What are the obligations for continuous operation at the premises for a Craters & Freighters franchise?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.12 Compliance with Lease.
Franchisee must comply with both the Lease and any additional leasehold covenants and regulations of the building in which the Premises is located.
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.
- 6.13 Compliance with System Standards.
To protect the reputation and goodwill of Franchisor and the System, and to maintain uniform standards of operation under the Marks, Franchisee will conduct the Franchised Business in strict accordance with the specifications, standards, operating procedures, and rules set forth in this Agreement, the Operations Manuals, and otherwise established and communicated by Franchisor (collectively the "System Standards").
Franchisee acknowledges the System Standards are intended to protect Franchisor's standards, systems, names, Marks, Confidential Information, and Trade Secrets (including but not limited to the Proprietary Software) and are not intended to control the day-to-day operation of Franchisee's Franchised Business.
Franchisee further acknowledges and agrees that Franchisee's Franchised Business will be under the control of the Franchisee at all times and that Franchisee will be solely responsible for the day-to-day operation of the business.
Any failure or refusal by Franchisee to comply with the System Standards will be a material default by Franchisee under this Agreement.
- 6.14 Display of Logo.
Throughout the duration of this Agreement, Franchisee will use and display the Marks and will make the Craters & Freighters logo ("Logo") the primary focus of identification on all promotional and direct mail, such as on letterhead, envelopes, and sales material.
Any signage used on buildings, trucks, or billboards in connection with the Franchised Business will
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, franchisees must operate their business in strict accordance with the standards, procedures, and rules set forth in the franchise agreement, operations manuals, and other communications from Craters & Freighters. These standards are in place to protect Craters & Freighters's reputation, brand, and confidential information, but the franchisee maintains control over the day-to-day operations of their business. Failure to comply with these standards constitutes a material default of the agreement. Franchisees must also comply with the terms of their lease agreement for the premises. A default on the lease that leads to termination can be considered a breach of the franchise agreement, provided Craters & Freighters verifies the default. Franchisees are expected to devote their best efforts to attract and serve customers within their designated territory, and are generally restricted from soliciting business outside of this territory, unless approved by Craters & Freighters. Franchisees must pay royalty fees on sales from customers within their territory and any adjacent territory where they are authorized to operate.
Franchisees are required to prominently display Craters & Freighters's logo on all promotional materials and signage. This includes letterheads, envelopes, sales materials, buildings, trucks, and billboards. This ensures consistent brand visibility and recognition. Craters & Freighters may provide promotional support for the opening of the franchised business. Franchisees are also required to use Craters & Freighters's proprietary operating software for processing customer jobs, managing royalty reports, and streamlining operations. Franchisees must also use select software as determined by Craters & Freighters.
Craters & Freighters may grant franchisees the right to promote and service customers in an unsold territory adjacent to their own. However, this right does not give the franchisee any ownership or long-term interest in that adjacent territory. If Craters & Freighters awards the adjacent territory to another franchisee, the original franchisee must cease all promotional activities, return customer data, and stop providing services in that area. Customers have the freedom to choose any Craters & Freighters outlet, regardless of location. Craters & Freighters retains the right to operate or franchise other outlets outside the franchisee's territory and to sell similar services through other distribution channels. The franchise granted is non-exclusive.