During the term of the Craters & Freighters agreement, is a franchisee allowed to solicit customers from other Craters & Freighters franchises for a Competitive Business?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
or to enter into this Agreement, and that it is essential that Franchisee and Franchisee's owner(s) comply with the terms set forth herein.
- 15.2 In-Term Restrictive Covenants. During the term of this Agreement, Franchisee and Franchisee's owner(s) may not, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership, or corporation:
- 15.2.1 Perform any services for, consult for, engage in, acquire, lend money to, extend credit to, have any interest in, or be employed as an officer, director, executive, or principal of any business that offers shipping, packaging, crating, receiving and delivery, storage, transportation, moving, logistics, blanket wrap, or freight forwarding services, or products or services similar to the Franchised Business ("Competitive Business") without the prior written consent of Franchisor.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, during the term of the agreement, a franchisee is restricted from soliciting customers of other Craters & Freighters franchises for a competitive business. Specifically, the franchisee cannot directly or indirectly divert or attempt to divert business or customers from any Craters & Freighters franchised business to a Competitive Business. This restriction also applies to Craters & Freighters company-owned or affiliate-owned businesses.
This in-term restriction is a standard practice in franchising to protect the brand and the network of franchisees. It prevents franchisees from using the knowledge and resources gained from the Craters & Freighters system to directly compete and poach customers from other franchisees within the system. This restriction is in place to ensure that all franchisees can benefit from the brand's reputation and marketing efforts without internal competition that could undermine their individual businesses.
The agreement specifies that these covenants related to non-competition and non-solicitation are material inducements for Craters & Freighters to enter into the agreement. This highlights the importance Craters & Freighters places on protecting its business model and franchise network. Franchisees and their owners must comply with these terms, reinforcing the seriousness of these restrictions.
In practical terms, a Craters & Freighters franchisee must be very careful not to target or solicit customers who are already doing business with another Craters & Freighters location. Any attempt to do so, even indirectly, could be a breach of the franchise agreement and could lead to penalties or termination of the franchise agreement. This restriction remains in effect throughout the entire term of the agreement.