What happens if a LearningRx franchisee diverts or attempts to divert current or prospective customers to a competing business?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
(c) Franchisee or Franchisee's owner or any guarantor of this Agreement starts, acquires or operates a competing business or diverts or attempts to divert current or prospective customers to a competing business in violation of the terms of the Confidentiality and Covenant Not To Compete Agreement attached to this Agreement as Attachment IX, and incorporated herein by reference.
13.2 Effect of Termination.
Franchisee or Franchisee's owner or any guarantor of this Agreement starts, acquires or operates a competing business or diverts or attempts to divert current or prospective customers to a competing business in violation of the terms of the Confidentiality and Covenant Not To Compete Agreement attached to this Agreement as Attachment IX, and incorporated herein by reference.
Upon any termination or expiration of this Agreement, all obligations that by their terms or by reasonable implication survive termination, including those pertaining to non-competition, confidentiality, and indemnity, will remain in effect, and Franchisee must immediately:
(a) promptly pay all amounts owed to Franchisor based on the operation of the Center through the effective date of termination;
(b) return, at Franchisee's sole cost and expense, including but not limited to shipping costs, to Franchisor all copies of the Operations Manual, customer lists, records, files, instructions, brochures, advertising materials, testing materials of any form or nature, agreements, Confidential Information and any and all other materials provided by Franchisor to Franchisee or created by a third-party for Franchisee relating to the operation of the Business, all items containing any Marks, copyrights, and other proprietary items, and all other items specifically identified in any written communication to Franchisee or in the Operations Manual;
(c) cancel or assign within five (5) business days all registrations relating to its use of any of the Marks, in Franchisor's sole and absolute discretion.
Franchisee must notify the telephone, Internet, email, electronic network, directory, and listing entities of the termination or expiration of the Franchisee's right to use any numbers, addresses, domain names, locators, directories and listings associated with any of the Marks, and must authorize their transfer to the Franchisor or any new franchisee as may be directed by the 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 prohibited from diverting or attempting to divert current or prospective customers to a competing business. This restriction is part of the Confidentiality and Covenant Not to Compete Agreement, which is attached to the Franchise Agreement as Attachment IX. Violation of this agreement can lead to termination of the franchise agreement.
Upon termination of the Learningrx agreement, the franchisee must promptly pay all outstanding amounts owed to Learningrx. The franchisee is also required to return all copies of the Operations Manual, customer lists, records, advertising materials, and any other confidential information provided by Learningrx. Additionally, the franchisee must cancel or assign all registrations related to the use of Learningrx's trademarks as directed by Learningrx.
Furthermore, the franchisee must notify all relevant entities, including telephone, internet, and directory services, about the termination of their right to use any numbers, addresses, domain names, or listings associated with Learningrx's marks, and authorize their transfer to Learningrx or a new franchisee. These measures ensure that Learningrx can protect its business interests and maintain its brand integrity, even after a franchise agreement is terminated.