After termination of the Carbones Pizzeria agreement, for how long is the franchisee restricted from operating a Competing Business in the Restricted Area?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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. For the
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, a franchisee is restricted from operating a Competing Business in the Restricted Area for two years following the termination or assignment of the Franchise Agreement. This restriction means that for a period of two years after the agreement ends, the franchisee cannot directly or indirectly own, manage, be employed by, lease space to, lend money to, or consult with any Competing Business within the Restricted Area, unless it's another Carbones Pizzeria franchise. A Competing Business is defined as an eat-in, take-out, or combination restaurant that serves pizza. The Restricted Area includes the Franchisee Territory, a 25-mile radius from the Franchisee Territory, and a 5-mile radius from any other restaurant operating under the Carbones Pizzeria name.
This non-compete clause is designed to protect Carbones Pizzeria's interests by preventing franchisees from using the franchisor's training, assistance, and trade secrets to unfairly compete with the brand after leaving the system. If a franchisee violates this non-compete agreement, the period of restriction will be extended to two years after the franchisee ceases the breach.
For a prospective Carbones Pizzeria franchisee, this means carefully considering the implications of the non-compete agreement. It is important to understand the geographic scope of the Restricted Area and the types of businesses considered to be a Competing Business. Franchisees should be aware that violating this clause could result in legal action and an extension of the non-compete period, potentially limiting their business opportunities for an extended time after leaving the Carbones Pizzeria system.