Can a Learningrx franchisee or manager have a business relationship with a Learningrx competitor?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
ce or on more favorable terms than disclosed to Franchisor in writing. Such transfer remains subject to Franchisor's prior written approval and other conditions specified in this Agreement. If Franchisor does not transfer the franchised Business to the transferee on the same terms offered to Franchisor, then Franchisee must again extend the right of first refusal to Franchisor in the manner described above, before another desired transfer.
15. GENERAL PROVISIONS
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.
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.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 40)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, both franchisees and their managers face restrictions on having business relationships with competitors. During the term of the franchise agreement, neither the franchisee, nor any manager of the franchisee, nor anyone associated with the franchisee (including officers, directors, shareholders, partners, members, trustees, employees, agents, and immediate family members) can have a direct or indirect controlling interest in a Competitive Business. This restriction applies to being a legal or beneficial owner in a Competitive Business.
Furthermore, franchisees and their managers are prohibited from performing services for a Competitive Business as a director, partner, officer, manager, employee, consultant, representative, or agent. They also cannot divert or attempt to divert any business related to the Learningrx Training Center, the franchisee's business, Learningrx's business, or the business of any affiliate or other Learningrx franchisee to any Competitive Business. These restrictions are in place to protect Learningrx's interests and prevent conflicts of interest.
After the franchise agreement terminates, these non-compete restrictions continue for two years. During this period, the restrictions apply within the franchisee's territory, in adjacent counties, within a 50-mile radius of the franchisee's territory or any other Learningrx center, and on the Internet or other multi-area marketing channels used by Learningrx. A "Competitive Business" is defined as any business offering learning enhancement courses, brain training, or math and reading training programs. However, these restrictions can be waived with Learningrx's prior written consent.