What rights does Craters & Freighters reserve 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). 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;
- 1.5.3 Use and license the use of other proprietary and non-proprietary marks or methods which are not the same as or are confusingly similar to the Marks, whether in alternative channels of distribution or in the operation of a business offering shipping, packaging, crating, receiving and delivery, storage, transportation, moving, logistics, blanket wrap, and freight forwarding services and products, at any location, including within the Territory, which may be similar to or different from Franchisee's Franchised Business;
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 specific rights despite granting a franchise. The franchise granted is non-exclusive, meaning Craters & Freighters can operate or franchise other outlets outside the franchisee's territory, regardless of proximity, as long as they do not establish another franchisee or company-owned outlet within the franchisee's territory that uses the Craters & Freighters marks. This ensures that while franchisees have a protected area, Craters & Freighters can still expand its brand presence elsewhere.
Craters & Freighters also reserves the right to use its marks and system to sell similar products or services through alternate distribution channels, both within and outside the franchisee's territory, including sales to National Accounts. This allows Craters & Freighters to pursue large-scale business opportunities independently of its franchisees. Additionally, Craters & Freighters may advertise or market on behalf of the entire system within a franchisee's territory, which could potentially benefit the franchisee but is controlled by Craters & Freighters.
Furthermore, Craters & Freighters reserves the right to establish and operate call centers, potentially managed by Craters & Freighters, its affiliates, or third parties, to handle customer inquiries. While Craters & Freighters states it will use its best efforts to direct calls from prospective customers within a franchisee's territory to that franchisee, it is not obligated to do so. Craters & Freighters also reserves the right to use marketing funds for these call centers. These stipulations highlight that while franchisees gain the right to operate within a territory, Craters & Freighters maintains significant control over broader market strategies and customer acquisition methods.