What must Learningrx Franchisee Affiliates demonstrate if they deliver learning enhancement services after the franchise agreement terminates?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges that, in addition to the license of the Marks hereunder, Franchisor has also licensed commercially valuable information which comprises and is a part of the System, including without limitation, proprietary processes, operations, marketing and related information and materials and that the value of this information derives not only from the time, effort and money which went into its compilation, but from the usage of the same by all franchisees of Franchisor. Accordingly, this covenant not to compete is given in part in consideration for the commercially valuable information described herein, training and access to Franchisor's Trade Secrets, and which, if used without permission, would give Franchisee an unfair advantage over Franchisor and Franchisor's franchisees and affiliates. Franchisee
acknowledges that it will be difficult or impossible to deliver learning enhancement services or cognitive or math and reading training services without using Franchisor's proprietary information and Trade Secrets and therefore in addition to the covenant not to compete found above, Franchisee agrees that Franchisee Affiliates will have the obligation of demonstrating and proving that any deliveries of learning enhancement services or cognitive or math and reading training services do not infringe on Franchisor's rights to its proprietary Information and Trade Secrets at a time when Franchisee no longer has any rights to that proprietary information or Trade Secrets.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, if a Learningrx franchisee affiliate continues to provide learning enhancement, cognitive, math, or reading training services after the franchise agreement ends, they must demonstrate that these services do not infringe upon Learningrx's proprietary information and trade secrets. This obligation arises because Learningrx licenses commercially valuable information as part of its system, including proprietary processes, operations, marketing materials, and related information. The value of this information stems from the time, effort, and money invested in its development and its consistent use by all Learningrx franchisees.
This requirement is in addition to the standard non-compete agreement, which aims to prevent unfair competition by former franchisees. Learningrx emphasizes that it would be difficult to offer learning enhancement services without using its proprietary information and trade secrets. Therefore, the burden of proof falls on the franchisee affiliate to show that their post-termination services do not rely on or utilize Learningrx's protected intellectual property.
For a prospective Learningrx franchisee, this means understanding the scope and limitations of the non-compete agreement and the additional responsibility of proving non-infringement if they or their affiliates plan to continue offering similar services after the franchise agreement concludes. This could involve documenting the methods and materials used in the new services to demonstrate their independence from Learningrx's system. Franchisees should seek legal counsel to ensure compliance and avoid potential disputes with Learningrx regarding intellectual property rights.