Is the covenant not to compete in the Amorino franchise agreement, which extends beyond termination, always enforceable under California law?

According to Amorino's 2025 Franchise Disclosure Document, the enforceability of the non-compete covenant extending beyond the termination of the franchise agreement is not guaranteed under California law. Specifically, the California Addenda section of the FDD addresses this issue. This means that if a franchisee operates an Amorino franchise in California, the standard non-compete terms might not be fully upheld by California courts.

This has significant implications for both Amorino and its franchisees in California. For Amorino, it means that protecting its business model and market share in California might be more challenging compared to other states where post-termination non-compete agreements are strictly enforced. The franchisor may need to rely on other legal mechanisms, such as trade secret protection or non-solicitation agreements, to safeguard its interests.

For a prospective Amorino franchisee in California, this could be seen as a potential benefit. If they decide to leave the Amorino system, the restrictions on starting a competing business might be less stringent than in other states. However, it's important to note that even if the non-compete agreement is not fully enforceable, other aspects of the franchise agreement, such as confidentiality clauses, could still impose limitations on their future business activities. It would be prudent for potential franchisees to seek legal counsel to fully understand the implications of California law on the franchise agreement.