factual

Does the Amorino Area Development Agreement address non-competition during the term of the agreement?

Amorino Franchise · 2025 FDD

Answer from 2025 FDD Document

each of the time periods set forth in Schedule A (hereafter the "Minimum Development Obligation"). Time is of the essence.

2.2 Area Developer May Exceed Minimum Development Obligation

During the Term, Area Developer may, subject to the terms and conditions of this Agreement and the Franchise Agreements, construct, equip, open and operate more Stores in the Area Development Territory than required in the Minimum Development Obligation.

III. AREA DEVELOPMENT TERRITORY PROTECTION

3.1 Protection of Area Development Area

During the term of this Agreement, Company shall not operate or grant a franchise to any other person to operate a Franchised Business within the Area Development Territory.

3.2 Reservation of Rights.

Company, on behalf of itself and its affiliates, reserves the following sole and absolute right to:

  • a) provide, franchise, license, sell, distribute and market any services or products (under any brand, including but not limited to our Proprietary Marks) through any channel or method of distribution, other than an Amorino Store located in your Area Development Territory, including, without limitation, through retail establishments or via the internet, whether inside or outside of your Area Development Territory;
  • b) to establish and operate, and grant to others the right to establish and operate, Amorino Stores at locations anywhere outside the Area Development Territory, including locations near, on or adjacent to the Area Development Territory's boundaries;

  • c) offer and sell to persons outside the Area Development Territory, using the Proprietary Marks, services and products that are the same as the services and products offered by Amorino Stores;
  • d) in or outside the Area Development Territory, to offer and sell different services and products not offered within an Amorino Store, using the Proprietary Marks, without offering you the right to participate, however, we agree that services and products that are consistent with the types of products and services sold by the Stores and with the manner in which the Stores are operated, will be limited to sale through the Stores except for items designed for wholesale sale to different types of outlets such as prepackaged items to be sold in supermarkets and other product categories to be sold through unaffiliated retail outlets;
  • e) acquire and continue to operate, directly or indirectly, any business operating under different trademarks in or outside the Area Development Territory;
  • f) acquire and retain, directly or indirectly, the rights and obligations of any franchisor or licensor of any business similar to an Amorino Store operating under different trademarks in or outside the Area Development Territory;
  • g) in or outside the Area Development Territory, to establish and promote other franchise systems involving different services or products using different trademarks, and to establish company-owned or franchised outlets for those systems, without offering you the right to participate;
  • h) offer and sell Amorino franchises to persons who are located outside the Area Development Territory;
  • i) offer and sell franchising rights to Area Developers who are located outside the Territory;
  • j) be acquired, directly or indirectly, in whole or in part, by any person(s) who provide products or services similar or dissimilar to those provided by Amorino Stores;
  • k) if we, through a merger or any other form of acquisition acquire the ownership rights to or the rights, as franchisor or licensor, to collect franchise fees or licensing fees from any business(es) that are located within your Area Development Territory, and so long as such business(es) would not become converted to operate under the Proprietary Marks; then such acquired business(es) shall not be deemed to violate the Territory rights granted to you and you shall not be entitled to receive any revenue, royalty or other rights associated with such acquired business(es); and
  • l) provide, offer, sell and grant others the right to provide, offer and sell services and goods similar to and/or competitive with those provided at Amorino Stores, whether identified by the Proprietary Marks or other trademarks or service marks, at festivals, cultural or trade exhibitions, or other public events, both inside and outside the Territory. If you desire to participate in any such event or events in your Development Territory, you must notify us of the type and location of the event, the nature of your proposed participation and any other information we reasonably request. We will have a reasonable time to consider and grant or deny your request or to elect to undertake the participation ourselves.

IV. TERM OF AREA DEVELOPMENT AGREEMENT

4.1 Term

The term of this Agreement (the "Term") shall commence on the Effective Date and, unless sooner terminated in accordance with the provisions herein, or extended, shall continue for a period of five years.

4.2 Renewal

Area Developer shall have no right to renew this Agreement.

4.3 Limited Additional Development Right

Within 60 days prior to the expiration of the Term, if Company shall determine that further development of the Area Development Territory is desirable, Company shall notify Area Developer in writing of Company's determination to develop additional Stores in the Area Development Territory and its proposed schedule for such development over a five-year term. Subject to the conditions set forth in section 4.5 of this Agreement, Area Developer shall have a prior right to undertake the additional development which Company shall have set forth in its notice to Area Developer. This right of additional development by Area Developer shall be exercised only in accordance with Section 4.4 and is subject to the conditions set forth in Section 4.5. If such right of additional development is not exercised by Area Developer, Company or any Franchisee franchised by Company may construct, equip, open and operate additional Stores in the Area Development Territory. We agree that our proposal will be reasonable considering your compliance with the requirements under Section 4.5.

4.4 Exercise of Right of Additional Development

At the time Company delivers to Area Developer Company's written notice of its determination to undertake additional development in the Area Development Territory, Company shall also deliver to Area Developer a copy of Company's then-current Franchise Disclosure Document or its equivalent as may be required by applicable law (the "Disclosure Document") and two copies of the then-current area development agreement. ("Then-current," as used in this Agreement and applied to the Franchise Disclosure Document and Area Development Agreement shall mean the form then currently provided to prospective franchisees or Area Developers, or if not then being so provided, then such form selected by the Company in its sole discretion which previously has been delivered to and executed by a franchisee of Company).

Source: Item 22 — CONTRACTS (FDD pages 80–81)

What This Means (2025 FDD)

According to the 2025 Amorino FDD, the Area Development Agreement includes provisions addressing non-competition both during the term of the agreement and after its expiration or termination. During the agreement's term, Amorino agrees not to operate or franchise another business within the Area Development Territory granted to the Area Developer. However, Amorino retains the right to conduct other business activities, such as selling products through other channels or operating Amorino stores outside the designated territory.

Principals and managers associated with the Area Developer are required to sign a Confidentiality and Non-Competition Agreement. This agreement restricts them from engaging in any business that produces or sells ice cream products, other than an Amorino store, within specific geographic areas. These areas include the location of the former franchised business, the former protected area of the store (or a three-mile radius if no protected area existed), or within a three-mile radius of any other Amorino store. These restrictions apply during their employment or ownership and for two years after termination or expiration.

After the Area Development Agreement expires or terminates, the non-competition covenant remains in effect for two years. During this period, the Area Developer and their principals are prohibited from engaging in any business involved in the production or sale of ice cream products within the former Area Development Territory. Amorino also retains the right to modify or reduce the scope of these non-competition provisions.

These non-competition clauses are designed to protect Amorino's interests and prevent unfair competition. However, a court or arbitrator can modify these provisions if they are deemed unenforceable under applicable law. Prospective Area Developers should carefully review these non-competition terms and understand their implications before entering into an agreement with Amorino.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.