For a Carbones Pizzeria franchise, does the definition of 'Competing Business' include restaurants with take-out service?

According to Carbones Pizzeria's 2025 Franchise Disclosure Document, a 'Competing Business' is defined to include restaurants with take-out service. Specifically, the FDD states that a 'Competing Business' means an eat-in, or take-out, or combination eat-in/take out restaurant of any other facility that serves pizza. This definition is important because the franchise agreement contains a covenant not to compete, restricting franchisees from involvement with Competing Businesses during the term of the agreement and for a period after termination or assignment.

This definition impacts a Carbones Pizzeria franchisee because it restricts the franchisee, during the term of the agreement, from operating, owning, managing, or being employed by or consulting with any Competing Business other than one operated under a valid franchise agreement with Carbones Pizzeria. This restriction also applies to any business or venture that is granting franchises or licenses for the operation of a Competing Business. The franchisee is also prohibited from diverting or attempting to divert any customer or potential customer to any competitor of the Carbone System.

Post-termination or assignment of the franchise agreement, the franchisee is further restricted for two years from involvement with any Competing Business located or doing business in the Restricted Area, which includes 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. These restrictions are designed to protect Carbones Pizzeria from unfair competition using the franchisor's training, assistance, and trade secrets.

Given the broad definition of 'Competing Business', a prospective franchisee should carefully consider the implications of the non-compete clause. It is essential to understand the scope of the Restricted Area and the types of businesses that could be considered competitive. Franchisees should also be aware that violating the non-compete agreement could result in legal action, including injunctive relief, as Carbones Pizzeria's remedy at law is considered inadequate in such cases.