After termination of the Monicals Pizza franchise agreement, what geographic area is covered by the non-compete clause?
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, after the termination or expiration of the franchise agreement, a franchisee is subject to a non-compete clause that restricts their involvement with any Competitive Business. This restriction applies for a period of two years, regardless of the reason for termination.
The geographic scope of this non-compete includes two possibilities: (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. However, franchisees holding a franchise agreement on April 1, 2008, who owned an interest in, managed, operated, or performed services for a Competitive Business as of April 1, 2008, are permitted to continue those activities for those specific businesses only.
This means a former Monicals Pizza franchisee could be barred from operating a competing pizza business within 25 miles of their former location, or within their Area of Primary Responsibility if that area extends beyond the 25-mile radius. They are also restricted from involvement with a competing business within 25 miles of any other Monicals Pizza restaurant. This is a fairly standard non-compete clause in franchising, designed to protect the brand and market share of Monicals Pizza. Prospective franchisees should carefully consider these restrictions and how they might impact their future business opportunities should they decide to leave the Monicals Pizza system.