Does Craters & Freighters reserve the right to use alternative channels of distribution outside of the franchisee's territory?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.5.2 Use the Marks and System to sell any products or services similar to those which Franchisee will sell, through any alternate channels of distribution within or outside of the Territory, including to National Accounts (as defined below).
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.
Franchisor exclusively reserves alternative channels of distribution such as the Internet, catalog sales, telemarketing or other direct marketing, as channels of distribution for Franchisor.
Franchisee may not independently use alternative channels of distribution to make sales within or outside the Territory without Franchisor's prior written approval;
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, Craters & Freighters retains the right to use alternative channels of distribution both within and outside of a franchisee's territory. These alternative channels include television, mail order, catalog sales, wholesale to unrelated retail outlets, and the Internet. Craters & Freighters exclusively reserves channels such as the Internet, catalog sales, telemarketing, or other direct marketing methods for its own use.
This reservation of rights means that while a Craters & Freighters franchisee focuses on their local market, Craters & Freighters can independently pursue sales through various other channels without the franchisee's direct involvement or benefit. A franchisee is not allowed to independently use alternative channels of distribution to make sales within or outside their territory without prior written approval from Craters & Freighters.
This policy is fairly common in franchising, as it allows the franchisor to pursue national or large-scale sales opportunities that individual franchisees may not be equipped to handle. However, it's important for a prospective franchisee to understand that Craters & Freighters can compete with them through these alternative channels, even within their own territory. Franchisees should inquire about how Craters & Freighters manages potential conflicts between these channels and their franchise operations.