Does the Learningrx covenant not to compete apply to any manager of the franchisee?
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 the 2025 Learningrx Franchise Disclosure Document, the covenant not to compete extends to the franchisee's managers. During the term of the Franchise Agreement and for two years after its termination, transfer, or expiration, the franchisee and their "Franchisee Affiliates" are restricted from engaging in competitive business activities. Franchisee Affiliates include managers of the franchisee, along with other associated individuals such as officers, directors, shareholders, partners, members, trustees, employees, agents, and immediate family members.
During the term of the agreement, this non-compete applies throughout the United States. After the agreement ends, the covenant not to compete applies for two years within the franchisee's territory, adjacent counties, areas under development by Learningrx or its franchisees, within a 50-mile radius of the franchisee's territory or any Learningrx center, and on the Internet or other multi-area marketing channels used by Learningrx.
This means that a Learningrx franchisee's manager is legally restricted from working for or owning a competing business that offers learning enhancement, brain training, or math and reading training courses, programs, or products during their employment and for two years after their employment ends, within the specified geographic and online areas. This is designed to protect Learningrx's trade secrets, goodwill, and customer relationships.