Does the Learningrx Area Developer Agreement prevent an Area Developer from employing someone currently employed by Learningrx or another Learningrx franchisee?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
15.1 Covenants Not to Compete. During the term of this Agreement and for two (2) years after termination, transfer, or expiration of this Agreement for any reason, Franchisee agrees that neither Franchisee, nor any manager of Franchisee, any person associated with Franchisee, including officers, directors, shareholders, partners, members, trustees, employees or agents, and any members of Franchisee's immediate families (collectively "Franchisee Affiliates"), will (i) have any direct or indirect controlling interest as a legal or beneficial owner in a Competitive Business (as hereinafter defined); (ii) perform services as a director, partner, officer, manager, employee, consultant, representative, agent or otherwise for a Competitive Business; or (iii) divert or attempt to divert any business related to, or any customer or account of the LearningRx Training Center, Franchisee's Business, Franchisor's business, the business of any affiliate of Franchisor or any other franchisee licensed by Franchisor, by direct inducement or otherwise, or divert or attempt to divert the employment of any employee of Franchisor or another franchisee licensed by Franchisor, to any Competitive Business by any direct inducement or otherwise. During the term of this Agreement, this Covenant Not to Compete applies anywhere in the United States. For two (2) years after the termination, transfer, or expiration of this Agreement, for any reason, this Covenant Not to Compete applies: (a) within Franchisee's Territory; (b) within counties adjacent to Franchisee's Territory or within a Territory then operated by or under development by Franchisor or another franchisee of Franchisor; (c) within a fifty mile radius from the boundary of Franchisees Territory or from any other franchised or company-owned LearningRx Training Center, (d) on the Internet or (e) on any other Multi-Area Marketing channels used by Franchisor.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, the Area Developer Agreement includes covenants not to compete that address soliciting employees. Specifically, during the term of the agreement, an Area Developer (or their affiliates) is prohibited from diverting or attempting to divert the employment of any employee of Learningrx or another franchisee to any Competitive Business by direct inducement or otherwise. This restriction applies throughout the United States during the term of the Area Developer Agreement.
This means that while the agreement is in effect, an Area Developer cannot actively try to hire away employees from Learningrx corporate or from other Learningrx franchisees for a competing business. The term "Competitive Business" includes businesses offering learning enhancement, brain training, or math and reading training courses, programs, or products.
After the Area Developer Agreement terminates, this restriction continues for two years, but its geographic scope becomes more limited. It applies within the Area Developer's territory, adjacent counties, or within a 50-mile radius of any Learningrx Training Center. Therefore, the Area Developer must be cautious about recruiting Learningrx employees even after their agreement ends, especially within their immediate market area, to avoid violating the non-compete provisions.