For how long after termination or expiration of the Carbones Pizzeria franchise is the franchisee restricted from involvement in a competing business?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary | |
|---|---|---|---|
| Franchise Agreement | new initial franchise fee). (See also “Noncompetition covenants after the franchise is terminated or expires” below.) | ||
| n. Franchisor’s right of first | Section 13(a) | We can match any offer for your business | |
| refusal to acquire franchisee’s business | |||
| o. Franchisor’s option to purchase franchisee’s business | Section 16 | We have right to purchase your inventory and merchandise bearing the Marks upon termination or expiration without renewal of yourfranchise. | |
| p. Death or disability of franchisee | Section 14 | Your heirs can assume your rights, but if they do, they must meet the transfer requirements. | |
| q. Non-competition covenants during the term of the franchise | Section 4 | No involvement in competing business anywhere during the term of the Franchise Agreement or in any business or venture that is granting franchises or licenses for the operation of a competing business. A competing business an eat-in, or take-out, or combination eat-in/take out restaurant of other facility which serves pizza. | |
| r. Non-competition covenants after the franchise is terminated or expires | Section 4 | No involvement in any competing business for 2 years in the Franchisee Territory, within a radius of 25 miles from the Franchisee Territory or a radius of 5 miles from any other restaurant or other facility operated under the Marks. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 24–26)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, franchisees are subject to non-competition covenants after the franchise is terminated or expires. Specifically, a franchisee cannot be involved in any competing business for 2 years. This restriction applies within the Franchisee Territory, within a 25-mile radius from the Franchisee Territory, or within a 5-mile radius from any other restaurant or facility operated under the Carbones Pizzeria Marks. These restrictions also apply to any business or venture that grants franchises or licenses for operating a competing business.
This means that upon termination or expiration of the franchise agreement, a former Carbones Pizzeria franchisee is significantly limited in their ability to operate or be involved with a competing pizza business. The restrictions cover not only direct competition through a restaurant but also indirect competition through franchising or licensing a competing concept. The geographic scope includes the franchisee's original territory and extends a considerable distance beyond it, potentially impacting future business opportunities.
Such non-compete clauses are common in franchising to protect the brand and market share of the franchisor. However, the specific terms can vary widely. Prospective Carbones Pizzeria franchisees should carefully consider the implications of these restrictions, especially if they plan to remain in the restaurant industry after their franchise agreement ends. They should evaluate whether the geographic and temporal scope of the non-compete is reasonable and whether it unduly restricts their future business opportunities. It is advisable to seek legal counsel to fully understand the enforceability and potential impact of these covenants.