After termination or assignment of the Carbones Pizzeria agreement, can a franchisee be employed by a business that is granting franchises for the operation of a Competing Business in the Restricted Area?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
ee may deliver outside of its Franchisee Territory into areas that are not in a franchisee territory of another Carbone's Pizza franchisee, but if Franchisor grants a franchise territory which includes any such area, Franchisee shall immediately cease delivery activities in such area. e
4. Covenant Not to Compete; Covenant as to Trade Secrets.
- 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.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, for two years following the termination or assignment of the franchise agreement, a franchisee cannot be employed by a business that is granting franchises for the operation of a Competing Business in the Restricted Area. 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 Carbone's Pizzeria name.
This restriction prevents a former Carbones Pizzeria franchisee from using the franchisor's training, assistance, and trade secrets to benefit a competing pizza franchise within a defined geographic area. The non-compete extends not only to owning or operating a competing business but also to being employed by or consulting with one, ensuring a complete separation. This clause aims to protect Carbones Pizzeria's market share and proprietary information.
If a franchisee violates this non-compete agreement, the period during which they are required to abide by the obligation will be extended to two years after they are no longer in breach. This means that any involvement with a competing business, even if brief, can prolong the duration of the non-compete restriction. This provision serves as a strong deterrent against violating the terms of the agreement.
Prospective franchisees should carefully consider the implications of this non-compete clause, especially if they anticipate wanting to work in the pizza industry after leaving the Carbones Pizzeria system. Understanding the definition of "Competing Business" and "Restricted Area" is crucial for making informed decisions about future career options. Franchisees should seek legal counsel to fully understand the scope and enforceability of this clause in their specific jurisdiction.