Does the restriction on operating a competing business after termination of an Amorino franchise apply to businesses under development at the time of termination?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
| Non r. competition covenants after the franchise is | Section 18.D of the franchise agreement | During a two-year uninterrupted period after the expiration or termination, neither you, nor any officer, director, shareholder or general partner or limited partner of a corporate or partnership franchisee, shall: |
|---|---|---|
| terminated or expires | (1) Divert or attempt to divert any present or prospective customer or supplier of any Amorino Store 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 | ||
| maintenance, and any other products or services offered by | ||
| your Store or proposed to be offered by your Store or offered | ||
| by Amorino stores, at any location within the United States, | ||
| its territories or commonwealths, or any other country, | ||
| province, state or geographic area that (i) is, or is intended to | ||
| be, located at the acquisition of any of your former stores; (ii) | ||
| within the former protected area of any of your stores (or, if | ||
| there was no protected area, | ||
| within a three-mile radius of the | ||
| store); (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; or (iv) anywhere within your former | ||
| territory. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 55–67)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, the post-term non-compete covenants apply to businesses under development at the time of termination. Specifically, for a two-year period after the expiration or termination of the franchise, the franchisee (or any related officer, director, shareholder, or partner) is restricted from involvement with any business that engages in the production or sale of gelato, ice cream, or other products and services offered by Amorino.
This restriction extends to businesses operating under the Amorino system and proprietary marks that are in existence or under development at the time of termination. The restricted area includes the location of former stores, the former protected area (or a three-mile radius if no protected area existed), and a three-mile radius of any other Amorino store operating under the system.
This means that a former Amorino franchisee is prohibited from owning, maintaining, advising, operating, or investing in a competing gelato or ice cream business within a specific geographic area that includes existing Amorino locations and those under development. This non-compete obligation is in place for two years after the franchise relationship ends, regardless of whether it ends through expiration, termination, or transfer.