What is the non-competition agreement during the term of the Amorino franchise agreement related to?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, during the term of the franchise agreement, franchisees and their principals are restricted from certain activities to protect Amorino's interests. Specifically, unless Amorino provides written approval, franchisees and principals cannot divert customers or suppliers to competitors, hire employees of Amorino or its affiliates, or be involved with any business that produces or sells gelato, ice cream, or similar products and services offered by Amorino, except for another Amorino franchise. This restriction applies to any location where Amorino uses or has registered its trademarks.
These non-compete terms prevent franchisees from using Amorino's confidential information, training, and brand recognition to benefit a competing business. The agreement aims to safeguard Amorino's market position and goodwill by ensuring that franchisees remain fully committed to the Amorino system during the term of their agreement. This is a fairly standard practice in franchising, as franchisors need to protect their brand and business model.
The non-compete obligations extend to the franchisee's principals, meaning that these individuals are also bound by the same restrictions. This is to prevent individuals with significant influence or ownership in the franchise from circumventing the agreement. The agreement specifies that these restrictions apply to businesses involved in the production or sale of gelato, ice cream, or other products and services offered or proposed to be offered by Amorino stores. This broad definition ensures that franchisees cannot operate a similar business under a different name or concept.
Amorino retains the right to modify the scope of the non-compete covenant without the franchisee's consent, providing written notice of the change. Franchisees and their principals must comply with any such modifications immediately. Additionally, the existence of any claims the franchisee may have against Amorino does not serve as a defense against Amorino's enforcement of the non-compete agreement. Amorino can seek injunctive relief and recover all associated costs and legal fees if a franchisee violates the non-compete agreement, acknowledging that such violations would cause irreparable harm to Amorino.