Does the post-term competition restriction for Craters & Freighters apply to company-owned outlets?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of two (2) years after the expiration, transfer, or termination of this Agreement, Franchisee and its owner(s) may not, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership, or corporation:
- 15.3.1 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 this 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 this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the post-term competition restriction does apply to company-owned outlets. Specifically, after the franchise agreement expires, is transferred, or is terminated, the franchisee is restricted from being involved with a competitive business within a certain radius of existing Craters & Freighters outlets. This radius includes not only franchised businesses but also company-owned or affiliate-owned outlets.
This restriction means that a former franchisee cannot work for, consult with, or own a competitive business within a ten-mile radius of their former Craters & Freighters location, any other Craters & Freighters franchise, or any Craters & Freighters company-owned outlet. This measure protects Craters & Freighters' market presence and customer base by preventing former franchisees from leveraging their knowledge and experience to directly compete with existing locations, whether franchised or company-operated.
The inclusion of company-owned outlets in the post-term competition restriction ensures that Craters & Freighters maintains a consistent competitive landscape for all its locations. This provision prevents a former franchisee from setting up a competing business near a company-owned store, which could potentially undermine its performance. The restriction lasts for two years, providing a reasonable timeframe for Craters & Freighters to protect its business interests while allowing the former franchisee to pursue other opportunities eventually.