Does the Guarantor's guarantee for an Amorino franchise include non-competition, confidentiality, and transfer requirements?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
(7) If the transferee is a Business Entity, then each of the transferee's Principals and their spouse or registered domestic partner shall have delivered to us a guaranty in our then-current standard form of guaranty.
E.
Confidentiality and Non-Competition Agreements to Be Executed by Your Principals and Managers.
Each of your Principals and managers shall execute and deliver to us a Confidentiality and Non-Competition Agreement in the form of Attachment C.
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.
You and each Principal acknowledge that you and each Principal will receive valuable specialized training and Confidential Information, including information regarding the operational, sales, promotional, and marketing methods and techniques and trade secrets of Amorino and the System. You and each Principal also agree that the license to use the Proprietary Marks and Marks and to receive the benefit of the goodwill symbolized by the Proprietary Marks and Marks will provide a competitive advantage, and is the primary reason you are entering into this Agreement. You and each Principal covenant and agree that during the term of this Agreement, except as otherwise
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, the guarantee does address non-competition and confidentiality. Specifically, Principals and managers are required to execute a Confidentiality and Non-Competition Agreement. This agreement is in the form of Attachment C to the franchise agreement.
Furthermore, both the franchisee and each Principal acknowledge that they will receive valuable specialized training and Confidential Information, including details about Amorino's operational, sales, promotional, and marketing methods, as well as trade secrets. During the term of the agreement, the franchisee and each Principal agree not to engage, either directly or indirectly, in any competitive business without written approval from Amorino.
Upon the transfer, expiration, or termination of the franchise agreement, the franchisee and each of their Principals are restricted from engaging in the production or sale of ice cream products within specific geographic areas for a period of two years. These areas include the location of the former Franchised Business, the former Protected Area of the store (or a three-mile radius if there was no protected area), or within a three-mile radius of any other Amorino store. The FDD does not explicitly state that the Guarantor's guarantee includes specific transfer requirements, but it does state that a transfer of the franchise requires that if the transferee is a Business Entity, then each of the transferee's Principals and their spouse or registered domestic partner shall have delivered to Amorino a guaranty in Amorino's then-current standard form of guaranty.
Prospective franchisees should carefully review Attachment C and the standard form of guaranty to fully understand the scope and terms of the non-competition and confidentiality obligations, as well as the implications for Principals and managers. They should also seek clarification from Amorino regarding any specific transfer requirements applicable to the Guarantor.