Is Carbones Pizzeria allowed to acquire similar businesses within the franchisee's territory?

According to Carbones Pizzeria's 2025 Franchise Disclosure Document, Carbones Pizzeria and its affiliates have the right to acquire businesses similar to the franchisee's restaurant within the franchisee's territory. They can do so through the sale of assets or stock to anyone, regardless of whether these acquired businesses operate or franchise similar businesses. This clause provides Carbones Pizzeria with significant flexibility in managing and expanding its business, even within a franchisee's territory.

This provision means that a Carbones Pizzeria franchisee's territory is not entirely exclusive. While Carbones Pizzeria agrees not to grant another franchise for a restaurant operating under the Carbone's Pizza or Carbone's Pizzeria name within the franchisee's territory, this restriction does not prevent Carbones Pizzeria from owning or acquiring similar businesses that do not operate under those specific names. This could potentially lead to increased competition within the franchisee's territory from businesses directly or indirectly controlled by Carbones Pizzeria.

For a prospective franchisee, this is a critical point to consider. While the franchise agreement grants a territory, the franchisor retains the right to operate or acquire similar businesses within that territory, provided they do not use the Carbone's Pizza or Carbone's Pizzeria names. This could impact the franchisee's market share and profitability. It would be prudent for a potential franchisee to discuss this provision with Carbones Pizzeria to understand their strategic plans for the territory and the potential impact on the franchisee's business.