What is the standard of character required for the transferee and their owners to be approved for a Craters & Freighters franchise transfer?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Item | Provision | Section in Franchise Agreement | Summary |
|---|---|---|---|
| m. | Conditions for franchisor's approval of transfer | Section 16.3 | You and your owner(s) have performed all obligations and duties under the Franchise Agreement; you have paid all amounts due and owing to us, any Affiliate of ours, and any third-party creditors relating to the Franchised Business; the transfer is conducted in compliance with applicable laws and regulations; the transferee and its owner(s) are individual(s) of good moral character, have sufficient business experience, aptitude, and financial resources to operate the Franchised Business, and have otherwise met our then applicable standards for franchisees and franchisee owners; the transferee and/or its management personnel have completed our initial training program to our satisfaction; payment of the Transfer Fee; you have executed a general release, in a form satisfactory to us, of any and all claims against us, our subsidiaries, and Affiliates, and their respective shareholders, directors, officers, employees, agents, successors, and assignees; we have approved the material terms and conditions of such transfer; any financing is subordinate to the transferee's obligations to pay Royalty Fees and other amounts due under the Franchise Agreement; if required, the landlord of the Premises has consented to the assignment or sublease; we have not exercised our its right of first refusal; and the transferee and its owner(s) have executed our then current form of franchise agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTIONS (FDD pages 36–44)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, for a franchise transfer to be approved, the transferee and their owners must be individuals of good moral character. Additionally, they must possess sufficient business experience, aptitude, and financial resources to successfully operate the Craters & Freighters Franchised Business. They also need to meet the then-current standards that Craters & Freighters has in place for franchisees and their owners.
This means that if you're looking to sell your Craters & Freighters franchise, the person or entity you're selling to will need to undergo a review process by Craters & Freighters to ensure they meet these character and capability requirements. This is a standard practice in franchising, intended to protect the brand and ensure that new franchisees are set up for success.
Furthermore, the transferee and/or its management personnel must complete Craters & Freighters' initial training program to the franchisor's satisfaction. This ensures that the new owner is properly trained in the Craters & Freighters system. The franchisor must also approve the material terms and conditions of the transfer. This provision allows Craters & Freighters to maintain control over who becomes a franchisee and to ensure that the transfer aligns with their standards and goals.