Does the Carbones Pizzeria agreement define 'Restricted Area' in this section?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
ion may be venued in any court having jurisdiction over all the parties and a significant nexus to the parties; and (2) to the extent that either party believes it is necessary to seek injunctive relief against the other, the party seeking relief may initiate that action in the county in which the other party has its principal office (which in the case of an action against Franchisee, shall be the county in which Franchisee is domiciled, or the county in which the Restaurant is located).
26. Definitions.
The following definitions shall apply to this Agreement:
- a. Competing Business. The term "Competing Business" means an eat-in, or take-out, or combination eat-in/take out restaurant of any other facility that serves pizza.
- b. Confidential Information. The term "Confidential Information" means all business plans and methods developed by Franchisor and its affiliates to be used in connection with the operation of a restaurant or other facility operated under the Names and Marks, including the Secret Recipes, any other recipes, standards, specifications, methods, procedures, techniques, sourcing, technology, and management systems, all of which may be changed, improved, and further developed from time to time by Franchisor, and all information contained in Franchisor's Operations Manual as it may be amended from time to time by Franchisor (the "Manual").
- c. Gross Sales. The term "Gross Sales" shall mean the total amount of revenues, income, receipts and other amounts received from all business activities taking place by or through the Restaurant, and all other services and products, if any, sold under the Names and Marks, or otherwise, including amounts received for catering or for food and beverages
sold from a food truck or other vehicle.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, the agreement does define the term "Restricted Area".
The definition provided in the FDD states that the "Restricted Area" means the Franchisee Territory, a radius of 25 miles from the Franchisee Territory, and a radius of 5 miles from any other restaurant or other facility operated under the Names and Marks. This definition is important because it outlines the geographic area in which certain restrictions apply to the franchisee, particularly concerning competition with other Carbones Pizzeria outlets.
This definition impacts the franchisee in several ways. Firstly, it determines the area where the franchisee receives territorial protection, preventing Carbones Pizzeria from opening or franchising another location. Secondly, it defines the area where the franchisee is restricted from operating a competing business during the term of the agreement and for a period of two years after termination or assignment of the agreement. This non-compete clause ensures that franchisees cannot use the knowledge and training gained from Carbones Pizzeria to directly compete against the franchise system within a specified area.
Prospective franchisees should carefully consider the implications of the "Restricted Area" definition, as it directly affects their ability to expand or operate other businesses, especially after the franchise agreement ends. Understanding these restrictions is crucial for assessing the long-term viability and potential profitability of a Carbones Pizzeria franchise.