What happens if I violate the non-compete clause in the Amorino Franchise Agreement?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
- (16) you or any Principal fails to comply with the confidentiality or
noncompete covenants in Section of this Agreement;
- 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.
The obligations described in this Section shall be tolled during any period of noncompliance.
- 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.
- (11) You shall pay us a delay fee of $500 U.S. Dollars for each day that you continue to violate the post-termination obligations in this Section.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, violating the non-compete covenants within the Franchise Agreement can lead to specific repercussions. If you or any of your Principals fail to comply with the confidentiality or noncompete covenants, it is considered a breach of the agreement.
Item 22 details the contracts and agreements a franchisee must adhere to, including stipulations around non-competition both during the franchise term and after its expiration or termination. The non-compete clause restricts you and your Principals from engaging in any business involved in the production or sale of ice cream products within specific geographic areas. These areas include the location of the former franchised business, the former protected area of the store (or a three-mile radius if no protected area existed), or within a three-mile radius of any other Amorino store. This restriction applies for two years after the agreement's expiration or termination.
Furthermore, Amorino can impose a delay fee of $500 per day for continued violation of post-termination obligations, in addition to other potential legal remedies. The obligations described in the non-compete section will be suspended during any period of noncompliance. This means the clock stops on the two-year restriction while you are in violation, and resumes only when you cease the violating activity.
Principals and managers are also required to sign a Confidentiality and Non-Competition Agreement, reinforcing these obligations. Therefore, it is crucial to understand and adhere to these covenants to avoid penalties and legal issues with Amorino.