Under what conditions can the post-termination non-compete restrictions be waived by Monicals Pizza?
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 the 2025 Monicals Pizza Franchise Disclosure Document, the post-termination covenant not to compete can be waived if approved in writing by Monicals Pizza. Specifically, neither the franchisee, any holder of a legal or beneficial interest in the franchisee, nor any officer, director, executive, manager, or member of the professional staff of the franchisee can engage in a Competitive Business within a 25-mile radius of the Approved Location or any other Monicals Pizza Restaurant for two years after the termination or expiration of the agreement, unless Monicals Pizza provides written approval.
This waiver provision offers a potential avenue for franchisees to pursue other business ventures, even those that might be considered competitive, provided they obtain explicit written consent from Monicals Pizza. This could be particularly relevant if a franchisee wishes to remain in the same geographic area after the franchise agreement ends. Without this written approval, the franchisee is strictly bound by the non-compete terms, regardless of the reason for termination.
It is important to note that securing a waiver is not guaranteed and would likely depend on various factors, such as the specific nature of the proposed business, its potential impact on Monicals Pizza, and the franchisee's relationship with the company. Prospective franchisees should carefully consider the implications of the non-compete agreement and the process for seeking a waiver as part of their due diligence.