What is the franchisee giving in consideration for the commercially valuable information, training, and access to Trade Secrets from Learningrx?
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.
The term "Competitive Business" as used in this Agreement will mean any business offering or granting franchises or licenses to others to provide: (i) learning enhancement courses, programs or products; (ii) brain training or cognitive training courses, programs or products; or (iii) math and reading training courses, programs, or products.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, the franchisee provides a covenant not to compete in exchange for commercially valuable information, training, and access to Learningrx's trade secrets. This covenant ensures that the franchisee will not use the franchisor's proprietary information and trade secrets to gain an unfair advantage over Learningrx and its other franchisees.
The franchisee acknowledges that delivering learning enhancement services or cognitive training without using Learningrx's proprietary information and trade secrets would be difficult or impossible. Therefore, the franchisee agrees to prove that any delivery of such services does not infringe on Learningrx's rights to its proprietary information and trade secrets, especially after the franchise agreement terminates.
The agreement defines a "Competitive Business" as any entity offering or franchising learning enhancement, brain training, or math and reading training courses, programs, or products. This definition clarifies the scope of the non-compete agreement, ensuring that franchisees understand what activities are prohibited during and after their association with Learningrx. This non-compete agreement is crucial for protecting Learningrx's business model and intellectual property, while also setting clear boundaries for franchisees regarding their future business endeavors.