Does the Amorino Personal Guaranty include non-competition, confidentiality, and transfer requirements?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
iod 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.
- F. Additional Provisions. The parties acknowledge and agree that Amorino shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Section 18, or any portion thereof, without your consent or the consent of any Principal, effective immediately upon delivery of written notice to the affected party; and you and each Principal agree that such person shall comply forthwith with any covenant as so modified. You and each Principal expressly agree that the existence of any claims you may have against Amorino, whether or not arising from this Agreement, shall not constitute a defense to Amorino's enforcement of the covenants in this Section 18. You and each Principal agree to pay all costs and expenses (including reasonable attorneys' fees) incurred by Amorino in connection with the enforcement of this Section 18.
- G. Breach of Covenants Causes Irreparable Injury. You acknowledge that your violation of any covenant of this Section 18 would result in irreparable injury to Amorino for which no adequate remedy at law may be available, and you consent to the issuance of, and agree to pay all court costs and reasonable attorneys' fees incurred by Amorino in obtaining, without the posting of any bond, an ex parte or other order for injunctive or other legal or equitable relief with respect to such conduct or action.
- H. Exception for Publicly Held Companies. The foregoing restrictions shall not apply to your ownership or any Principal's ownership of less than a 5% beneficial interest in the outstanding equity securities of any company registered under the Securities Act of 1933 or the Securities Exchange Act of 1934.
- I. Improvements. If you, your employees, or any Principals develop any new concept, process or improvement in the operation or promotion of an Amorino Store or to any Proprietary Mark or Copyrighted Materials or other intellectual property (an "Improvement"), you agree to promptly notify Amorino and provide Amorino with all necessary related information, without compensation. Any such Improvement shall become Amorino's sole property and Amorino shall be the sole owner of all related patents, patent applications, and other intellectual property rights. You and your Principals hereby assign to Amorino (or if a formal assignment is required you agree to execute such assignment) any rights you or your Principals may have or acquire in the Improvements, including the right to modify the Improvement, and waive and/or release all rights of restraint and moral rights therein and thereto. You and your Principals agree to assist Amorino in obtaining and enforcing the intellectual property rights to any such Improvement in any and all countries and further agree to execute and provide Amorino with all necessary documentation for obtaining and enforcing such rights. You and your Principals hereby irrevocably designate and appoint Amorino as agent and attorney-in-fact for you and for them to execute and file any such documentation and to do all other lawful acts to further the prosecution and issuance of patents or other intellectual property right related to any such Improvement.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, the personal guaranty does address non-competition and confidentiality. Specifically, Principals and managers are required to sign a Confidentiality and Non-Competition Agreement, the form of which is included as Attachment C to the FDD. This agreement is applicable both during the term of the franchise agreement and for a period of two years after the agreement's expiration or termination.
The non-competition covenant prevents franchisees and their Principals from engaging in businesses that produce or sell 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 if a Principal ceases to have an interest in the franchise.
Additionally, the FDD states that Amorino has the right to modify the scope of any covenant, including non-competition clauses, without the franchisee's consent. Franchisees and Principals also agree that any claims against Amorino do not constitute a defense against the enforcement of these covenants. A breach of these covenants would cause irreparable injury to Amorino, allowing them to seek injunctive relief and recover associated costs and attorney's fees. The FDD does not explicitly state that the Personal Guaranty includes transfer requirements, but it does outline conditions and obligations related to the transfer of the franchise agreement.