Under what conditions can a Craters & Freighters franchisee solicit business outside their territory?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
at controls, is controlled by, or is in common control with, Franchisor or Franchisee.
- 1.3 Operation of Franchised Business Limited to Territory. Franchisee agrees to devote its best efforts to identifying, attracting, and serving customers who reside or operate within the Territory. Therefore, except as otherwise permitted herein or as approved in advance and in writing by Franchisor, Franchisee will solicit business only in the Territory for the purpose of obtaining customers who reside or operate within the Territory, and Franchisee will not knowingly solicit business outside of the Territory. However, Franchisee is not required to verify that customers to the Franchised Business reside or conduct business within the Territory. Franchisee acknowledges and agrees that Franchisor, an Affiliate of Franchisor, or designee of Franchisor, as part of Franchisor's business strategy, may advertise or market on behalf of the System in the Territory.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, franchisees primarily focus on attracting and serving customers within their designated territory. Generally, a Craters & Freighters franchisee is expected to solicit business only within their territory to obtain customers who reside or operate there. However, there are exceptions where soliciting business outside the territory is permitted.
Specifically, a franchisee can solicit business outside their territory if they have prior written approval from Craters & Freighters. Additionally, Craters & Freighters may grant a franchisee the right to promote and advertise in an unsold territory adjacent to their own, referred to as an "Adjacent Territory." In this case, the franchisee is obligated to pay royalty fees to Craters & Freighters on all adjusted gross sales from customers in both their primary territory and the adjacent one. However, this right does not give the franchisee any ownership or future rights to that adjacent territory.
It's important to note that even with these exceptions, customers retain the freedom to choose any Craters & Freighters outlet, regardless of location. Furthermore, Craters & Freighters or its affiliates may market on behalf of the system within a franchisee's territory. Franchisees must also adhere to Craters & Freighters' policies on marketing outside their territory and cooperate with neighboring franchisees, as outlined in the operations manuals.