Does the Learningrx covenant not to compete apply to counties adjacent to the Development Territory after termination?
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 the 2025 Learningrx Franchise Disclosure Document, the covenant not to compete does extend to counties adjacent to the franchisee's territory after termination. Specifically, for two years after the termination, transfer, or expiration of the agreement, the covenant applies within the franchisee's territory, within counties adjacent to the franchisee's territory, or within a territory then operated by or under development by Learningrx or another franchisee.
This restriction also applies within a 50-mile radius from the boundary of the franchisee's territory or from any other franchised or company-owned Learningrx Training Center. Additionally, the covenant not to compete applies on the Internet or on any other Multi-Area Marketing channels used by Learningrx.
This means that after the franchise agreement ends, a former Learningrx franchisee is restricted from engaging in a competitive business within these defined areas for a period of two years. This includes owning, operating, or working for a business that offers similar learning enhancement, brain training, or cognitive training services. The definition of "Competitive Business" includes businesses offering learning enhancement courses, brain training, or cognitive training courses.