What section of the Monicals Pizza Franchise Agreement addresses non-competition covenants?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
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7.4 Nondisclosure and Non-Competition Agreements with Certain Individuals
Franchisor has the right to require Franchisee and any holder of a legal or beneficial interest in Franchisee (and any member of their immediate families or households), and any officer, director, executive, manager or member of the professional staff and all employees of Franchisee to execute a nondisclosure and non-competition agreement, in a form acceptable to Franchisor and the same as or substantially similar to the Nondisclosure and Non-Competition Agreement attached as Exhibit 2 ("Nondisclosure and Non-Competition Agreement"), upon execution of this Agreement or prior to each such person's affiliation with Franchisee. Upon Franchisor's request, Franchisee shall provide Franchisor with copies of all nondisclosure and non-competition agreements signed pursuant to this Section. Such agreements shall remain on file at the offices of Franchisee and are subject to audit or review as otherwise set forth herein. Franchisor shall be a third party beneficiary with the right to enforce covenants contained in such agreements.
7.5 Reasonableness of Restrictions
Franchisee acknowledges that the restrictive covenants contained in this Section are essential elements of this Agreement and that without their inclusion, Franchisor would not have entered into this Agreement. Franchisee acknowledges that each of the terms set forth herein, including the restrictive covenants, is fair and reasonable and is reasonably required for the protection of Franchisor, the System and the Marks and Franchisee waives any right to challenge these restrictions as being overly broad, unreasonable or otherwise unenforceable.
8. TRAINING AND ASSISTANCE
8.1 Initial Training
Franchisor shall make an initial training program available to the Designated Manager and up to two (2) assistants. At least twelve (12) weeks prior to the opening of the Franchised Restaurant, the Designated Manager must attend and successfully complete, to Franchisor's satisfaction, an initial training program pertaining to the operation and administration of the Franchised Restaurant including, but not limited to, food preparation and presentation methods and techniques; sales and marketing methods; financial controls; maintenance of quality standards; customer service techniques; record keeping; and reporting procedures and other operational issues. Franchisor shall conduct the initial training program at its headquarters or at another designated location. Franchisor may, at its discretion, require additional training. Franchisor shall not charge tuition or similar fees for the initial training described above, however, all expenses incurred by Franchisee and its personnel in attending such program including, but not limited to, travel costs, room and board expenses and employees' salaries, shall be the sole responsibility of Franchisee. Franchisee shall be responsible for training its management and other employees.
8.2 Opening Assistance
In conjunction with the beginning of operation of the Franchised Restaurant, Franchisor shall make available to Franchisee, at Franchisor's expense, one (1) of Franchisor's representatives, experienced in the System, for the purpose of providing general assistance and guidance in connection with the opening of the Franchised Restaurant. If Franchisee requests additional assistance with respect to the opening or continued operation of the Franchised Restaurant, and should Franchisor deem it necessary and appropriate to comply with such request, Franchisee shall pay Franchisor's then-current standard rates, plus expenses, for such additional assistance.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 18–20)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, non-competition covenants are addressed in multiple sections of the Franchise Agreement. Specifically, Section 7.4 discusses the requirement for franchisees, their stakeholders, and employees to sign a Nondisclosure and Non-Competition Agreement, which is attached as Exhibit 2 to the Franchise Agreement. This agreement allows Monicals Pizza to enforce non-competition terms and protect its interests by ensuring that those affiliated with the franchisee do not disclose confidential information or compete unfairly.
Section 17.2 outlines the post-termination covenant not to compete, which restricts franchisees and related parties from engaging in competitive businesses for two years after the termination or expiration of the agreement. This restriction applies within a 25-mile radius of the approved Monicals Pizza location or the Area of Primary Responsibility, whichever is greater, and also within 25 miles of any other Monicals Pizza restaurant. However, franchisees holding an agreement as of April 1, 2008, who were already involved in a competitive business at that time, are permitted to continue that involvement.
Additionally, Section 7 generally addresses franchisee conduct during the term of the agreement, including prohibitions against diverting business to competitive entities or engaging in activities harmful to the goodwill of the Monicals Pizza brand. These sections collectively aim to protect Monicals Pizza's market position, trade secrets, and customer relationships by preventing franchisees and their associates from leveraging their knowledge and resources to benefit competing businesses, both during and after the franchise term.