Does Learningrx or its affiliates have the right to operate another center within the 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.
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 generally will not operate or franchise another fixed-location Learningrx center within a franchisee's designated territory during the term of the agreement. However, this is subject to certain pre-existing agreements and reserved rights. Specifically, Learningrx or its affiliates may have previously licensed a third party to operate a similar business under a PACE license or Clinical license within the franchisee's territory, and these licensees can continue to operate without breaching the agreement.
Learningrx also retains several rights, including the right to operate or franchise Learningrx Training Centers in any location outside the franchisee's territory, regardless of proximity. They can also use and franchise other trademarks or service marks (besides the Learningrx marks) in any location, including the franchisee's territory, except for products provided "trainer to student." Additionally, Learningrx reserves the right to offer services or products through alternative channels of distribution, such as retail locations, the internet, or other methods, whether inside or outside the franchisee's territory.
Furthermore, Learningrx can acquire businesses similar to Learningrx Centers and operate them, even within the franchisee's territory, and can be acquired by a third party operating similar businesses, regardless of location. The franchise granted to the franchisee is non-exclusive, and Learningrx retains these rights without compensation to the franchisee. These stipulations significantly impact the franchisee's territorial exclusivity, as Learningrx retains considerable freedom to operate or license others within or near the franchisee's territory through various channels and brands.