Under what conditions does the post-term non-compete agreement with Amorino commence?
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.
- 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.
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 begins upon the later of a transfer permitted under the agreement, the expiration of the agreement, or the termination of the agreement (regardless of the cause). It can also commence after 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. This agreement lasts for an uninterrupted period of two years thereafter. This applies to the franchisee and each of their principals.
During this two-year period, the franchisee and their principals are restricted from engaging in any business that produces or sells ice cream products at retail or wholesale, except for an Amorino store operated under a current franchise agreement with Amorino. This restriction applies to businesses located at the former franchised business location, within the former protected area of the store (or a three-mile radius if there was no protected area), or within a three-mile radius of any other store operating under the Amorino system and proprietary marks at the time of expiration, termination, or transfer.
Furthermore, if any principal ceases to own an interest in the franchisee during the franchise term, these non-compete covenants apply to the departing principal for a two-year period, starting from the date they no longer meet the definition of a principal. The obligations outlined in this section are suspended during any period of noncompliance. Amorino also requires each principal and manager to execute and deliver a Confidentiality and Non-Competition Agreement.