What are the three geographic areas where a Restricted Person is restricted from competing with Craters & Freighters post-term?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of two (2) years after the expiration, transfer, or termination of this Agreement, Franchisee and its owner(s) may not, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership, or corporation:
- 15.3.1 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 Competitive Business at or within the following areas: (i) at the Premises of the Franchised Business; (ii) within the Territory granted to Franchisee under this Agreement; or (iii) within a radius of ten (10) miles of (a) the Premises of the Franchised Business, or (b) the premises of any other Craters & Freighters Franchised Business or any Craters & Freighters company-owned or Affiliate-owned outlet then-existing as of the date of the expiration, transfer, or termination of this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, a Restricted Person is restricted from competing for two years after their relationship with the franchisee ends, the Franchise Agreement expires or terminates, or the Franchise Agreement is transferred to a new franchisee. This restriction applies unless Craters & Freighters gives consent.
The three specific geographic areas where competition is restricted are (1) at the Premises of the Franchised Business, (2) within the Territory granted to the franchisee under the Franchise Agreement, and (3) within a ten-mile radius of (a) the Premises of the Franchised Business, or (b) the premises of any other Craters & Freighters Franchised Business or any Craters & Freighters company-owned or Affiliate-owned outlet then-existing as of the date of the expiration, transfer, or termination of the Franchise Agreement.
These post-term restrictions are designed to protect Craters & Freighters' interests by preventing former franchisees or related parties from using the knowledge and experience gained during their franchise term to unfairly compete with the brand in the immediate vicinity of existing locations. This type of restriction is common in franchising to maintain brand consistency and protect market share. A prospective franchisee should carefully consider the implications of these restrictions, especially if they plan to remain in the same geographic area after the franchise agreement ends.