Does the Craters & Freighters post-term competition restriction apply to activities conducted through a family member?
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 does apply to activities conducted through a family member. Specifically, for a period of two years after the franchise agreement ends, the franchisee is restricted from engaging in competitive business activities directly or indirectly, which includes activities performed through a family member.
This means that a former Craters & Freighters franchisee cannot bypass the non-compete agreement by having a family member perform services for, consult for, engage in, acquire, lend money to, extend credit to, have any interest in, or be employed by a competitive business. This restriction applies within the premises of the franchised business, the territory granted to the franchisee, or within a 10-mile radius of the franchised business or any other Craters & Freighters outlet.
This provision is designed to protect Craters & Freighters's business interests and prevent former franchisees from using their knowledge and experience gained during the franchise term to unfairly compete with the brand. Prospective franchisees should carefully consider the scope and duration of this restriction, as it could significantly limit their business opportunities after leaving the Craters & Freighters system. Franchisees should seek legal counsel to fully understand the implications of this clause before signing the franchise agreement.