What is the 'Franchisee Territory' for a Carbones Pizzeria franchise defined as?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
ss than one hundred eighty (180) days and not more than three hundred sixty-five (365) days prior to the expiration of the initial ten (10) year term.
- c. Franchisee shall not be obligated to pay the franchise fee described in Section 5(a) of this Agreement in the event of any such renewal, but shall pay the Renewal Fee.
3. Territory.
- a. During the term of this Agreement, and provided that Franchisee is not in default under this Agreement, Franchisor will not grant to anyone else a Franchise to operate, and will not itself operate, a restaurant operating under the Carbone's Pizza or Carbone's Pizzeria name, the physical premises of which are located within the area described on the Rider to this Agreement (the "Franchisee Territory"). Franchisee acknowledges that the foregoing restrictions do not prevent Franchisor or its affiliates from any activity not specifically set forth in such restrictions, including:
- (1) Franchisor and its affiliates may operate and allow others to operate similar or identical businesses within the Franchisee Territory if such businesses do not operate under the Carbone's Pizza or Carbone's Pizzeria names;
- (2) Franchisor and its affiliates may operate similar or identical business outside of the Franchisee Territory under any trademarks even if the businesses compete with the Restaurant;
- (3) Franchisor and its affiliates may operate or allow others to operate businesses inside the Franchisee Territory under any trademarks, including the Names and Marks, so long as the businesses are not competitive with the Restaurant;
- (4) Franchisor and its affiliates may sell any products it or its affiliates provide to Franchisee for use in its Restaurant to any party, whether in or outside the Franchisee Territory;
- (5) Franchisor and its affiliates may sell, or grant third parties the right to sell, goods and services that are the same as or competitive with those sold by the Restaurant under any trademarks, including the Names and Marks, through other
- distribution channels including the Internet, catalog sales, telemarketing or other direct marketing, in and outside of the Franchisee Territory;
- (6) Franchisor and its affiliates may sell frozen pizzas and other frozen items, whether under the Names and Marks or otherwise, to customers and resellers who may be located in the Franchisee Territory, including supermarkets and convenience stores; and
- (7) Franchisor and its affiliates may acquire businesses in the Franchisee Territory that are similar to the Restaurant or sell their businesses whether through a sale of assets or stock to anyone, regardless whether they operate or franchise the operation of businesses similar to the Restaurant.
- b. Franchisee may not deliver into the franchisee territory of another Carbone's Pizza franchisee, whether directly or indirectly, or via any third party.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the franchisee territory is defined by the area described on the Rider to the Franchise Agreement. During the term of the agreement, Carbones Pizzeria will not grant another franchise to operate a restaurant under the Carbone's Pizza or Carbone's Pizzeria name within the franchisee's territory, nor will Carbones Pizzeria itself operate a restaurant under those names within that territory, provided the franchisee is not in default of the agreement.
However, the agreement specifies several exceptions to this territorial exclusivity. Carbones Pizzeria and its affiliates can operate similar businesses within the franchisee's territory as long as they do not operate under the Carbone's Pizza or Carbone's Pizzeria names. They can also operate similar businesses outside the franchisee's territory under any trademarks, even if those businesses compete with the franchisee's restaurant. Additionally, Carbones Pizzeria and its affiliates can sell products they provide to the franchisee to any party, whether inside or outside the franchisee's territory, and they can sell goods and services that are the same as or competitive with those sold by the restaurant through other distribution channels, including the Internet and direct marketing.
Furthermore, Carbones Pizzeria and its affiliates can sell frozen pizzas and other frozen items to customers and resellers located within the franchisee's territory, including supermarkets and convenience stores, whether under the Carbone's Pizza or Carbone's Pizzeria names or otherwise. They can also acquire businesses in the franchisee's territory that are similar to the restaurant or sell their businesses to anyone, regardless of whether they operate or franchise similar businesses. The franchisee is prohibited from delivering into another Carbone's Pizza franchisee's territory, but they may deliver outside their territory into areas not yet franchised; however, they must cease delivery activities in any area that later becomes part of another franchise territory.
This means that while a Carbones Pizzeria franchisee is granted a specific territory, that territory is subject to numerous exceptions that could allow competition from the franchisor or other businesses. A prospective franchisee should carefully consider these exceptions and their potential impact on the profitability of their franchise. It is important to review the Rider to the Franchise Agreement to understand the specific boundaries of the territory and to discuss these exceptions with Carbones Pizzeria to fully understand the potential competitive landscape.