Can Learningrx or its affiliates operate another center within a franchisee's territory?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
ant to this Agreement.
4. TERRITORY
- 4.1 Location. Franchisee may operate the franchised Business only at the Premises as designated in Attachment I to this Agreement. Franchisee may not relocate the Premises without Franchisor's prior written approval, which may be withheld for any reason. Franchisee must maintain a physical location for the Center at all times.
- 4.2 Territory. During the term of this Agreement and any extensions, neither Franchisor nor its affiliates will own, operate or franchise a fixed location for the operation of any other Center within your Territory as designated in Attachment I to this Agreement. Franchisee will also have the right to service any persons in the Territory, regardless of the method of sales, subject to Franchisor's express reservation of rights set forth in Section 4.5. Once established, the boundaries of Franchisee's Territory will not be adjusted by Franchisee without Franchisor's written consent regardless of whether the population of Franchisee's Territory increases or decreases over time. Notwithstanding the foregoing, Franchisee acknowledges that prior to the term of this Agreement, Franchisor or its affiliate may have licensed to a third-party the right to use the System and/or Marks to operate a business that may be similar to the LearningRx Center operated by Franchisee under this Agreement pursuant to a PACE license or a Clinical license in a portion of Franchisee's Territory. The pre-existing PACE licensee and/or Clinical licensee has the right to continue to operate the business per the PACE license and/or Clinical license in the portion of Franchisee's Territory and such ongoing use will not constitute a breach of this Agreement, including this Section 4.02 or an Area Developer Agreement, if any.
- 4.3 Soliciting Outside the Territory. Subject to the requirements of Sections 9.1 and 9.2, Franchisee may not, without the express written permission of Franchisor, place advertising targeted primarily to another territory unless the advertising is done as part of a cooperative effort with the Franchisee in the targeted territory
- 4.4 Minimum Annual Revenue Quota. In order to maintain the Territory, Franchisee must maintain a Minimum Annual Revenue Quota ("Minimum Annual Revenue Quota"), starting six (6) months after opening in the amount of Fifty thousand and 00/100 Dollars ($50,000.00) for every one hundred, thousand (100,000) people (or pro-rated portion of one hundred, thousand (100,000)) in the Territory for the first twelve (12) months, Seventy-Five thousand and 00/100 Dollars ($75,000.00) for every one hundred, thousand (100,000) people (or pro-rated portion of one hundred, thousand (100,000)) in the Territory for the second (2nd) twelve (12) months and One hundred, thousand and 00/100 Dollars ($100,000.00) for every one hundred, thousand (100,000) people (or pro-rated portion of one hundred, thousand (100,000)) in the Territory for any twelve (12) month period thereafter in the Territory. Franchisee's failure to maintain the Minimum Annual Revenue Quota may result in loss of exclusivity for
the territory or the reduction or elimination of the Franchisee's Territory, or the termination of this Agreement, in Franchisor's sole discretion.
- 4.5 Reservation of Rights. Franchisee acknowledges that the Franchise granted hereunder is non-exclusive and that Franchisor and its Affiliates retain the exclusive right, among others:
- (a) to own, use, operate and to license and Franchise others to use, the Marks and System for the operation of LearningRx Centers at any location other than in the Territory, regardless of proximity to the Territory;
- (b) to use and Franchise the use of trademarks or service marks other than the Marks, whether in alternative channels of distribution or at any location including the Territory, except for products provided "trainer to student," in association with operations that are similar to or different than the LearningRx Center;
- (c) to offer the services or products, or grant others the right to offer the services or products, whether using the Marks or other trademarks or service marks, except products provided "trainer to student", through alternative channels of distribution, including without limitation, retail locations and other channels of distribution (other than LearningRx Centers) such as stores, shops, kiosks, malls, airports, and college campuses, at special events and other channels of distribution such as television, mail order, catalog sales, wholesale to unrelated retail outlets, or over the Internet, whether inside or outside the Territory;
- (d) to any websites utilizing a domain name incorporating the word "LEARNING" or "RX" or similar derivatives thereof. Franchisor retains the sole right to market on the Internet and use the Marks on the Internet, including all use of websites, social networking sites, domain names, URL's, directory addresses, metatags, linking, advertising, and co-branding and other arrangements.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, Learningrx and its affiliates are generally restricted from operating or franchising a fixed location for another Learningrx center within a franchisee's designated territory during the term of the agreement. However, this is subject to certain pre-existing agreements. Specifically, if Learningrx or its affiliate had previously licensed a third party to operate a business similar to a Learningrx Center under a PACE or Clinical license within the franchisee's territory before the current agreement, that pre-existing licensee can continue to operate without it being considered a breach of the agreement.
Learningrx also retains several rights that could impact a franchisee's territory. Learningrx can use and franchise others to use trademarks or service marks other than the Learningrx marks, even for operations similar to Learningrx Centers, within the franchisee's territory, except for products provided "trainer to student." They can also offer services or products through alternative channels of distribution, such as retail locations, the internet, or other methods, inside or outside the territory. Additionally, Learningrx can acquire businesses similar to Learningrx Centers and operate them, regardless of their location, including within a franchisee's territory.
Furthermore, the franchise granted to a Learningrx franchisee is non-exclusive, and Learningrx and its affiliates retain the right to operate Learningrx Centers at any location outside the franchisee's territory, regardless of proximity. Franchisees must also meet a Minimum Annual Revenue Quota to maintain their territory. This quota starts six months after opening and is based on the population of the territory, with specific dollar amounts required per 100,000 people in the territory, increasing over the first two years of operation. Failure to meet this quota may result in loss of exclusivity, reduction of the territory, or termination of the agreement.
Learningrx may also establish satellite locations. The franchisee will not receive an exclusive or protected territory for its Satellite Location, and Learningrx reserves the right to grant a territory to another franchisee which includes the Site at any time. Franchisor and its Affiliates may own or operate, or license or franchise others to own or operate a LearningRx Training Center in any location, even if that location creates a territory which encompasses Franchisee's Site.