Who is subject to the restrictive covenants after the expiration or termination of a Monicals Pizza franchise agreement?
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
17.2.2.2 solicit or otherwise attempt to induce or influence any customer, employee or other business associate of Franchisor to terminate or modify his, her or its business relationship with Franchisor or any Monical's Restaurant, or to compete against Franchisor or any Monical's Restaurant.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, several parties are subject to restrictive covenants following the expiration or termination of a franchise agreement. These include the franchisee, any holder of a legal or beneficial interest in the franchisee, and any officer, director, executive, manager, or member of the professional staff of the franchisee. These individuals and entities are restricted from engaging in certain activities that could harm Monicals Pizza's business interests.
The restrictive covenants primarily involve non-competition and non-solicitation. Specifically, those bound by the covenants are prohibited from owning an interest in, managing, operating, or providing services to any Competitive Business within a specified radius. This radius is either twenty-five miles from the Approved Location or within the Area of Primary Responsibility, whichever is greater, or within twenty-five miles of any other Monicals Pizza Restaurant. Additionally, they are barred from soliciting or attempting to influence any customer, employee, or business associate of Monicals Pizza to terminate or modify their relationship with the company or any of its restaurants.
These restrictions are in place for a period of two years after the expiration or termination of the franchise agreement, regardless of the cause of termination. However, there is an exception for franchisees holding an agreement as of April 1, 2008, who, as of that date, owned an interest in, managed, operated, or performed services for a Competitive Business. These franchisees are permitted to continue those specific activities. The FDD emphasizes that these restrictive covenants are considered fair and reasonable to protect Monicals Pizza's trade secrets, confidential information, and investment in franchisee training.