Does the exception for publicly held companies apply to ownership of 5% or more of the equity securities?

According to Amorino's 2025 Franchise Disclosure Document, the restrictions outlined in the confidentiality and non-competition agreements do not apply to ownership or any Principal's ownership of less than a 5% beneficial interest in the outstanding equity securities of any company registered under the Securities Act of 1933 or the Securities Exchange Act of 1934. This exception is specifically for publicly held companies.

This means that if a franchisee or their principal owns less than 5% of a publicly traded company's stock, the standard non-compete restrictions in the Amorino franchise agreement do not apply to that ownership. This allows franchisees and their principals to invest in publicly traded companies, even those that might be considered competitors, without violating their franchise agreement, as long as their ownership stake remains below the 5% threshold.

However, if a franchisee or their principal owns 5% or more of the equity securities of a publicly held company, the standard non-compete restrictions would apply. This is an important consideration for prospective franchisees who have existing investments or plan to invest in publicly traded companies. They need to ensure their ownership stake remains below the 5% threshold to avoid potential conflicts with the Amorino franchise agreement.