Is non-payment of amounts due to Craters & Freighters a curable default?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Item | Provision | Section in Franchise Agreement | Summary |
|---|---|---|---|
| g. | "Cause" defined – curable defaults | Section 19.2 | Curable Defaults: You have 30 days to cure |
| any of the following defaults: non-payment of | |||
| any amount due and owing to us or any | |||
| Affiliate of ours as required by us pursuant to | |||
| the Franchise Agreement, Operations Manuals, | |||
| or otherwise; failure or refusal to submit, when | |||
| due, any report or other data, information, or | |||
| supporting records relating to the Franchised | |||
| Business; failure or refusal to accurately report | |||
| the Adjusted Gross Sales of the Franchised | |||
| Business; failure or refusal to operate a | |||
| warehouse within the Premises necessary for | |||
| the operation of the Franchised Business; | |||
| uncured default under the Lease for the | |||
| Premises; offer or sale of any products or | |||
| services not authorized by us; failure or refusal | |||
| to comply with the Operations Manuals or, | |||
| more specifically, any of the System Standards; | |||
| failure or refusal to pay any taxes due in | |||
| connection with your operation of the | |||
| Franchised Business; failure or refusal to | |||
| obtain and/or maintain all applicable licenses | |||
| and permits relating to the operation of the | |||
| Franchised Business; failure or refusal to | |||
| obtain our written approval or consent when | |||
| required; or failure or refusal to comply with | |||
| any other provision of the Franchise | |||
| Agreement, Operations Manuals, or any | |||
| System Standard. |
h. "Cause" defined – non-curable Section 19.1 Non-Curable Defaults: failure or refusal to defaults open the Franchised Business within 90 days after execution of the Franchise Agreement; the making of any material misrepresentation or omission in applying to be a Craters & Freighters franchisee; you or any other required attendee(s) fail to attend and complete, to our satisfaction, the initial training program; abandonment of the Franchised Business; criminal conduct by you, any principal owner of the franchisee entity, or any owner of franchisee entity owning more than owner of the franchisee entity, or any owner of franchisee entity owning more than 10% of the franchisee entity engages in any act or conduct which, in our sole determination, materially impairs the goodwill and/or reputation of the System or Marks, and you fail or refuse to take corrective measures to promptly minimize or eliminate the negative impact of such act or conduct; repeated non-payment of any amount due and owing to us or any Affiliate of ours as required by us pursuant to the Franchise Agreement, Operations Manuals, or otherwise; a course of conduct which includes any misrepresentations or deceptive or unlawful acts or practices in connection with offering and/or selling products and services to customers; failure, refusal, or neglecting to take appropriate and necessary measures to protect any employee or customer from imminent and significant danger due to any health or safety matter in connection with the operation of the Franchised Business (or committing repeated violations of any health or safety-related law, standard, or practice); unauthorized use or disclosure of the Marks, Confidential Information, Trade Secrets, Operations Manuals, or Proprietary Software; intentional understatement of the Franchised Business's Adjusted Gross Sales in any report or financial statement; failure or refusal to comply with any of the in-term restrictive covenants set forth in the Franchise Agreement; uncured default under any other agreement with us or any of our Affiliates 10% of the franchisee entity; you, any principal (including, but not limited to, another franchise agreement or a promissory note);
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTIONS (FDD pages 36–44)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, non-payment of amounts due to Craters & Freighters or its affiliates is initially considered a curable default. This means a franchisee has an opportunity to rectify the situation and avoid termination of the franchise agreement.
The FDD specifies that a franchisee has 30 days to cure the default of non-payment. This 30-day period starts from the date the franchisee is notified of the default. If the franchisee pays all outstanding amounts within this timeframe, the default is considered resolved, and the franchise agreement remains in good standing.
However, the FDD also indicates that repeated non-payment can become a non-curable default. If a Craters & Freighters franchisee repeatedly fails to pay amounts due, Craters & Freighters may consider this a more serious breach of the franchise agreement, potentially leading to immediate termination without the opportunity to cure. This distinction highlights the importance of franchisees maintaining timely payments to avoid jeopardizing their franchise agreement.