Under the Craters & Freighters franchise agreement, what is the 'System' comprised of?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
logistics solutions, a national accounts program, national cargo insurance plan, proprietary software, advertising programs, brand identity system, and a comprehensive website.
WHEREAS, in doing so, Franchisor has developed a concept for crating, packaging, shipping, receiving and delivery, storage, transportation, logistics, and freight forwarding services and products which operates under distinctive business formats, systems, methods, procedures, designs, layouts and specifications (collectively, the "System"), which Franchisor may improve, further develop, or otherwise modify from time to time. Franchisor grants to franchisees the right to operate a Franchised Business and requires them to use certain trade names, trademarks, and service marks ("Marks").
1. GRANT OF FRANCHISE.
- 1.1 Grant. Subject to the terms and conditions of this Agreement, Franchisor grants to Franchisee a non-exclusive license to operate a Franchised Business at the Premises (as such term is defined below) using the System and the Marks for the Initial Term of this Agreement. Franchisee may not operate the Franchised Business at any site other than the Premises without Franchisor's prior written consent. Franchisee must use the Marks and System only in accordance with the terms and conditions of this Agreement.
- 1.2 Territory. During the Initial Term and any Successor Term (as such terms are defined below), neither Franchisor nor its Affiliates will own, operate or franchise a fixed location for the operation of any other Franchised Business within Franchisee's territory ("Territory") as set forth in Attachment A to this Agreement. For purposes of this Agreement, "Affiliate" means any person or entity that 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, the 'System' encompasses the distinctive business formats, systems, methods, procedures, designs, layouts, and specifications that Craters & Freighters has developed for crating, packaging, shipping, receiving and delivery, storage, transportation, logistics, and freight forwarding services and products. Craters & Freighters retains the right to improve, further develop, or otherwise modify this System over time. Franchisees are granted the right to operate a Franchised Business using this System, as well as certain trade names, trademarks, and service marks.
To protect the reputation and goodwill of Craters & Freighters and the System, franchisees must conduct their Franchised Business in strict accordance with the specifications, standards, operating procedures, and rules set forth in the Franchise Agreement, the Operations Manuals, and as otherwise established and communicated by Craters & Freighters. These System Standards are designed to protect Craters & Freighters' standards, systems, names, Marks, Confidential Information, and Trade Secrets, including the Proprietary Software, but are not intended to control the day-to-day operation of the Franchisee's Franchised Business.
Craters & Freighters also provides franchisees with access to its proprietary and confidential operations manuals, which include various written materials, directives, and software programs. These materials contain information, methods, standards, operating procedures, requirements, instructions, and policies relating to the operation of a Craters & Freighters franchised business. Additionally, Craters & Freighters develops, maintains, and grants franchisees the right to use its proprietary operating software, which serves as the central platform for processing customer jobs and managing royalty reports.