Can a Carbones Pizzeria franchisee operate a business that grants franchises for a Competing Business after the termination of the agreement within the restricted area?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
ectly or indirectly, or via any third party. However, Franchisee may deliver outside of its Franchisee Territory into areas that are not in a franchisee territory of another Carbone's Pizza franchisee, but if Franchisor grants a franchise territory which includes any such area, Franchisee shall immediately cease delivery activities in such area. e
4. Covenant Not to Compete; Covenant as to Trade Secrets.
- 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.
- b. In the event of the violation of Section 4.a.(2) by Franchisee, the period of time Franchisee shall be required to abide by the breached obligation shall be extended to a period of two (2) years after Franchisee is no longer in breach of such obligation.
- c. Franchisee further agrees that at no time shall it or any of its owners or employees, use any Confidential Information (as defined below) directly or indirectly, except as necessary for the proper operation of the Franchise pursuant to this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, a franchisee is restricted from operating a business that grants franchises for a Competing Business for a period of two years after the termination or assignment of the franchise agreement. This restriction applies 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 Names and Marks. A Competing Business is defined as an eat-in, take-out, or combination eat-in/take-out restaurant of any other facility that serves pizza.
This non-compete clause prevents a former Carbones Pizzeria franchisee from leveraging the knowledge and training gained during their time with the franchise to directly compete with Carbones Pizzeria within a defined geographical area. The clause also extends to businesses that grant franchises for competing pizza restaurants, preventing the franchisee from indirectly competing by enabling others to do so. If the franchisee violates this agreement, the period of time the franchisee shall be required to abide by the breached obligation shall be extended to a period of two years after the franchisee is no longer in breach of such obligation.