After termination or expiration of an Amorino franchise, can I operate a competing business?
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, there are post-termination and expiration covenants that restrict a franchisee's ability to operate a competing business. Specifically, for a two-year period after the franchise terminates or expires, the franchisee (or any officer, director, shareholder, general partner, or limited partner of a corporate or partnership franchisee) is restricted from certain activities.
The restrictions include diverting customers or suppliers of any Amorino store to a competitor, employing individuals who were recently employed by Amorino, and engaging in any business that produces or sells gelato or other ice cream products similar to those offered by Amorino. These restrictions apply within the United States, its territories, or commonwealths, and any other country, province, state, or geographic area where Amorino stores are located or planned. The restrictions are applicable at the location of former stores, within the former protected area (or a three-mile radius if no protected area existed), within a three-mile radius of any other Amorino store, or anywhere within the former territory.
These non-compete covenants are typical in franchising to protect the brand and system that Amorino has developed. A prospective franchisee should carefully consider the implications of these restrictions, especially if they have significant experience in the gelato or ice cream industry or plan to remain in the same geographic area after the franchise agreement ends. It is important to note that these restrictions are subject to state laws, which can vary significantly in their enforceability of non-compete agreements.