Who is included in the definition of "Franchisee Affiliates" for the Learningrx franchise agreement?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, the term "Franchisee Affiliates" is comprehensively defined within the context of covenants not to compete. This definition is crucial because it extends the restrictions of the non-compete agreement beyond just the franchisee to include a range of related parties. This means that these individuals and entities are also legally bound by the terms preventing them from engaging in competitive business activities during the franchise term and for a specified period afterward.
The definition of "Franchisee Affiliates" includes the franchisee, any manager of the franchisee, any person associated with the franchisee (including officers, directors, shareholders, partners, members, trustees, employees, or agents), and any members of the franchisee's immediate families. This broad scope ensures that Learningrx protects its business interests by preventing those closely connected to the franchisee from leveraging their knowledge and access to compete against the franchise.
For a prospective Learningrx franchisee, this definition has significant implications. It means that not only are they personally restricted from engaging in competitive activities, but so are their managers, business associates, and immediate family members. This could impact their ability to involve family members in the business or to partner with certain individuals who may have interests in competing businesses. Franchisees should carefully consider these restrictions and ensure that all relevant parties are aware of and willing to comply with the non-compete obligations. The restrictions apply during the term of the agreement anywhere in the United States and for two years after termination within a defined geographic area and online.