Can a Learningrx franchisee divert the employment of any employee of Franchisor or another franchisee?
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 Learningrx's 2025 Franchise Disclosure Document, a franchisee is restricted from diverting or attempting to divert the employment of any employee of the franchisor or another franchisee licensed by Learningrx to any Competitive Business by any direct inducement or otherwise. This restriction is in place during the term of the Franchise Agreement.
Following the termination, transfer, or expiration of the Franchise Agreement, this covenant not to compete extends for two years. During this period, the restriction applies within the franchisee's territory, in counties adjacent to the franchisee's territory or within a territory operated by Learningrx or another franchisee, within a fifty-mile radius from the boundary of the franchisee's territory or any other franchised or company-owned Learningrx Training Center, on the Internet, or on any other Multi-Area Marketing channels used by Learningrx.
This non-compete agreement aims to protect Learningrx's interests by preventing franchisees from poaching employees who possess knowledge of the company's operational methods and trade secrets. For a prospective franchisee, this means they must be careful not to recruit employees from Learningrx or other franchisees, as doing so could lead to legal repercussions. It is important to understand the definition of "Competitive Business" as it relates to these restrictions.