If an Amorino franchisee is non-compliant with post-termination restrictions, how does that affect the duration of those restrictions?

According to Amorino's 2025 Franchise Disclosure Document, the duration of the post-termination non-compete obligations can be extended if a franchisee is non-compliant. Specifically, the standard two-year non-compete period is tolled, meaning it pauses and effectively lengthens, for the entire duration of the franchisee's noncompliance. This ensures that Amorino's interests are protected even if a former franchisee violates the terms of the agreement.

For a prospective Amorino franchisee, this means that violating the non-compete agreement after the franchise term ends can have significant consequences. The two-year clock doesn't simply run out; it stops during the period of violation and resumes only when the non-compliance ceases. This could substantially prolong the period during which the former franchisee is restricted from engaging in competitive activities.

This provision is designed to prevent former franchisees from unfairly competing with Amorino by leveraging the knowledge and experience gained during their time as a franchisee. It also serves as a deterrent against violating the non-compete agreement, as the penalties for non-compliance effectively extend the period of restriction. Franchisees should carefully consider the implications of this clause and ensure they fully understand their obligations before and after the termination or expiration of their franchise agreement.