What rights does the Craters & Freighters franchisor retain despite granting a franchise?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
itory are entitled the freedom to choose any Craters & Freighters outlet which they believe will best serve them and their needs, and that they may seek service from Franchisee.
- 1.5 Non-Exclusivity; Franchisor's Reservation of Rights. Franchisee acknowledges that the franchise granted hereunder is non-exclusive and that Franchisor and its Affiliates retain the exclusive right, among others to:
- 1.5.1 Own, franchise, or operate Craters & Freighters outlets at any location outside of the Territory, regardless of the proximity to the boundaries of the Territory; provided, however, Franchisor will not establish within the Territory another franchisee or company-owned outlet which may also use the Marks;
- 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).
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, the franchise granted is non-exclusive, meaning Craters & Freighters retains specific rights. These include the right to own, franchise, or operate Craters & Freighters outlets at any location outside of the franchisee's territory, regardless of proximity. However, Craters & Freighters will not establish another franchisee or company-owned outlet within the franchisee's territory that also uses the Craters & Freighters marks.
Craters & Freighters also retains the right to use its marks and system to sell similar products or services through any alternate distribution channels, whether inside or outside the franchisee's territory. This includes sales to National Accounts. Furthermore, Craters & Freighters retains the sole right to use the marks and market on the Internet, encompassing all website use, domain names, URLs, linking, advertising, and co-branding arrangements.
These stipulations mean that while a Craters & Freighters franchisee is granted a territory, the franchisor can still operate and market outside that territory through other channels. This could potentially lead to competition from the franchisor itself or other franchisees in adjacent territories, especially through online sales and national accounts. A prospective franchisee should carefully consider the implications of these retained rights and how they might affect their business within their designated territory.