What is the required action regarding the signed Confidentiality and Covenant Not to Compete Agreement for Learningrx franchisees?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
7.5 Confidentiality and Covenant Not to Compete Agreements.
- (a) If the Franchisee is an entity, then the following individuals must sign Franchisor's standard Confidentiality & Covenant Not to Compete Agreement (Attachment IX) before performing any work at the Business or otherwise having access to Franchisor's Confidential Information: each Member, shareholder, officer, director and partner of the entity, each spouse of such Member, shareholder, officer, director and partner, every manager of the Franchisee or Area Developer, each Guarantor of the Franchisee, the spouse of each Guarantor, and each employee having access to the Franchisor's confidential information.
- (b) If the Franchisee is not an entity, then the following individuals must sign Franchisor's standard Confidentiality & Covenant Not to Compete Agreement (Attachment IX) before performing any work at the Business or otherwise having access to Franchisor's Confidential Information: the spouse of the Franchisee, every manager of the Franchisee, each Guarantor of the Franchisee, the spouse of each Guarantor, and each employee having access to the Franchisor's confidential information. A copy of all such signed agreements shall be delivered to Franchisor within 1 week of their execution.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, the required action regarding the Confidentiality and Covenant Not to Compete Agreement depends on whether the franchisee is an entity or an individual. If the Learningrx franchisee is an entity, then each member, shareholder, officer, director, partner, their spouses, every manager, each guarantor, their spouses, and each employee with access to confidential information must sign the Confidentiality & Covenant Not to Compete Agreement. If the franchisee is not an entity, then the franchisee's spouse, every manager, each guarantor, their spouses, and each employee with access to confidential information must sign the agreement.
Regardless of whether the Learningrx franchisee is an entity or not, the signed original(s) of the Confidentiality and Covenant Not to Compete Agreement must be immediately delivered to Learningrx by the franchisee. Additionally, a copy of all such signed agreements must be delivered to Learningrx within 1 week of their execution. This ensures that Learningrx has a record of all individuals who have agreed to protect the company's confidential information and abide by the non-compete terms.
The non-compete agreement restricts individuals from having an interest in or working for a competitive business, diverting business from Learningrx, or making disparaging remarks about the company. These restrictions apply during the term of the franchise agreement and for two years after termination. The geographical scope of the non-compete extends to the franchisee's territory, adjacent counties, areas within a fifty-mile radius of a Learningrx center, and online channels used by Learningrx.
These measures are in place to protect Learningrx's trade secrets, goodwill, and competitive advantage. Prospective franchisees should carefully review the terms of the Confidentiality and Covenant Not to Compete Agreement and ensure that all relevant individuals are aware of their obligations. Failure to comply with these requirements could result in legal action or other penalties.