Does the covenant not to compete for Monicals Pizza apply both during the term and after the termination of the Development Agreement?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
- a) During the term of Recipient's relationship with Franchisee and for a period of two (2) years after the expiration or termination of Recipient's relationship with Franchisee, regardless of the cause of expiration or termination, Recipient shall not, directly or indirectly, for themselves or through, on behalf of or in conjunction with, any person, persons, partnership, corporation, limited liability company or other business entity, divert or attempt to divert any business or customer of Franchisee to any Competitive Business, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Company's service mark "Monical's Pizza®" and such other trade names, trademarks, service marks, trade dress, designs, graphics, logos, emblems, insignia, fascia, slogans, drawings and other commercial symbols as the Company designates to be used in connection with Monical's Pizza Restaurants or the Company's uniform standards, methods, procedures and specifications for the establishment and operation of Monical's Pizza Restaurants.
- b) During the term of Individual's relationship with Franchisee, Individual shall not, directly or indirectly, for themselves or through, on behalf of or in conjunction with, any person, persons, partnership, corporation, limited liability company or other business entity, carry on, be engaged in or take part in, render services to, or own or share in the earnings of any Competitive Business anywhere within the United States without the express written consent of Franchisee.
- c) For a two (2) year period following the term of Individual's relationship with Franchisee, regardless of the cause of termination, Individual shall not, directly or indirectly, for themselves or through, on behalf of or in conjunction with, any person, persons, partnership, corporation, limited liability company or other business entity, carry on, be engaged in or take part in, render services to, or own or share in the earnings of any Competitive Business within a twenty-five (25) mile radius of Franchisee's Franchised Restaurant or within Franchisee's Area of Primary Responsibility, whichever is greater, or within twenty-five (25) miles of any other Monical's Pizza Restaurant without the express written consent of Franchisee. For purposes of this Agreement, Franchisee's "Area of Primary Responsibility" is defined as:
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the non-compete agreement applies both during the term of the relationship and for a period after termination. Specifically, during the term of the relationship with the franchisee, the individual is prohibited from engaging in or providing services to any competitive business anywhere in the United States without written consent from the franchisee.
Following the termination of the relationship, regardless of the reason for termination, the individual is restricted for two years. During this time, they cannot engage in any competitive business within a 25-mile radius of the Monicals Pizza restaurant or the franchisee's Area of Primary Responsibility, whichever is greater. This restriction also applies within 25 miles of any other Monicals Pizza restaurant, unless written consent is provided by the franchisee.
These restrictions are designed to protect Monicals Pizza's trade secrets, confidential information, and customer relationships. The document states that violating these covenants would cause immediate and irreparable harm to Monicals Pizza, entitling them to injunctive relief. Prospective franchisees should carefully consider these non-compete terms and their potential impact on future business opportunities before entering into a franchise agreement.