Is a Carbones Pizzeria franchisee allowed to consult with a competing business during the term of the agreement?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
- a. Franchisee acknowledges Franchisor must be protected against the potential for unfair competition by Franchisee's use of Franchisor's training, assistance and trade secrets in direct competition with Franchisor or its franchisees. Franchisee therefore agrees that it shall not:
- (1) During the term of this Agreement, either directly or indirectly: (a) operate, own, manage, or be employed by or consult with, any Competing Business other than one operated under a valid franchise agreement with Franchisor, or any business or venture that is granting franchises or licenses for the operation of a Competing Business; or (b) divert or attempt to divert any customer or potential customer to any competitor of the Carbone System.
- (2) For two (2) years following the termination or assignment of this Agreement, either directly or indirectly, operate, own, manage, be employed by, lease space to, lend money to, or consult with, any Competing Business, other than one operated under a valid franchise agreement with Franchisor, or any business or venture that is granting franchises or licenses for the operation of a Competing Business, that is located or doing business in the Restricted Area.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, a franchisee is restricted from engaging with competing businesses during the term of the agreement. Specifically, the franchisee is prohibited from operating, owning, managing, or being employed by or consulting with any Competing Business. A "Competing Business" is defined as any eat-in, take-out, or combination restaurant that serves pizza. The only exception to this restriction is if the competing business is operated under a valid franchise agreement with Carbones Pizzeria itself.
This restriction also extends to any business or venture that grants franchises or licenses for the operation of a Competing Business. Furthermore, the franchisee is prohibited from diverting or attempting to divert any customer or potential customer to any competitor of the Carbone System. This non-compete obligation is in place to protect Carbones Pizzeria's training, assistance, and trade secrets from being used to benefit a competitor.
After the termination or assignment of the franchise agreement, the franchisee is further restricted for two years from operating, owning, managing, being employed by, leasing space to, lending money to, or consulting with any Competing Business within the Restricted Area. The "Restricted Area" is defined as 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 Carbones Pizzeria Names and Marks. If the franchisee violates this post-term non-compete obligation, the period of restriction will be extended for an additional two years after the breach ceases. This is a fairly standard non-compete clause in franchising, designed to protect the brand's market share and confidential information.