Are Monicals Pizza franchisees required to comply with covenants not to compete after termination or non-renewal of the Franchise Agreement?

Question

Accepted Answer

| Provision                                                       | or Other Agreement            | Summary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----------------------------------------------------------------|-------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | creating a health or safety hazard to customers, employees or the public; engage in any activity reserved to us; fail to comply with laws or regulations after notice of non-compliance; on 2 or more separate occasions, breach the Franchise Agreement or fail to comply with requirements, specifications, standards or procedures on 2 or more occasions within any 12 months; or default under any other agreement between you and us (or an affiliate) such that we (or the affiliate) have the right to terminate the agreement. |
| i. Franchisee's obligations on termination/non renewal | Section 17.1 | If the Franchise Agreement is terminated or not renewed, you must: stop operating the franchised restaurant; stop using any trade secret or other confidential information, the System and the Marks; if requested, assign your interest in the franchise location to us; cancel or assign to us any assumed names; promptly return to any third party any leased, loaned or other third-party equipment used in the operation of the franchised restaurant; pay all sums owed to us (or an affiliate) including damages and costs incurred in enforcing the Franchise Agreement; surrender access to and return all paper copies of the Confidential Operations Manual, trade secrets and all other confidential information; assign your telephone and facsimile numbers and on-line identifiers to us; comply with the covenants not to compete and any other surviving provisions of the Franchise Agreement.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 32–41)

Are Monicals Pizza franchisees required to comply with covenants not to compete after termination or non-renewal of the Franchise Agreement?

Answer from 2025 FDD Document

What This Means (2025 FDD)

Provision	or Other Agreement	Summary
		creating a health or safety hazard to customers, employees or the public; engage in any activity reserved to us; fail to comply with laws or regulations after notice of non-compliance; on 2 or more separate occasions, breach the Franchise Agreement or fail to comply with requirements, specifications, standards or procedures on 2 or more occasions within any 12 months; or default under any other agreement between you and us (or an affiliate) such that we (or the affiliate) have the right to terminate the agreement.
i. Franchisee's obligations on termination/non renewal	Section 17.1	If the Franchise Agreement is terminated or not renewed, you must: stop operating the franchised restaurant; stop using any trade secret or other confidential information, the System and the Marks; if requested, assign your interest in the franchise location to us; cancel or assign to us any assumed names; promptly return to any third party any leased, loaned or other third-party equipment used in the operation of the franchised restaurant; pay all sums owed to us (or an affiliate) including damages and costs incurred in enforcing the Franchise Agreement; surrender access to and return all paper copies of the Confidential Operations Manual, trade secrets and all other confidential information; assign your telephone and facsimile numbers and on-line identifiers to us; comply with the covenants not to compete and any other surviving provisions of the Franchise Agreement.