After termination of the Carbones Pizzeria franchise agreement, can a Carbones Pizzeria franchisee consult with 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, a franchisee is restricted from consulting with a competing business within a specific area for a defined period after the franchise agreement ends. Specifically, for two years following the termination or assignment of the agreement, the franchisee cannot, either directly or indirectly, consult with any Competing Business located or doing business in the Restricted Area, unless it's a business operated under a valid franchise agreement with Carbones Pizzeria. A "Competing Business" is defined as any 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 prevents a former Carbones Pizzeria franchisee from leveraging the franchisor's training, assistance, and trade secrets to benefit a competing pizza business within the defined area. The restriction extends not only to owning or operating a competing business but also to providing consulting services, which could involve sharing knowledge gained during the franchise term.
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 violation effectively pauses the clock on the non-compete period, ensuring Carbones Pizzeria is protected from unfair competition even if a franchisee attempts to circumvent the agreement. This clause aims to protect Carbones Pizzeria's market position and proprietary information by preventing former franchisees from immediately applying their gained expertise to competing ventures in the same geographic area.