What post-term restrictive covenants apply to Craters & Freighters franchisees?
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.
15.3.2 Divert, attempt to divert, or solicit business or customers of the Franchised Business, any Craters & Freighters Franchised Business, or any Craters & Freighters company-owned or Affiliate-owned business, to any Competitive Business by direct or indirect inducement or otherwise.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, franchisees and their owners are subject to post-term restrictive covenants for two years after the expiration, transfer, or termination of the Franchise Agreement. These covenants prevent them from engaging in activities that could compete with Craters & Freighters.
Specifically, franchisees and their owners cannot perform services for, consult for, engage in, acquire, lend money to, extend credit to, have any interest in, or be employed by any Competitive Business. This restriction applies to the premises of the former franchised business, within the territory granted to the franchisee, or within a 10-mile radius of the former business location or any other Craters & Freighters outlet.
Additionally, franchisees are prohibited from diverting, attempting to divert, or soliciting business or customers away from the former Craters & Freighters Franchised Business, any other Craters & Freighters Franchised Business, or any Craters & Freighters company-owned or Affiliate-owned business to any Competitive Business. These restrictions are designed to protect Craters & Freighters' market share and brand reputation after a franchise agreement ends.