What is the significance of the Craters & Freighters Franchise Company relying on the statements made in the 'Statement of Franchisee'?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
ORTH DAKOTA, RHODE ISLAND, SOUTH DAKOTA, VIRGINIA, WASHINGTON, OR WISCONSIN.
IF THE FRANCHISE IS TO BE OPERATED IN, OR YOU ARE A RESIDENT OF, MARYLAND, DO NOT SIGN THIS STATEMENT.
In order to make sure that no misunderstanding exists between you, the Franchisee, and us, Craters & Freighters Franchise Company (also called "Franchisee" or "we") and to make sure that no violations of law might have occurred, and understanding that we are relying on the statements you make in this document, you assure us as follows:
| Cash Flows from Financing Activities: | |||
|---|---|---|---|
| Distributions to Shareholder | - (4,945,919) | ||
| Due to Shareholder | 2,769,688 | - | |
| Net Cash Flows from Financing Activities | 2,769,688 | (4,945,919) | |
| Net Increase (Decrease) in Cash and Cash Equivalents | 4,615,333 | (2,279,537) |
Source: Item 23 — RECEIPTS (FDD pages 50–193)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, Craters & Freighters Franchise Company requires a 'Statement of Franchisee' to ensure there are no misunderstandings between the franchisee and the company and to confirm that no legal violations have occurred during the franchise sales process. This statement is a formal assurance from the franchisee to Craters & Freighters, acknowledging their understanding of the franchise terms and their reliance on their own due diligence. However, this statement is not applicable if the franchise is subject to state franchise disclosure laws in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin, and should not be signed if the franchise is to be operated in, or the franchisee is a resident of, Maryland.
Craters & Freighters relies on the franchisee's statements to confirm several key points. These include that no unauthorized claims or representations about potential sales, costs, income, or profits were made, except as explicitly disclosed in Item 19 of the FDD. It also confirms that no unwritten promises or agreements were made that contradict the Franchise Disclosure Document or the Franchise Agreement. Furthermore, the statement verifies that the franchisee's decision to invest is not contingent on any unmet conditions or reservations, such as securing financing, unless specified in the Franchise Agreement.
By requiring this statement, Craters & Freighters aims to protect itself from potential legal disputes arising from misunderstandings or misrepresentations made during the franchise sales process. It also reinforces the franchisee's responsibility to conduct thorough due diligence and seek independent advice before investing. The franchisee acknowledges that their success depends on their own business skills, marketing, sales, and management abilities, and that hard work and sound judgment are essential. This measure ensures that franchisees are fully aware of the risks and responsibilities associated with owning a Craters & Freighters franchise and that they have not been swayed by any unrealistic or unsubstantiated claims.