Are there any exceptions to the non-competition covenants for Monicals Pizza franchisees who held a franchise agreement on April 1, 2008?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
| m. Conditions for franchisor's approval of transfer | Section 18.2 and Exhibit 6 | We will consent to a transfer if: we have not exercised our right of first refusal; all obligations owed to us are paid; you and the transferee have signed a General Release; the prospective transferee meets our business and financial standards; the transferee and all persons owning any interest in the transferee sign the then current franchise agreement (any franchisee holding a franchise agreement on | | Provision | Section in Franchise or Other Agreement | Summary | |-----------------------------------------------------------------------------------------------|--------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | April 1, 2008 may on one occasion transfer that | | | | franchise agreement to a transferee who shall then | | | | be entitled to retain, for so long as that transferee | | | | holds a franchise agreement from us, the 4% royalty | | | | rate in effect on April 1, 2008. All of the other | | | | terms and provisions of the then current Franchise | | | | Agreement [as of the date of the transfer] shall be | | | | fully effective against the transferee); you provide | | | | us with a copy of all contracts and agreements | | | | related to the transfer; you or the transferee pay a | | | | transfer fee of $10,000; the transferee or the owners | | | | of transferee have agreed to be personally bound by | | | | all provisions of the Franchise Agreement; you have | | | | agreed to guarantee performance by the transferee, | | | | if requested by us; the transferee has obtained all | | | | necessary consents and approvals of third parties; | | | | the transferee or all of its equity owners have signed | | | | a Nondisclosure and Non-Competition Agreement; | | | | the transferee has agreed that its designated manager | | | | will complete the initial training program before | | | | assuming management of the franchised restaurant; | | | | and the transferee has obtained all necessary types | | | | of insurance.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 32–41)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, there is a specific exception related to the royalty rate for franchisees who held an agreement on April 1, 2008, but the document does not detail any exceptions to the non-competition covenants for these franchisees.
The FDD states that a franchisee holding a franchise agreement on April 1, 2008, may transfer that agreement one time to a transferee. This transferee would then be entitled to retain the 4% royalty rate that was in effect on April 1, 2008, for as long as they hold a franchise agreement with Monicals Pizza. However, all other terms and provisions of the then-current Franchise Agreement (as of the date of the transfer) would be fully effective against the transferee.
The FDD does not specify any exceptions to the non-competition agreements for franchisees who held a franchise agreement on April 1, 2008. A prospective franchisee should seek clarification from Monicals Pizza regarding any potential exceptions or modifications to the standard non-competition covenants, especially if they are considering acquiring an existing franchise that was in effect on that date.