Who can directly operate the Antioch Pizza Shop restaurant if the franchisee does not?
Antioch_Pizza_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
6.4 In-Term Non-Competition Agreement. You agree that we would be unable to protect the Confidential Information against unauthorized use or disclosure and would be unable to encourage a free exchange of ideas and information between you and us if you or your Owners were permitted to hold interests in any competitive businesses, as described below. You also acknowledge that we have entered into this Agreement with you in part in consideration of, and in reliance on, your agreement to deal exclusively with us. Therefore, during the term of this Agreement, neither you, nor any Owner, may, either directly or indirectly, for yourself or through, on behalf of, or in conjunction with, any person or legal entity, own, maintain, operate, engage in, consult with or have any interest in (as disclosed or beneficial owner) any business which offers products or services which are the same as, or similar to, those offered by Antioch Pizza Shop Restaurant (other than through a franchise agreement with Franchisor), or any entity which is granting franchises or licenses for any business which offers products or services which are the same as, or similar to, those offered by Antioch Pizza Shop Restaurants. (The ownership of five percent (5%) or less of a publicly traded Franchisor will not be deemed to be prohibited by this paragraph.) Further, during the term of this Agreement, you will not divert customers or business from any Antioch Pizza Shop Restaurants to any other business.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
Based on the 2025 FDD, the Antioch Pizza Shop franchise agreement stipulates that the franchisee themselves, or their owners, cannot hold interests in competitive businesses during the term of the agreement, unless it's another Antioch Pizza Shop franchise. Specifically, the agreement states that neither the franchisee nor any owner can directly or indirectly own, maintain, operate, engage in, consult with, or have any interest in any business offering similar products or services to Antioch Pizza Shop, except through another franchise agreement with Antioch Pizza Shop. This restriction also applies to entities granting franchises or licenses for similar businesses.
This clause ensures that franchisees remain committed to the Antioch Pizza Shop system and do not divert resources or customers to competing ventures. The FDD specifies that owning 5% or less of a publicly traded company is an exception to this rule. Additionally, franchisees are prohibited from diverting customers from their Antioch Pizza Shop restaurant to any other business during the agreement's term.
After the termination or expiration of the franchise agreement, a franchisee is restricted for two years from engaging in a similar business involving the sale of pizza, burgers, Italian sandwiches, or desserts, within a 5 1/2 mile radius of any Antioch Pizza Shop restaurant. This post-termination restriction does not apply if the franchisee has agreements with Antioch Pizza Shop or operates outside the specified radius. These measures protect Antioch Pizza Shop's goodwill and the interests of other franchisees within the system.