Under what conditions can a Craters & Freighters franchise be transferred?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
18. DEATH OR DISABILITY OF FRANCHISEE.
Upon death or permanent disability of Franchisee or a principal owner of Franchisee, the executor, administrator, conservator, guardian, or other personal representative of such person must transfer its interest in this Agreement or such interest in Franchisee to a third party approved by Franchisor. Such disposition of this Agreement or such interest (including, without limitation, transfer by bequest or inheritance) (collectively, "Disposition") must be completed within a reasonable time, not to exceed six (6) months from the date of death or permanent disability ("Disposition Deadline"), and will be subject to all of the terms and conditions applicable to transfers contained in Section 16 of this Agreement including, but not limited to Franchisor's right of first refusal; provided, however, in the event the Disposition has not been completed before the Disposition Deadline because the estate of Franchisee (or a principal owner of Franchisee, as the case may be) has not yet been concluded in probate court, then the Disposition Deadline will be extended until such time that such probate court has completed the probate process, not to exceed a total of twelve (12) months from the date of death or permanent disability. For purposes hereof, the term "permanent disability" will mean a mental or physical disability, impairment, or condition that is reasonably expected to prevent or actually does prevent Franchisee or an owner of a controlling interest in Franchisee from supervising the management and operation of the Franchised Business for a period of six (6) months or more from the onset of such disability, impairment, or condition.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, a franchise can be transferred under specific conditions, primarily related to the death or disability of the franchisee or a principal owner. In the event of death or permanent disability, the representative of the person must transfer the interest in the Franchise Agreement to a third party approved by Craters & Freighters. This transfer, referred to as a "Disposition," must occur within a reasonable timeframe, not exceeding six months from the date of death or permanent disability.
However, this timeline may be extended up to twelve months if the estate is still in probate court. The term "permanent disability" is defined as a mental or physical condition that prevents the franchisee or a controlling owner from managing the business for at least six months. All transfer terms and conditions outlined in Section 16 of the agreement apply, including Craters & Freighters' right of first refusal.
This clause ensures that in unforeseen circumstances such as death or disability, there is a clear process for transferring the franchise to a suitable, approved party, maintaining the operational standards and brand integrity of Craters & Freighters. The franchisor's approval is critical, as it allows them to vet potential new franchisees and ensure they meet the necessary qualifications. The right of first refusal gives Craters & Freighters the option to purchase the franchise back, providing additional control over the network.
Prospective franchisees should be aware of these conditions, as they dictate how the franchise can be transferred in specific situations. Understanding these terms is essential for estate planning and ensuring business continuity. Franchisees should consult with legal and financial advisors to fully understand the implications of these transfer conditions.