Is the Carbones Pizzeria franchisor restricted from selling their business to a competitor of the franchisee?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, Carbones Pizzeria and its affiliates have the right to sell their businesses to anyone, including those who operate or franchise similar businesses to Carbones Pizzeria. This sale can occur through the transfer of assets or stock. This clause applies regardless of whether these potential buyers operate or franchise businesses similar to Carbones Pizzeria. This provision is applicable within the franchisee's territory.
This means that a new Carbones Pizzeria franchisee could find themselves competing with a new owner of the Carbones Pizzeria franchise system who also owns a competing pizza business. This could impact the franchisee's market share and profitability.
Prospective franchisees should consider the implications of this clause, especially if they are concerned about potential competition from the franchisor or its affiliates. It would be prudent to discuss this with Carbones Pizzeria during the due diligence process to understand their long-term plans and potential impact on franchisees.