Does the post-term non-compete agreement with Amorino apply to my Principals?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, the post-term non-compete agreement does apply to your Principals. Specifically, upon the transfer, expiration, or termination of the franchise agreement, both you and your Principals are subject to certain restrictions.
The non-compete lasts for two years after the agreement's end. During this period, neither you nor your Principals can engage in or have any association with a business that produces or sells ice cream products at retail or wholesale. This restriction applies to businesses located at the former franchise location, 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.
Furthermore, if a Principal ceases to have an interest in the franchise during the franchise term, the non-compete applies to them for two years from the date they no longer meet the definition of a Principal. The obligations under the non-compete are suspended during any period of noncompliance, effectively extending the restriction if it's violated.