What constitutes a competing business that a LearningRx franchisee, owner, or guarantor is prohibited from starting, acquiring, or operating?

According to Learningrx's 2025 Franchise Disclosure Document, a "Competitive Business" is defined as any business that offers or franchises/licenses others to provide (i) learning enhancement courses, programs, or products; (ii) brain training or cognitive training courses, programs, or products; or (iii) math and reading training courses, programs, or products. This definition is crucial for Learningrx franchisees because it outlines the scope of activities they are restricted from engaging in, both during the term of their franchise agreement and for a period of two years after termination, transfer, or expiration of the agreement. This restriction applies to the franchisee, their managers, individuals associated with the franchisee, and their immediate families.

The non-compete covenant prevents franchisees and related parties from having a direct or indirect controlling interest in a Competitive Business, performing services for a Competitive Business, or diverting business or employees from Learningrx to a Competitive Business. During the franchise term, this covenant applies throughout the United States. After termination, it applies within the franchisee's territory, adjacent counties, within a 50-mile radius of any Learningrx center, and on the Internet or other multi-area marketing channels used by Learningrx.

This non-compete agreement is designed to protect Learningrx's goodwill, trade secrets, and the unique qualities of its system. Franchisees must obtain prior written consent from Learningrx to engage in any activities that might be considered competitive. This includes owning an interest in, or working for, a Competitive Business. The agreement also prohibits franchisees from disparaging Learningrx or taking actions that could harm its reputation. Prospective franchisees should carefully review the Confidentiality and Covenant Not to Compete Agreement (Attachment IX) to fully understand these restrictions and their implications.