Does the non-compete agreement for Amorino extend to Principals of the franchisee?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
concerning each person or Business Entity who may have any direct or indirect financial interest in your Business Entity.
- C. Non-Competition During Term of Agreement. 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
approved in writing by Amorino, you and, if applicable, such Principal, shall not, either directly or indirectly, for yourselves, or through, on behalf of, or in conjunction with any person, or legal entity:
- (1) Divert or attempt to divert any present or prospective customer or supplier of the Franchised Business to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Proprietary Marks and the System.
- (2) Employ or seek to employ any person who is or has been within the previous 30 days employed by Amorino or an Affiliate of Amorino as a salaried managerial employee, or otherwise directly or indirectly induce such person to leave his or her employment.
- (3) Own, maintain, advise, operate, engage in, be employed by, make loans to, invest in, provide any assistance to, or have any interest in (as owner or otherwise) or relationship or association with, any business that engages in the production or sale at retail or wholesale of gelato or other ice cream products, and any other products or services offered by your Store or proposed to be offered by your Store or similar Amorino Stores, other than a Amorino Store operated pursuant to a then-currently effective franchise agreement with Amorino at any location within the United States, its territories or commonwealths, or any other country, province, state or geographic area in which Amorino or its Affiliates have used, sought registration of or registered the Proprietary Marks or similar marks or operate or license others to operate a 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. 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.
- E. Confidentiality and Non-Competition Agreements to Be Executed by Your Principals and Managers.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, the non-compete agreement does extend to the Principals of the franchisee both during the term of the agreement and after expiration or termination. During the term of the agreement, both the franchisee and each Principal are prohibited from engaging in any business that produces or sells gelato or other ice cream products, except for an Amorino store operated under a franchise agreement with Amorino. This restriction applies within the United States, its territories, commonwealths, or any other country where Amorino or its affiliates have used or registered their Proprietary Marks.
Following the expiration or termination of the franchise agreement, the franchisee and each Principal are subject to a two-year non-compete period. During this time, they cannot own, maintain, advise, operate, or be involved with any business that produces or sells ice cream products. This restriction applies to the location of the former franchised business, 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 in existence or under development. If a Principal ceases to own an interest in the Franchisee during the franchise term, the non-compete applies to them for two years from their departure.
Each Principal and manager must also sign a Confidentiality and Non-Competition Agreement. This agreement ensures that Principals and managers are legally bound to protect Amorino's confidential information and adhere to the non-compete terms. The obligations outlined in the non-compete agreement are tolled during any period of noncompliance, meaning the clock stops on the restriction until compliance is restored. This comprehensive non-compete aims to protect Amorino's market position and proprietary information by preventing franchisees and their Principals from using their knowledge gained from the Amorino system to compete against it, both during and after the franchise agreement.