Under what circumstances does Craters & Freighters reserve the right to establish maximum resale prices?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
We also have a national accounts program ("National Accounts Program") developed in connection with our Affiliate, CFGL. CFGL solicits and administers business accounts (each a "National Account") for packaging and shipping from businesses or institutions with operations in two or more territories within the System. The fulfillment of any National Account will first be offered to the franchisee operating the Craters & Freighters outlet in the territory in which the business is to be serviced according to the corresponding National Account agreement established by us or our designee. That franchisee is required to service the National Account according to the terms and conditions (including the price(s)) established in the corresponding National Account agreement. If that franchisee fails or refuses to service the National Account in accordance with those terms and conditions, or if we determine—in our sole discretion—that franchisee will not meet certain requirements to perform the work requested under the relevant corresponding National Account agreement, we reserve the right to perform the requested service(s) for the National Account or to assign the work to other franchisees, outside third-party vendors, or an Affiliate of ours, in our sole determination. We reserve the right to establish mandatory policies and procedures relating to the National Accounts Program in the Operations Manuals.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 36)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, Craters & Freighters maintains the right to set prices within its National Accounts Program. This program, developed with Craters & Freighters' affiliate, CFGL, focuses on securing and managing business accounts that require packaging and shipping services across multiple territories within the Craters & Freighters system.
If a Craters & Freighters franchisee is offered the opportunity to service a National Account within their territory, they are obligated to adhere to the terms and conditions outlined in the National Account agreement, including the pricing. Should the franchisee fail to meet the service requirements or if Craters & Freighters determines, at its discretion, that the franchisee cannot fulfill the agreement's requirements, Craters & Freighters reserves the right to either perform the services themselves, assign the work to other franchisees, use third-party vendors, or utilize one of their affiliates.
This condition is significant for prospective franchisees as it means they may not have full control over pricing for National Accounts within their territory. While franchisees are given the first opportunity to service these accounts, they must adhere to the pricing and service terms dictated by Craters & Freighters. This could impact a franchisee's revenue and profitability, especially if the set prices are lower than what they would typically charge. Craters & Freighters also retains the right to modify the policies and procedures of the National Accounts Program, potentially affecting franchisees' obligations and benefits.