Is Craters & Freighters required to reimburse franchisees for expenses incurred when modifying or discontinuing a Mark?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.7 Modification or Discontinued Use of Marks.
If Franchisor determines it is advisable for Franchisor and/or Franchisee to modify or discontinue use of any Mark and/or use one or more additional or substitute trade or service marks, Franchisee agrees to comply with Franchisor's directions to do so within a reasonable time after notice thereof.
Franchisor will not reimburse Franchisee for any out-of-pocket expenses Franchisee incurs in modifying or discontinuing the use of a Mark and substituting therefore a different trademark or service mark in connection with the major signage identifying the premises.
Additionally, Franchisor will not reimburse Franchisee for any loss of goodwill associated with the modified or discontinued Mark or for any expenditures made by Franchisee to promote a modified or substitute trademark or service mark.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, Craters & Freighters is not required to reimburse franchisees for out-of-pocket expenses when modifying or discontinuing the use of a mark. This includes the substitution of a different trademark or service mark on major signage identifying the premises.
Furthermore, Craters & Freighters will not compensate franchisees for any loss of goodwill associated with the modified or discontinued mark. Franchisees are also not entitled to reimbursement for any expenditures made to promote a modified or substitute trademark or service mark.
This policy means that if Craters & Freighters decides to change its branding or trademarks, franchisees will bear the full financial burden of updating their signage and promotional materials. This could potentially involve significant costs for franchisees, especially if extensive changes are required or if the changes occur frequently. Franchisees also assume the risk of losing any established goodwill associated with the previous branding, which could impact their business until the new branding is established.