Besides being an employee, what other roles are Learningrx Franchisee Affiliates prohibited from holding at a Competitive Business without Franchisor approval?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Learningrx's 2025 Franchise Disclosure Document, Franchisee Affiliates face restrictions regarding their involvement with Competitive Businesses. Specifically, without prior written consent from Learningrx, a Franchisee Affiliate is prohibited from holding various roles within a Competitive Business. These roles include being a director, partner, officer, manager, consultant, representative, or agent. This restriction applies during the term of the Franchise Agreement and extends for a period of two years after the agreement's termination, transfer, or expiration.
This non-compete covenant aims to protect Learningrx's interests by preventing Franchisee Affiliates from leveraging their knowledge and access to Learningrx's confidential information and trade secrets to benefit a competing business. The definition of a "Competitive Business" includes any entity offering learning enhancement, brain training, or math and reading training courses, programs, or products. The restrictions apply not only within the franchisee's territory but also in adjacent counties, within a 50-mile radius of any Learningrx center, and online.
For a prospective Learningrx franchisee, this means that not only are they themselves restricted from engaging with competing businesses in certain capacities, but these restrictions also extend to their managers, officers, directors, shareholders, partners, members, trustees, agents, employees, and immediate family members. Therefore, franchisees need to ensure that all individuals associated with their Learningrx business are aware of and compliant with these non-compete obligations to avoid potential breaches of the Franchise Agreement.