What assurance does Amorino provide regarding other outlets in the Development Territory?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
re 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;
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, Amorino grants Area Developers certain protections within their designated Area Development Territory. Specifically, Amorino assures that during the term of the Area Development Agreement, it will not operate or franchise another entity to operate an Amorino Franchised Business within the Area Development Territory. This provision aims to provide a degree of exclusivity, allowing the Area Developer to establish and grow their Amorino business without direct competition from other franchised or company-owned Amorino stores within the defined territory.
However, Amorino retains several rights that could impact the Area Developer's business. Amorino reserves the right to market products or services through channels other than an Amorino store, such as retail establishments or the internet, even within the Area Development Territory. Additionally, Amorino can establish Amorino stores outside the Area Development Territory, even if they are near the territory's boundaries. Amorino also retains the right 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. These reservations mean that while direct Amorino store competition is restricted, other forms of competition from Amorino are possible.
Furthermore, Amorino is not restricted from operating other businesses under different trademarks, even within the Area Development Territory. This means that Amorino or its affiliates could operate businesses that compete with the Amorino franchise as long as they do not use the Amorino brand. The agreement also states that if Amorino acquires a business already operating in the Area Development Territory, and that business does not convert to an Amorino store, the Area Developer is not entitled to any revenue from that acquired business. Therefore, while Amorino provides some territorial protection, these numerous exceptions and reserved rights significantly limit the scope of that protection for the Area Developer.