Who are considered 'Franchisee Affiliates' for a Learningrx franchise?
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 Learningrx's 2025 Franchise Disclosure Document, "Franchisee Affiliates" is a collective term that includes the franchisee, any manager of the franchisee, any person associated with the franchisee, including officers, directors, shareholders, partners, members, trustees, employees or agents, and any members of the franchisee's immediate families. This definition is important because these individuals are subject to certain restrictions, particularly covenants not to compete. These covenants apply both during the term of the Franchise Agreement and for a period after its termination, transfer, or expiration.
The non-compete agreement restricts franchisee affiliates from having a direct or indirect controlling interest in a Competitive Business, performing services for a Competitive Business, or diverting business away from the Learningrx Training Center. These restrictions apply during the agreement term anywhere in the United States. After the agreement ends, the restrictions are limited to the franchisee's territory, adjacent counties, areas under development by Learningrx or its franchisees, a 50-mile radius from any Learningrx Training Center, and online channels used by Learningrx.
This broad definition of "Franchisee Affiliates" and the associated non-compete obligations have significant implications for prospective Learningrx franchisees. It means that not only the franchisee but also their managers, business associates, and immediate family members are bound by these restrictions. A prospective franchisee should carefully consider these limitations and ensure that all individuals falling under this definition understand and are willing to comply with the covenants not to compete. This is a common practice in franchising to protect the brand and trade secrets.