What constitutes a 'Competing Business' for a Carbones Pizzeria franchise?

According to Carbones Pizzeria's 2025 Franchise Disclosure Document, a 'Competing Business' is defined as any eat-in, take-out, or combination eat-in/take-out restaurant or other facility that serves pizza. This definition is important for franchisees to understand because it directly relates to the covenant not to compete, which restricts their ability to engage with similar businesses during and after the franchise agreement term.

During the term of the Franchise Agreement, a franchisee is prohibited from operating, owning, managing, or being employed by or consulting with any Competing Business, unless it's another Carbones Pizzeria franchise. This restriction also extends to businesses that grant franchises or licenses for the operation of a Competing Business. Furthermore, franchisees are barred from diverting or attempting to divert customers to any competitor of the Carbone System.

After the termination or assignment of the Franchise Agreement, the restrictions continue for two years within a defined Restricted Area. This area includes the Franchisee Territory, a 25-mile radius from the Franchisee Territory, and a 5-mile radius from any other restaurant operating under the Carbones Pizzeria name. During this period, franchisees cannot operate, own, manage, be employed by, lease space to, lend money to, or consult with any Competing Business, again with the exception of another Carbones Pizzeria franchise. These restrictions are designed to protect Carbones Pizzeria's market share and prevent franchisees from using the franchisor's trade secrets and training to benefit a competing business.

It is important to note that these restrictions are in place to protect Carbones Pizzeria from unfair competition. Franchisees should carefully consider the implications of these non-compete clauses before entering into a franchise agreement, particularly if they have prior experience in the pizza restaurant industry or plan to remain in the same geographic area after the franchise agreement ends. Franchisees should seek legal counsel to fully understand the scope and enforceability of these restrictions in their specific jurisdiction.