What standards must the transferee and their owners meet to be approved as a Craters & Freighters franchisee?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
e Franchised Business in the event of the death of Franchisee or an owner of Franchisee by will, declaration of or transfer in trust, or under the laws of interstate succession.
- 16.3 Conditions for Approval of Transfer. So long as Franchisee and its owner(s) are in full compliance with this Agreement as of the date of the transfer, Franchisor will not reasonably withhold its approval of a transfer that meets all of the following conditions prior to or concurrently with the effective date of the transfer:
- 16.3.1 No Default. Franchisee and Franchisee's owner(s) have performed all obligations and duties under this Agreement.
- 16.3.2 Payments. Franchisee has paid all Royalty Fees, Marketing Fund Contributions, Insurance Payments, Technology Fees, and other amounts owed by Franchisee to Franchisor, any Affiliate of Franchisor, and any third-party creditors relating to the Franchised Business.
- 16.3.3 Governmental Compliance. The transfer is conducted in compliance with applicable laws and regulations.
- 16.3.4 Standards for Franchisees and Franchisee Owners. 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 Franchisor's then-applicable standards for franchisees and franchisee owners.
- 16.3.5 Training. The transferee and/or its management personnel have completed Franchisor's Initial Training Program to Franchisor's satisfaction.
- 16.3.6 Transfer Fee. Franchisee or the transferee has paid Franchisor a transfer fee ("Transfer Fee") in the amount of Fifteen Thousand Dollars and Zero Cents ($15,000.00) to defray expenses Franchisor incurs in connection with the transfer (unless the transfer is to or among then-existing owners of Franchisee).
- 16.3.7 Release. Franchisee and its owner(s) have executed a general release, in a form satisfactory to Franchisor, of
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, a transferee and their owners must meet specific standards to be approved as a franchisee. These standards include demonstrating good moral character, possessing sufficient business experience, aptitude, and financial resources to successfully operate the franchised business. Additionally, the transferee and/or their management personnel must complete Craters & Freighters' Initial Training Program to the franchisor's satisfaction.
These conditions are in place to ensure that any new franchisee taking over an existing Craters & Freighters location has the necessary skills, background, and financial stability to maintain the brand's standards and operational effectiveness. By requiring the completion of the Initial Training Program, Craters & Freighters ensures that the new management is well-versed in the company's specific systems and procedures.
Furthermore, the original franchisee and their owners must be in full compliance with the existing agreement as of the transfer date. This includes having performed all obligations and duties, paid all outstanding fees (Royalty Fees, Marketing Fund Contributions, Insurance Payments, Technology Fees, and other amounts owed), and ensuring the transfer complies with all applicable laws and regulations. A transfer fee of $15,000 must be paid to Craters & Freighters to cover expenses associated with the transfer, unless the transfer is among existing owners. The franchisee and its owners must also execute a general release of claims against Craters & Freighters.
These requirements protect Craters & Freighters' interests by ensuring that transfers do not occur if the current franchisee is in default or if the new franchisee does not meet the brand's standards. The transfer fee helps offset the administrative costs Craters & Freighters incurs during the transfer process. The release of claims is a standard legal protection for the franchisor, preventing future litigation from the outgoing franchisee.