Who is subject to the in-term non-competition agreement for an Antioch Pizza Shop franchise?
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)
According to Antioch Pizza Shop's 2025 Franchise Disclosure Document, the in-term non-competition agreement applies to both the franchisee and their Owners. This means that during the term of the Franchise Agreement, neither the franchisee nor any of their Owners can directly or indirectly own, maintain, operate, engage in, consult with, or have any interest in any business that offers products or services similar to those offered by Antioch Pizza Shop restaurants. This restriction also extends to entities that grant franchises or licenses for similar businesses. The agreement aims to protect Antioch Pizza Shop's confidential information and encourage a free exchange of ideas between the franchisee and the franchisor.
The in-term non-competition agreement ensures that franchisees and their Owners remain fully committed to the Antioch Pizza Shop system and do not divert resources or knowledge to competing ventures. This is a standard practice in franchising to safeguard the brand's market position and prevent franchisees from using the franchisor's proprietary information to benefit a competing business. The agreement also prohibits franchisees from diverting customers or business from any Antioch Pizza Shop restaurants to any other business.
There is an exception to this restriction: ownership of five percent (5%) or less of a publicly traded franchisor is not prohibited. This allows franchisees and their Owners to make minor investments in other companies without violating the non-competition agreement. However, it's crucial for prospective franchisees to understand the full scope of the non-competition agreement and how it might affect their other business interests or investment opportunities during the term of their Antioch Pizza Shop franchise.