What is the geographic scope of the non-compete restriction for an Amorino franchisee after the termination or expiration of the franchise agreement if there was no protected area?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
business under the Proprietary Marks or similar marks.
- 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.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, if an Amorino franchisee's agreement expires or is terminated and the franchise did not have a protected area, the franchisee is restricted from engaging in businesses involving the production or sale of ice cream products for two years. This restriction applies to businesses located at the former franchise location, within a three-mile radius of the former store, or within a three-mile radius of any other Amorino store operating under the Amorino system and proprietary marks. This includes stores in existence or under development at the time of termination or expiration. The non-compete applies to the franchisee and their principals.
This means that after leaving the Amorino system, a former franchisee without a protected area cannot open a competing ice cream business within a defined radius of their old location or any other Amorino location. This restriction aims to protect Amorino's market share and brand reputation by preventing former franchisees from directly competing in close proximity. The two-year period is designed to prevent the franchisee from leveraging knowledge and relationships gained while operating the Amorino franchise to unfairly compete immediately after leaving the system.
The non-compete obligations are tolled during any period of noncompliance, meaning that if a franchisee violates the non-compete agreement, the period of non-competition will be extended by the length of the violation. This provision ensures that Amorino can enforce the full two-year non-compete period, even if the franchisee attempts to circumvent it. Prospective franchisees should carefully consider these restrictions and their potential impact on future business opportunities before entering into a franchise agreement with Amorino.
It is important to note that the non-compete agreement also extends to the franchisee's principals, meaning individuals with significant ownership or management roles. This ensures that those who were closely involved in the operation of the Amorino franchise are also restricted from competing, further protecting Amorino's interests. The geographic scope and duration of the non-compete are standard practices in franchising to protect the brand and prevent unfair competition from former franchisees.