Does the Amorino franchise agreement allow Amorino to sell the System?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
Based on the 2025 Amorino Franchise Disclosure Document, the franchise agreement outlines several rights Amorino retains, implying they can sell the System. Specifically, Amorino retains the right to: offer and sell franchises to individuals outside a franchisee's Area Development Territory; offer and sell franchising rights to Area Developers outside the Territory; be acquired by entities providing similar or dissimilar products/services; and offer/sell goods similar to those at Amorino stores at public events, even within a franchisee's territory. These provisions suggest Amorino maintains control over the franchise system's expansion and can make strategic decisions, including those related to the brand's ownership or offerings.
These retained rights have several implications for prospective Amorino franchisees. First, Amorino can expand the franchise network outside a franchisee's territory, potentially increasing brand recognition but also intensifying competition in the broader market. Second, Amorino's ability to be acquired by another company could lead to changes in the franchise system, such as new product offerings or operational procedures. Finally, Amorino's right to sell similar goods at public events, even within a franchisee's territory, could directly compete with the franchisee's sales, especially at local festivals or exhibitions.
While the FDD excerpts do not explicitly state that Amorino can sell the entire "System" outright, the extensive rights retained by Amorino suggest a high degree of control over the brand and its future direction. A prospective franchisee should carefully consider these retained rights and how they might impact their investment and business operations. It would be prudent to discuss these points with Amorino during the due diligence process to gain a clearer understanding of the franchisor's long-term plans and potential exit strategies.