Under what conditions will Craters & Freighters not reasonably withhold approval of a franchise transfer?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
e Franchised Business in the event of the death of Franchisee or an owner of Franchisee by will, declaration of or transfer in trust, or under the laws of interstate succession.
- 16.3 Conditions for Approval of Transfer. So long as Franchisee and its owner(s) are in full compliance with this Agreement as of the date of the transfer, Franchisor will not reasonably withhold its approval of a transfer that meets all of the following conditions prior to or concurrently with the effective date of the transfer:
- 16.3.1 No Default. Franchisee and Franchisee's owner(s) have performed all obligations and duties under this Agreement.
- 16.3.2 Payments. Franchisee has paid all Royalty Fees, Marketing Fund Contributions, Insurance Payments, Technology Fees, and other amounts owed by Franchisee to Franchisor, any Affiliate of Franchisor, and any third-party creditors relating to the Franchised Business.
- 16.3.3 Governmental Compliance. The transfer is conducted in compliance with applicable laws and regulations.
- 16.3.4 Standards for Franchisees and Franchisee Owners. The transferee and its owner(s) are individual(s) of good moral character, have sufficient business experience, aptitude, and financial resources to operate the Franchised Business, and have otherwise met Franchisor's then-applicable standards for franchisees and franchisee owners.
- 16.3.5 Training. The transferee and/or its management personnel have completed Franchisor's Initial Training Program to Franchisor's satisfaction.
- 16.3.6 Transfer Fee. Franchisee or the transferee has paid Franchisor a transfer fee ("Transfer Fee") in the amount of Fifteen Thousand Dollars and Zero Cents ($15,000.00) to defray expenses Franchisor incurs in connection with the transfer (unless the transfer is to or among then-existing owners of Franchisee).
- 16.3.7 Release. Franchisee and its owner(s) have executed a general release, in a form satisfactory to Franchisor, of
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, Craters & Freighters will not unreasonably withhold approval of a franchise transfer if the franchisee and its owners are in full compliance with the existing agreement as of the transfer date, and the transfer meets specific conditions. These conditions ensure that the transfer is conducted properly and that the new franchisee meets Craters & Freighters' standards.
The conditions include that the franchisee and its owners have performed all obligations and duties under the agreement, and all payments such as Royalty Fees, Marketing Fund Contributions, Insurance Payments, and Technology Fees have been made. The transfer must also comply with all applicable laws and regulations. The transferee and their owners must demonstrate good moral character, sufficient business experience, aptitude, and financial resources to operate the franchise, meeting Craters & Freighters' standards for franchisees.
Furthermore, the transferee or their management personnel must complete Craters & Freighters' Initial Training Program to the franchisor's satisfaction. A transfer fee of $15,000 must be paid to Craters & Freighters to cover expenses related to the transfer, unless the transfer is among existing owners. Finally, the franchisee and its owners must execute a general release of any claims against Craters & Freighters and its affiliates in a form satisfactory to Craters & Freighters. Meeting all these conditions ensures a smooth and acceptable transfer process for both the franchisor and the franchisee.