What is Carbones Pizzeria prohibited from doing within the Franchisee Territory during the term of the agreement?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, Carbones Pizzeria is restricted from granting another franchise or operating a restaurant under the "Carbone's Pizza" or "Carbone's Pizzeria" name within the franchisee's designated territory during the agreement term, provided the franchisee is not in default. This restriction is designed to protect the franchisee's market area from direct competition from other Carbones Pizzeria outlets. The franchisee's territory is defined in a rider to the franchise agreement.
However, the FDD specifies several exceptions to this territorial exclusivity. Carbones Pizzeria and its affiliates retain the right to operate similar businesses within the franchisee's territory as long as they do not use the Carbones Pizza or Carbones 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. Furthermore, Carbones Pizzeria can operate businesses inside the franchisee's territory under any trademarks, including the Carbones Pizzeria names and marks, provided these businesses are not competitive with the franchisee's restaurant.
Additionally, Carbones Pizzeria and its affiliates are permitted to sell products they provide to franchisees to any party, whether inside or outside the franchisee's territory. They can also sell goods and services that compete with the franchisee's offerings under any trademarks, including the Carbones Pizzeria names and marks, through various distribution channels like the internet, catalogs, telemarketing, or direct marketing, both within and outside the franchisee's territory. Carbones Pizzeria can also sell frozen pizzas and other frozen items, under any name, to customers and resellers like supermarkets and convenience stores located within the franchisee's territory. Finally, Carbones Pizzeria and its affiliates can acquire similar businesses in the franchisee's territory or sell their businesses to anyone, regardless of whether they operate or franchise similar businesses.