Is there a distance restriction from other Monicals Pizza restaurants that applies to the non-compete agreement?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
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 post-termination non-compete agreement includes distance restrictions from other Monicals Pizza restaurants. Specifically, for a period of two years after the termination or expiration of the franchise agreement, the franchisee is restricted from owning, managing, operating, or providing services to a Competitive Business within a twenty-five (25) mile radius of the Approved Location or within the Area of Primary Responsibility, whichever is greater.
Additionally, the franchisee is also restricted from engaging in a Competitive Business within a twenty-five (25) mile radius of any other Monicals Restaurant, whether owned by or affiliated with Monical Pizza Corporation, that exists at the time of termination or expiration. However, there is an exception for franchisees holding a franchise agreement on 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 their involvement with those specific Competitive Businesses.
These restrictions aim to protect Monicals Pizza's trade secrets, confidential information, and investment in training franchisees. A prospective franchisee should carefully consider these limitations, as they could impact their ability to engage in similar business ventures after leaving the Monicals Pizza system. It is important to fully understand the definitions of "Competitive Business", "Area of Primary Responsibility" and "Approved Location" as defined in the FDD to assess the practical implications of these restrictions.