For Learningrx franchisees operating in Indiana, what specific sections of the Franchise Disclosure Document and Franchise Agreement are amended regarding non-compete clauses?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
It is unlawful for any franchise agreement between any franchisor and a franchisee who is a resident of Indiana or a non-resident who is to operate the franchise in Indiana to contain a provision that requires a franchisee not to compete with the franchisor in an area greater than the territory granted in the franchise agreement or, if no territory is granted, in an area of more than reasonable size, upon termination of a franchise agreement. (Ind. Code § 23-2-2.7-1(9)). Accordingly, Item 17 (s) of the franchise disclosure document, Section 15.1 of the Franchise Agreement and Section 11.02 of the Area Developer Agreement are amended accordingly.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, certain sections are amended for franchisees operating in Indiana to comply with Indiana law regarding non-compete clauses. Specifically, Indiana law dictates that a franchise agreement cannot prevent a franchisee from competing with Learningrx in an area larger than the territory granted in the franchise agreement, or if no territory is specified, in an area of more than reasonable size, after the franchise agreement terminates.
To comply with this law, Item 17 (s) of the Franchise Disclosure Document, Section 15.1 of the Franchise Agreement, and Section 11.02 of the Area Developer Agreement are amended for Learningrx franchisees in Indiana. This means that the standard non-compete provisions outlined in these sections are modified to align with Indiana's specific requirements, ensuring that the restrictions on competition are limited to the franchisee's territory or a reasonable area.
This amendment is important for prospective Learningrx franchisees in Indiana because it clarifies the extent to which they will be restricted from competing with Learningrx after the franchise agreement ends. It ensures that the non-compete clause is fair and reasonable under Indiana law, protecting the franchisee from overly broad restrictions that could hinder their ability to pursue other business opportunities after leaving the Learningrx system.