Can the non-compete restrictions be waived for a Monicals Pizza franchisee, and if so, under what condition?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.2.2 Except as otherwise approved in writing by Franchisor, neither Franchisee, nor any holder of a legal or beneficial interest in Franchisee, nor any officer, director, executive, manager or member of the professional staff of Franchisee, shall, for a period of two (2) years after the expiration or
termination of this Agreement, regardless of the cause of termination, either 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:
17.2.2.1 own an interest in, manage, operate or provide services to any Competitive Business, whether directly or indirectly, located or operating (a) within a twenty-five (25) mile radius of the Approved Location or within the Area of Primary Responsibility (whichever is greater), or (b) within a twenty-five (25) mile radius of the location of any other Monical's Restaurant, either owned by or affiliated with Monical Pizza Corporation in existence at the time of termination or expiration (franchisees holding a franchise agreement on April 1, 2008 who own an interest in, manage, operate, or perform services for a Competitive Business as of April 1, 2008 shall be permitted to continue to own an interest in, manage, operate, or perform services for that/those specific Competitive Business(es) only); or
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 restrictions can be waived under specific conditions. The document states that, except if approved in writing by Monicals Pizza, franchisees are subject to a two-year post-termination covenant not to compete. This prevents them (or anyone with an interest in the franchise) from owning, managing, operating, or providing services to a Competitive Business within a 25-mile radius of the Approved Location or any other Monicals Pizza Restaurant.
However, there's an exception for franchisees who held a franchise agreement on April 1, 2008, and were already involved in a Competitive Business as of that date. These franchisees are permitted to continue their involvement with those specific Competitive Businesses. This indicates that Monicals Pizza may consider waivers based on pre-existing business interests, but any such waiver must be explicitly approved in writing by Monicals Pizza.
In practical terms, a prospective Monicals Pizza franchisee should understand that the non-compete is generally enforced unless they obtain written approval from Monicals Pizza to engage in a Competitive Business. This is a critical point to clarify during due diligence, especially if the franchisee has any existing or planned business ventures that could be considered competitive. The written approval requirement places the onus on the franchisee to proactively seek and secure this waiver from Monicals Pizza, highlighting the importance of clear communication and documentation.
It is also important to note that Monicals Pizza retains the right to require franchisees, stakeholders, and employees to sign non-disclosure and non-competition agreements. These agreements are in a form acceptable to Monicals Pizza and reinforce the franchisor's ability to protect its interests. Franchisees should carefully review these agreements and understand their implications before signing.