What are the non-competition covenants for a Learningrx franchisee during the term of the franchise?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| q. Non-competition covenants during the term of franchise | Section 15.01 | Except as restricted by applicable state law, no involvement in competing business anywhere in U.S. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, during the term of the franchise agreement, franchisees are subject to non-competition covenants. Specifically, Learningrx franchisees are prohibited from involvement in any competing business anywhere in the United States. This restriction is subject to applicable state laws, which may modify or limit the enforceability of the covenant in certain jurisdictions.
This means that while operating a Learningrx franchise, a franchisee cannot own, operate, or be involved in any other business that offers similar cognitive training or educational services. This covenant aims to protect Learningrx's business model, market share, and proprietary information. The breadth of the geographic scope—the entire United States—is notable and potentially more restrictive than what is seen in some other franchise systems, where non-competition might be limited to a specific radius around the franchise location.
Prospective franchisees should carefully consider the implications of this non-competition covenant. It effectively prevents them from diversifying their business interests within the same or similar industry during the term of their franchise agreement. Franchisees should seek legal counsel to understand how local state laws might affect the enforceability of this clause and to fully assess the potential limitations on their business activities.
It is important to note that the FDD also outlines post-term non-competition covenants, which are separate and distinct from the restrictions in place during the franchise term. These post-term covenants typically have a defined duration and geographic scope, further restricting a franchisee's activities after the franchise agreement ends.