Is a business operated by the franchisee under a Franchise Agreement with Monicals Pizza considered a 'Competitive Business' according to the Nondisclosure and Non-Competition Agreement?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
"Competitive Business" means any business, whether direct or indirect, that offers (or grants franchises or licenses to others to operate a business that offers) menu items the same as or similar to those provided by Monical's Restaurants or in which Trade Secrets or other Confidential Information could be used to the disadvantage of Franchisor, any Affiliate or its other franchisees; provided, however, that the term "Competitive Business" shall not apply to (a) any business operated by Franchisee under a Franchise Agreement with Franchisor, (b) any business operated by a publicly-held entity in which Franchisee owns less than a five percent (5%) legal or beneficial interest, or (c) any business such as supermarkets, grocery stores, convenience stores or other retail stores, the primary business of which is not a restaurant;
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, a business operated by a franchisee under a Franchise Agreement with Monicals Pizza is explicitly excluded from being considered a 'Competitive Business'. The FDD defines 'Competitive Business' as any business that offers menu items similar to those of Monicals Restaurants or could use Trade Secrets to the disadvantage of Monicals Pizza or its franchisees.
However, this definition has some exceptions. Specifically, the term 'Competitive Business' does not apply to any business operated by the franchisee under a Franchise Agreement with Monicals Pizza. This means that franchisees are generally not restricted from operating another Monicals Pizza franchise.
This exclusion provides clarity for franchisees who may wish to expand their business within the Monicals Pizza system. It confirms that operating multiple Monicals Pizza locations does not violate the non-compete terms outlined in the Nondisclosure and Non-Competition Agreement. However, it is important to note that this exception only applies to businesses operated under a franchise agreement with Monicals Pizza; any other business ventures would still be subject to the non-compete restrictions.