What rights does a Learningrx franchisee have to service persons within their designated territory?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will also have the right to service any persons in the Territory, regardless of the method of sales, subject to Franchisor's express reservation of rights set forth in Section 4.5.
Once established, the boundaries of Franchisee's Territory will not be adjusted by Franchisee without Franchisor's written consent regardless of whether the population of Franchisee's Territory increases or decreases over time.
Notwithstanding the foregoing, Franchisee acknowledges that prior to the term of this Agreement, Franchisor or its affiliate may have licensed to a third-party the right to use the System and/or Marks to operate a business that may be similar to the LearningRx Center operated by Franchisee under this Agreement pursuant to a PACE license or a Clinical license in a portion of Franchisee's Territory.
The pre-existing PACE licensee and/or Clinical licensee has the right to continue to operate the business per the PACE license and/or Clinical license in the portion of Franchisee's Territory and such ongoing use will not constitute a breach of this Agreement, including this Section 4.02 or an Area Developer Agreement, if any.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, a franchisee has the right to service individuals within their designated territory, regardless of the sales method employed. However, this right is subject to Learningrx's express reservation of rights as detailed in Section 4.5 of the franchise agreement. It's important to note that Learningrx or its affiliates may have previously granted a third party the right to operate a similar business under a PACE license or Clinical license within the franchisee's territory. This pre-existing licensee retains the right to continue operating their business, and this operation does not constitute a breach of the agreement.
Despite the franchisee's right to service individuals within their territory, Learningrx retains several key rights. These include the right to operate or franchise Learningrx centers at any location outside the franchisee's territory, regardless of proximity. Learningrx also reserves the right to use and franchise others to use trademarks or service marks other than the Learningrx marks, whether in alternative distribution channels or at any location, including within the franchisee's territory. The exception to this is for products provided "trainer to student".
Furthermore, Learningrx maintains control over internet marketing and the use of its marks online. Franchisees are restricted from independently marketing on the internet or using domain names or social media presence that are similar to Learningrx's marks without prior written approval. Franchisees are expected to provide content for Learningrx's internet marketing efforts and adhere to internet and intranet usage agreements. These stipulations ensure that Learningrx maintains brand consistency and controls its online presence, which could impact how a franchisee reaches potential customers within their territory.
To maintain territorial rights, a Learningrx franchisee must meet a Minimum Annual Revenue Quota. This quota starts six months after opening and is based on the population within the territory. For example, the minimum revenue is $50,000 for every 100,000 people in the territory for the first 12 months, increasing to $75,000 for the second 12 months, and then to $100,000 thereafter. Failure to meet this quota may result in the loss of exclusivity, reduction of the territory, or termination of the agreement, at Learningrx's discretion. This revenue quota adds a layer of risk, as franchisees must actively market and provide services to meet these financial benchmarks to retain their territorial benefits.