Is Craters & Freighters required to reimburse franchisees for loss of goodwill 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 any loss of goodwill if they modify or discontinue the use of a Mark. Craters & Freighters may determine it is advisable to modify or discontinue use of any Mark and/or use one or more additional or substitute trade or service marks. If this occurs, the franchisee must comply with Craters & Freighters' directions within a reasonable time after notice.
Craters & Freighters will not reimburse franchisees for any out-of-pocket expenses incurred when modifying or discontinuing the use of a Mark and substituting it with a different trademark or service mark, especially concerning major signage identifying the premises.
Furthermore, Craters & Freighters explicitly states they will not reimburse franchisees for any loss of goodwill associated with the modified or discontinued Mark. They also will not cover any expenditures made by the franchisee to promote a modified or substitute trademark or service mark. This means franchisees must bear the full financial burden of rebranding efforts if Craters & Freighters decides to change its Marks.