Can Learningrx adjust the boundaries of a franchisee's Territory?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
chise Agreement (Franchise Agreement, Section 5). The table of contents is attached as Exhibit F.
ITEM 12 TERRITORY
We will grant to you a territory ("Territory") defined by population size. A Micro Franchise has a population of less than 100,000; and a Standard Franchise has a population of 100,000 to 200,000 people, as determined by us. Your Territory may be delineated by boundary streets, highways, counties, or zip codes. We will not operate through our current trademarks, any permanent LearningRx Centers or grant franchises for a similar or competitive business within your Territory as long as you meet minimum revenue requirements, but we have the right to do so anywhere outside your Territory at any time. You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. You may also have preexisting PACE Licensees and Clinical Licensees offering educational services under different trademarks and trade names operating in your Territory. You will operate from 1 location approved by us and must receive our permission before relocating. We will grant approval to relocate if you are in compliance with the Franchise Agreement, you have paid all money owed to us and/or our affiliates, and the proposed location meets our site selection criteria as specified in the Operations Manual. Once established and unless otherwise agreed, the boundaries of your Territory will not be adjusted without our prior written consent regardless of whether the population of your Territory increases or decreases over time.
If you request to relocate your Center, this will be subject to our approval, which we have the right to grant or deny for any reason or no reason. Any relocation will be subject to the site selection and lease provisions contained in the Franchise Agreement and Operations Manual. You will not be required to pay us a relocation fee ("Relocation Fee") for the first request to relocate your Center within the Initial Term of the Franchise Agreement or any Successor Term. You will be required to pay us a Relocation Fee of $250 if you request to relocate your Center a second time within the Initial Term of the Franchise Agreement or any Successor Term. You will be required to pay us a Relocation Fee of $500 if you request to relocate your Center a third time within the Initial Term of the Franchise Agreement or any Successor Term. Any relocation of your Center will be at your sole expense. Our approval will, among other things, be based on the following factors: population density, income levels, general location guidelines, proximity of the proposed site to other LearningRx Centers, and the time it will take to relocate your Center.
Your Territory does not extend to, and you may not advertise independently on, the Internet or World Wide Web. We will maintain LearningRx Center Web pages, which will include information regarding your Center.
If we engage in electronic commerce through the Internet or other computer network site or sell through any other alternative distribution channel, and we receive orders for any System products or services calling for delivery or performance in your Territory, then we will offer the order to you at the price we establish. If you choose not to fulfill the order or are unable to do so, then we, one of your affiliates or a third-party we designate (including another franchisee) may fulfill the order, and you will be entitled to no compensation in connection with this.
We and our affiliates reserve the right to use alternative channels of distribution to make sales within your Territory of products or services under trademarks different from the Trademarks you will use under the Franchise Agreement. We and our affiliates reserve the right to use alternative channels of distribution to make sales within your Territory of products or services under our principal trademarks that you will use under the Franchise Agreement.
Source: Item 12 — TERRITORY (FDD pages 33–35)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, the boundaries of a franchisee's territory, once established, will generally not be adjusted without Learningrx's prior written consent. This applies regardless of whether the population within the territory increases or decreases over time. However, Learningrx retains certain rights that could impact a franchisee's territory.
Specifically, if a franchisee fails to meet the Minimum Revenue Quota, Learningrx has the right to reduce the franchisee's territory. The Minimum Revenue Quota is initially $50,000.00 for every 100,000 people in the territory for the first 12 months, increasing to $75,000.00 for the second 12 months, and then to $100,000.00 for each subsequent 12-month period. Failure to meet this quota can lead to a loss of territory exclusivity, potentially allowing Learningrx to offer a Learningrx Center location to another franchisee within the original territory.
Learningrx also reserves the right to use alternative channels of distribution, such as the Internet, catalog sales, and telemarketing, to make sales within a franchisee's territory. They are not required to compensate the franchisee for sales solicited or conducted within the territory through these alternative channels. Additionally, Learningrx can permit pre-existing PACE Licensees and Clinical Licensees to continue operating within a franchisee's territory, even if their zip codes are included in the territory.
These provisions highlight the importance of meeting the Minimum Revenue Quota and understanding the potential impact of Learningrx's reserved rights on a franchisee's territory. While the territory boundaries are generally fixed, failure to meet revenue targets or the exercise of Learningrx's reserved rights could effectively reduce the franchisee's market area or increase competition within it. Prospective franchisees should carefully consider these factors and discuss them with Learningrx before investing in a franchise.