What is the condition under which a Learningrx Franchisee Affiliate can have an interest in a Competitive Business?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
for which such information or material may have been furnished to Franchisee Affiliate.
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- Franchisee Affiliate shall not at any time, directly or indirectly, do any act that would or would likely be injurious or prejudicial to the goodwill associated with the Licensed Marks, the Trade Secrets or the System.
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- All Operations Manuals are loaned by Franchisor to Franchisee for limited purposes only and remain the property of Franchisor and may not be reproduced, in whole or in part, without Franchisor's written consent.
COVENANTS NOT TO COMPETE
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- In order to protect the goodwill and unique qualities of the System and the confidentiality and value of the Trade Secrets, and in consideration for the disclosure to Franchisee Affiliate of the Trade Secrets, Franchisee Affiliate further agrees and covenants that Franchisee Affiliate will not without the prior written consent of Franchisor:
- a. Have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business, except with Franchisor's approval;
- b. Perform services as a director, officer, manager, employee, consultant, representative, agent or otherwise for a Competitive Business wherever operating except with Franchisor's approval;
- c. Divert or attempt to divert, directly or indirectly, any business, business opportunity or customer of the LearningRx Business to any competitor;
- d.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, a Franchisee Affiliate is restricted from having any direct or indirect interest in a Competitive Business without the franchisor's prior written consent. This restriction is in place to protect Learningrx's goodwill, unique qualities, trade secrets, and the overall system. A "Competitive Business" is defined as any business offering or franchising learning enhancement, brain training, cognitive training, or math and reading training courses, programs, or products.
This covenant not to compete applies during the term of the franchisee's relationship with Learningrx and extends for two years after termination, transfer, or expiration of the franchise agreement. The restriction applies within the franchisee's territory, counties adjacent to the territory, or within a fifty-mile radius from the boundary of the franchisee's territory or any other franchised or company-owned Learningrx Training Center. It also applies on the Internet or any other Multi-Area Marketing channels used by Learningrx.
For a prospective Learningrx franchisee, this means that during the franchise term and for two years afterward, they and their affiliates (including managers, officers, directors, shareholders, partners, members, trustees, employees, agents, and immediate family members) are significantly limited in their ability to participate in any competing business. Obtaining prior written consent from Learningrx is essential if a franchisee affiliate wishes to have any interest in a business that offers similar services. This restriction is broad and covers various forms of involvement, including ownership, employment, and consulting roles.
This non-compete agreement ensures that franchisees and their affiliates do not use Learningrx's confidential information and trade secrets to unfairly compete with the franchise system. Franchisees should carefully consider these restrictions and discuss any potential conflicts of interest with Learningrx before signing the franchise agreement. Understanding the scope and duration of these covenants is crucial for planning future business activities and ensuring compliance with the franchise agreement.