For Learningrx, does the Covenant Not to Compete apply to a Spousal Affiliate during their employment by the franchisee?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
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- This Covenant Not to Compete shall apply:
- a. during the term of Spousal Affiliate's relationship, association with an owner of Franchisee or employment by Franchisee anywhere within the United States; and,
- b. for the two years following the termination of Spousal Affiliate's association with or employment by Franchisee:
- i. within Franchisee's Territory or any area serviced by Franchisee;
- ii. within counties adjacent to Franchisee's Territory or within a Territory then operated by or under development by Franchisor or another franchisee of Franchisor;
- iii. within a fifty mile radius from the boundary of Franchisees Territory or from any other franchised or company-owned LearningRx Training Center, or
- iv. on the Internet or 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 apply to a Spousal Affiliate during their employment by the franchisee. Specifically, the covenant applies during the term of the Spousal Affiliate's relationship, association, or employment with the franchisee, and this applies anywhere within the United States. This means that while the Spousal Affiliate is associated with or employed by the Learningrx franchisee, they are restricted from engaging in competitive business activities.
This restriction is designed to protect Learningrx's goodwill, trade secrets, and the overall system. The FDD states that the Spousal Affiliate acknowledges that receiving and using trade secrets constitutes valuable consideration for adhering to these covenants. This acknowledges the importance of protecting Learningrx's confidential information and market position.
After the termination of the Spousal Affiliate's association or employment, the Covenant Not to Compete continues for two years, but with geographical limitations. These limitations include the franchisee's territory, adjacent counties, areas within a 50-mile radius of any Learningrx center, and online or multi-area marketing channels used by Learningrx. This post-term restriction ensures that the Spousal Affiliate cannot immediately leverage the knowledge and relationships gained during their association with the Learningrx franchise to compete against it within a defined area.
It is important for prospective Learningrx franchisees to understand these restrictions and ensure that their Spousal Affiliates are fully aware of and willing to comply with these covenants. This is because the restrictions are in place to protect the Learningrx system and maintain fair competition within the franchise network.