Is there a geographic limit to the non-compete clause if the Cicis agreement is executed pursuant to a development agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) interfere with our relationships with any supplier to Cicis Restaurants or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; and
- (2) for a continuous uninterrupted period commencing upon the expiration or termination of, or a Transfer (defined below) described in, this Agreement and continuing for two (2) years thereafter, except as we otherwise approve in writing, neither you nor any of your Owners and Operator (and members of their immediate family) will, directly or indirectly, for yourselves, or through, on behalf of, or in conjunction with any other Person, by direct inducement or otherwise, engage in any activities described in Section 9.C(1) above in respect of any Competing Business:
- (a) at the Location; or
- (b) within the Protected Area; or
- (c) if this Agreement is executed pursuant to a development agreement, within the development area described therein; or
- (d) within a 10-mile radius of (i) the Location, (ii) the Protected Area, (iii) the development area, if applicable, or (iv) any Cicis Restaurant or other Cicis-branded food service facility in existence or under construction as of the date of this Agreement or at the commencement of the obligation described in this Section 9.C(2).
If any person restricted by this Section 9C(2) fails to comply with the foregoing obligations as of the date of expiration, termination, or Transfer, the 2-year restricted period for that person will commence on the date the person begins to comply 9C(2), which may be the date a court order is entered enforcing this provision.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISED BUSINESS (FDD pages 43–44)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if the Franchise Agreement is executed pursuant to a development agreement, there are geographic limitations to the non-compete clause. Specifically, for two years after the termination, expiration, or transfer of the agreement, the franchisee and their owners cannot engage in a Competing Business. A Competing Business is defined as a business deriving more than 50% of its revenue from pizza sales using authorized distribution methods.
The geographic limitations include the location of the Cicis Restaurant, the Protected Area, and the development area described in the development agreement. Additionally, the non-compete extends to a 10-mile radius of the location, the Protected Area, the development area (if applicable), or any Cicis Restaurant or Cicis-branded food service facility existing or under construction at the time of the agreement or the start of the non-compete obligation.
This means that a franchisee operating under a development agreement is restricted from operating a competing pizza business within these defined areas for two years after leaving the Cicis system. The restrictions apply not only to the franchisee but also to their owners, operators, and immediate family members. The start date of the two-year restricted period may be delayed if the person restricted fails to comply with their obligations; in that case, the period commences when compliance begins, potentially by court order.