Does Craters & Freighters reserve alternative channels of distribution such as the Internet?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
We reserve the right, among others:
- (1) to own, franchise, or operate Craters & Freighters Franchised Businesses at any location outside of your Territory, regardless of the proximity to the boundaries of your Territory. We will not establish within your Territory another franchisee or company-owned outlet which may also use our trademarks;
- (2) to use our trademarks and system to sell any products or services similar to those which you will sell, through any alternate channels of distribution within or outside of your Territory, including to national accounts. This includes, but is not limited to, other channels of distribution such as television, mail order, catalog sales, wholesale to unrelated retail outlets, or over the Internet. We exclusively reserve alternative channels of distribution such as the Internet, catalog sales, telemarketing or other direct marketing, as channels of distribution for us. We are not required to compensate you if we solicit or accept orders from your Territory. You may not independently use alternative channels of distribution to make sales within or outside your Territory without our prior written approval;
Source: Item 12 — TERRITORY (FDD pages 29–32)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, Craters & Freighters retains the right to use alternative channels of distribution, including the Internet, for selling products and services similar to those offered by franchisees. This reservation extends both within and outside a franchisee's designated territory. These alternative channels encompass television, mail order, catalog sales, wholesale to unrelated retail outlets, and the Internet. Craters & Freighters explicitly reserves these channels for its own use. Franchisees are not allowed to independently use these alternative channels to make sales within or outside their territories without prior written approval from Craters & Freighters.
This policy means that while franchisees operate within their exclusive territory, Craters & Freighters can still market and sell its services through online platforms, catalogs, or other direct marketing methods, potentially reaching customers within the franchisee's territory. Craters & Freighters is not obligated to compensate franchisees for orders solicited or accepted from their territory through these alternative channels. This could impact a franchisee's potential revenue, as customers within their territory might choose to purchase directly from Craters & Freighters through these channels instead of the franchisee.
If a franchisee receives information on prospective business outside of their territory, they are required to pass that information to the franchisee who owns that territory. In areas where there are no Craters & Freighters franchises, a franchisee may provide services to the prospective client. This ensures that territories are respected and that potential business is directed to the appropriate franchisee, if one exists. However, franchisees need to be aware that Craters & Freighters reserves significant control over alternative sales channels and is not required to share revenue generated through those channels with franchisees, even if the sales originate within a franchisee's territory.