What standards must the transferee and their owners meet 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. |
| n. |
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, a franchisee wishing to transfer their franchise must meet several conditions to gain approval from Craters & Freighters. Both the current franchisee and the prospective transferee must fulfill specific obligations. The franchisee must have performed all duties under the Franchise Agreement and paid all outstanding amounts to Craters & Freighters, its affiliates, and any relevant third-party creditors. The transfer itself must comply with all applicable laws and regulations.
The transferee and their owners must meet Craters & Freighters' standards for franchisees, including demonstrating good moral character, sufficient business experience, aptitude, and financial resources to successfully operate the business. The transferee and/or their management must also complete Craters & Freighters' initial training program to the company's satisfaction. A transfer fee must be paid to Craters & Freighters. The franchisee must execute a general release of claims against Craters & Freighters and its affiliates.
Furthermore, Craters & Freighters must approve the material terms of the transfer, and any financing obtained by the transferee must be subordinate to their obligation to pay royalty fees and other amounts due under the Franchise Agreement. If the franchise operates at a leased location, the landlord must consent to the assignment or sublease. Craters & Freighters must not have exercised its right of first refusal to acquire the franchise. Finally, the transferee and their owners must execute Craters & Freighters' then-current form of franchise agreement, indicating their commitment to the current terms and conditions of the franchise system.