Is Monicals Pizza permitted to acquire businesses identical or similar to Monical's Restaurants, including those within the Development Territory?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
| Franchisor hereby grants to Developer, and Developer undertakes and accepts, upon the terms and |
|---|
| conditions of this Development Agreement, the Development Rights to establish and operate not less than |
| () Monical's Restaurants at sites located within a defined geographic area ("Development |
| Territory"). The Development Territory shall be defined by and exist within the following zip codes or other physical, |
| political or natural boundaries: |
2.2 Retained Rights
Franchisor shall not, so long as this Development Agreement is in force and effect and Developer is not in default under any of the terms hereof or of any Franchise Agreement for any Monical's Restaurant, establish, own or operate, or license others to establish, own or operate, any Monical's Restaurant within the Development Territory other than to Developer pursuant to this Development Agreement; provided, however, Franchisor and its Affiliates retain the right:
- 2.2.1 to continue to own and operate, and allow others to continue to own and operate, Monical's Restaurants existing inside of the Development Territory as of the date of this Development Agreement;
- 2.2.2 to establish, or grant to others the right to establish, Monical's Restaurants outside of the Development Territory;
- 2.2.3 to establish and operate, and license others to establish and operate, businesses under other systems using other proprietary marks, both within and outside the Development Territory;
- 2.2.4 to purchase or otherwise acquire the assets or controlling ownership of one (1) or more businesses identical or similar to Monical's Restaurants (and/or acquire franchise, license and/or similar agreements for such businesses), some or all of which may be located anywhere, including within the Development Territory.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to the 2025 FDD, Monicals Pizza retains the right to purchase or acquire assets or controlling ownership of businesses identical or similar to Monical's Restaurants. These businesses can be located anywhere, including within the Development Territory. This includes acquiring franchise, license, and similar agreements for such businesses.
If Monicals Pizza acquires franchises or licenses, it has the discretion to act as the franchisor or licensor with respect to the franchisees or licensees, no matter where they are located. This would be done according to the individual franchise or license agreements between Monicals Pizza and the franchisees or licensees.
For businesses within the Development Territory that are not already franchised or licensed, Monicals Pizza has the option to offer to sell these businesses to the Developer (the franchisee) or to a third party at fair market value, so they can be operated as a Monical's Restaurant. Alternatively, Monicals Pizza can offer the Developer the opportunity to operate the business in partnership with Monicals Pizza (or an affiliate) under the existing trade name or a different trade name. This clause protects the franchisor's ability to grow through acquisition, even within a franchisee's territory, while also giving the franchisee some potential options.