length of the successor term is essential for long-term business planning and investment decisions.