Does a Learningrx franchisee have the right to service anyone in their territory?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
tten approval, which may be withheld for any reason. Franchisee must maintain a physical location for the Center at all times.
- 4.2 Territory. During the term of this Agreement and any extensions, neither Franchisor nor its affiliates will own, operate or franchise a fixed location for the operation of any other Center within your Territory as designated in Attachment I to this Agreement. Franchisee will also have the right to service any persons in the Territory, regardless of the method of sales, subject to Franchisor's express reservation of rights set forth in Section 4.5. Once established, the boundaries of Franchisee's Territory will not be adjusted by Franchisee without Franchisor's written consent regardless of whether the population of Franchisee's Territory increases or decreases over time. Notwithstanding the foregoing, Franchisee acknowledges that prior to the term of this Agreement, Franchisor or its affiliate may have licensed to a third-party the right to use the System and/or Marks to operate a business that may be similar to the LearningRx Center operated by Franchisee under this Agreement pursuant to a PACE license or a Clinical license in a portion of Franchisee's Territory. The pre-existing PACE licensee and/or Clinical licensee has the right to continue to operate the business per the PACE license and/or Clinical license in the portion of Franchisee's Territory and such ongoing use will not constitute a breach of this Agreement, including this Section 4.02 or an Area Developer Agreement, if any.
- 4.3 Soliciting Outside the Territory.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, a franchisee has the right to service anyone within their designated territory, regardless of the method of sales. However, this right is subject to Learningrx's express reservation of rights as detailed in Section 4.5 of the franchise agreement. This means that while franchisees can generally serve individuals within their territory, Learningrx retains specific rights that could impact this ability.
It's important to note that Learningrx and its affiliates retain the exclusive right to operate or franchise Learningrx centers at any location outside the franchisee's territory, irrespective of its proximity to the franchisee's territory. Additionally, Learningrx reserves the right to use and franchise others to use trademarks or service marks other than the Learningrx marks within the franchisee's territory, except for products provided "trainer to student." This exception suggests a carve-out for specific educational materials or services directly delivered by trainers to students.
Furthermore, the FDD states that prior to the agreement, Learningrx may have already licensed a third party the right to use the Learningrx system and marks to operate a business, such as a PACE license or Clinical license, within the franchisee's territory. These pre-existing licensees retain the right to continue their operations, which will not be considered a breach of the agreement. Therefore, a Learningrx franchisee's right to service customers in their territory is subject to these pre-existing agreements and the franchisor's retained rights.