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NAPLES — Competition for hot, deep-dish pizza is getting hotter and deeper than ever imagined for the owners of one Naples restaurant.
A federal lawsuit filed by Chicago-based Aurelio's Is Pizza petitions a judge to enforce a non-compete agreement that would prevent its former longtime franchisee in Naples from directly or indirectly operating a pizzeria for two years within five miles of its former downtown location.
"We are in a troubled spot here," said Naples restaurateur Nancy Stewart. "They have decided to pull all their guns out on us."
A few weeks ago, former Aurelio's franchisees John and Nancy Stewart opened Sweet Home Chicago Pub & Grub in the same Naples space, 590 Ninth St. N., where they operated an Aurelio's location for 15 years. The Stewarts cut ties with the chain five days earlier to open their own local venue that also specializes in Chicago cuisine.
The bulk of the legal action against them centers on the non-compete clause contained in five-year franchise agreements they originally signed June 19, 1997, and renewed in 2002 and 2007, with Aurelio's Is Pizza Franchise Inc.
A non-compete clause is a term used in contract law when one party agrees not to pursue a similar profession or trade in competition against another party upon termination.
"I can tell you with absolute certainty that there was a non-compete in each and every contract they signed over the years," said Kirk Mauriello, director of franchising for Aurelio's Pizza.
Attorneys for Sweet Home Chicago in Naples and Chicago were unavailable for comment Thursday.
Aurelio's filed suit in the U.S. District Court for the Northern District of Illinois on June 20, the day after the Chicago company ended its longtime relationship with the Stewarts, doing business as JNJC-Food Inc. A preliminary injunction hearing scheduled for Thursday morning was postponed after both the plaintiff and defendant filed a joint motion, claiming they reached a settlement in principle and requested time to formalize the agreement in writing, according to court documents. Details of the settlement have not been made public.
If Aurelio's is successful in its bid to enforce the five-mile non-compete, a look at a local map shows that the nearest to Naples the Stewarts could operate a pizzeria would be north of Pine Ridge Road in North Naples, east of Santa Barbara Boulevard in Golden Gate and south of Rattlesnake Hammock Road in East Naples. Regardless of the suit's outcome, the chain plans to contract with another franchisee to open a new Aurelio's pizzeria in Naples this fall and the Stewarts may never again use Aurelio's proprietary recipes.
"Attorneys for parties have been talking and we've made a lot of progress in settlement that can be agreed upon by both parties," said Ian H. Fisher, one of the attorneys for Aurelio's Is Pizza Franchise Ltd. "As of today, we are in that place where we are working together and making progress, but we are not there yet."
Because of professional courtesy, Fisher did not want to reveal or comment on settlement particulars, but he thinks both parties can find middle ground before next week's court hearing.
"I remain hopeful that the parties can reach an agreement before then," he said. "It's our hope that we will be able to work something out in final form before the 19th."
When Sweet Home Chicago Pub & Grub opened June 23, two pages of pizza selections, both Chicago thin crust and deep-dish options, made up nearly half of the restaurant's menu. Since then, the menu has been scaled back a bit, but the local restaurant continues to serve pizza.
Many Aurelio's menu items are served by Sweet Home Chicago, but under a different name. For instance, the Aurelio's appetizer Bosco Sticks are listed as "breadsticks with cheese" on the new pub's menu, Mama Aurelio's Calabrese is simply calzone, and Aurelio's Citrus Salad is now Orange Raspberry Walnut Salad, but both list the same ingredients.
Until the new Naples location opens, holders of Aurelio's gift cards may still use them at the chain's other 42 locations, including the Aurelio's at Gulf Coast Town Center in San Carlos Park, the only other location in Florida.