Does the restriction on operating a competing business after termination of an Amorino franchise apply to both retail and wholesale sales of gelato?
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-termination non-compete clause does apply to both retail and wholesale sales of gelato. Specifically, for a period of two years after the franchise agreement expires or is terminated, the franchisee (or its officers, directors, shareholders, or partners) is restricted from engaging in any business that involves the production or sale of gelato, whether at the retail or wholesale level.
This restriction extends to owning, maintaining, advising, operating, being employed by, making loans to, investing in, providing assistance to, or having any interest in a business that sells gelato. The geographic scope of this restriction includes the location of the former Amorino store, its protected area (or a three-mile radius if there was no protected area), a three-mile radius around any other Amorino store, and the franchisee's former territory.
This non-compete clause is fairly standard in franchising to protect the brand and prevent former franchisees from using the franchisor's knowledge and trade secrets to compete against the system. A prospective Amorino franchisee should carefully consider the implications of this restriction, especially if they have significant experience or interest in the gelato business, as it could limit their business opportunities for two years after leaving the Amorino system.