Does the Amorino franchise agreement prevent a franchisee from investing in a business that sells gelato after the franchise agreement terminates?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
D.
Non-Competition After Expiration or Termination of Agreement.
Commencing upon the later of: (a) a transfer permitted under this Agreement, expiration of this Agreement, or termination of this Agreement (regardless of the cause for termination) or (b) a final court order (after all appeals have been taken) with respect to any of the foregoing events or with respect to enforcement of this Section, and continuing for an uninterrupted period of two years thereafter, you and each of your Principals, shall not either directly or indirectly, for yourselves, or through, on behalf of, or in conjunction with any person, persons, or legal entity, own, maintain, advise, operate, engage in, be employed by, make loans to, or have any interest in or relationship or association with a business that engages in the production or sale at retail or wholesale of ice cream products, other than a Amorino Store operated pursuant to a then currently effective franchise agreement with Amorino, and (i) is, or is intended to be, located at the location of the former Franchised Business; (ii) within the former Protected Area of the Store (or, if there was no protected area, within a three-mile radius of the Store); or (iii) within a three-mile radius of any other store operating under the System and Proprietary Marks in existence or under development at the time of such expiration, termination or transfer.
If any Principal ceases to own an interest in the Franchisee for any reason during the franchise time, the foregoing covenants shall apply to the departing Principal for a two-year period beginning on the date such person ceases to meet the definition of a Principal.
The obligations described in this Section shall be tolled during any period of noncompliance.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, the franchise agreement includes non-compete clauses that restrict a franchisee's activities after the agreement expires or is terminated. Specifically, for a two-year period after the agreement ends, the franchisee (and their principals) is restricted from owning, maintaining, advising, operating, or investing in any business that produces or sells gelato or other ice cream products. This restriction applies to businesses located at the former Amorino franchise location, within the former protected area (or a three-mile radius if no protected area existed), or within a three-mile radius of any other Amorino store.
This non-compete obligation extends to the United States, its territories and commonwealths, and any other country, province, state, or geographic area where Amorino or its affiliates have used, sought registration of, or registered their proprietary marks. The restrictions also apply to any officer, director, shareholder, or general/limited partner of a corporate or partnership franchisee. These obligations are suspended during any period of noncompliance, effectively extending the restriction if a franchisee violates the terms.
These post-term non-compete restrictions are common in franchising to protect the brand and prevent franchisees from using the franchisor's knowledge and trade secrets to compete against the system after leaving. However, the specific terms, duration, and geographic scope can vary significantly between franchise systems. Prospective Amorino franchisees should carefully consider the implications of these restrictions, especially if they have prior experience in the gelato or ice cream industry or plan to remain in the same geographic area after the franchise agreement ends.
It is important to note that these restrictions are subject to state laws, which may limit the enforceability of non-compete agreements. Franchisees should consult with legal counsel to understand the specific enforceability of these provisions in their jurisdiction.