What is a Learningrx Spousal Affiliate prohibited from doing that would divert business from a LearningRx Business to a competitor?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
r indirect interest as a disclosed or beneficial owner in a Competitive Business, except with Franchisor's approval;
- b. Perform services as a director, officer, manager, employee, consultant, representative, agent or otherwise for a Competitive Business wherever operating except with Franchisor's approval;
- c. Employ, or seek to employ, any person who is at the time or was within the preceding 180 days employed by Franchisor, any of its affiliates or any of its franchisees, or otherwise directly or indirectly induce such person to leave that person's employment; or
- d. Divert or attempt to divert, directly or indirectly, any business, business opportunity or customer of the LearningRx Business to any competitor;
- e. Make any disparaging remarks, or otherwise take any action or do anything that could reasonably be anticipated to cause loss or damage to the business or business opportunities, affairs, reputation and goodwill of, or otherwise negatively reflect upon, Franchisor, the System or the Licensed Marks; and
The term "Competitive Business" as used in this Agreement will mean any business offering or granting franchises or licenses to others to provide: (i) learning enhancement courses, programs or products; (ii) brain training or cognitive training courses, programs or products; or (iii) math and reading training courses, programs, or products.
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- This Covenant Not to Compete shall apply:
- a. during the term of Spousal Affiliate's relationship, association with an owner of Franchisee or employment by Franchisee anywhere within the United States; and,
- b. for the two years following the termination of Spousal Affiliate's association with or employment by Franchisee:
- i.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, a Spousal Affiliate is prohibited from diverting or attempting to divert, directly or indirectly, any business, business opportunity, or customer of the LearningRx Business to any competitor. This restriction is part of the covenants not to compete that Spousal Affiliates agree to in order to protect the goodwill and unique qualities of the Learningrx system, as well as the confidentiality and value of its trade secrets. This agreement is made in consideration for the disclosure of these trade secrets to the Spousal Affiliate.
This means that a Spousal Affiliate cannot actively try to take clients or business prospects away from Learningrx and direct them to a competing business. The term "Competitive Business" is defined as any business offering or granting franchises or licenses to others to provide learning enhancement courses, programs or products; brain training or cognitive training courses, programs or products; or math and reading training courses, programs, or products.
This covenant not to compete applies during the term of the Spousal Affiliate's relationship, association, or employment with the Learningrx franchisee anywhere in the United States. Furthermore, it extends for two years following the termination of the Spousal Affiliate's association or employment. During this two-year period, the restriction applies within the franchisee's territory, in adjacent counties, within a fifty-mile radius of any Learningrx center, and on the Internet or any other multi-area marketing channels used by Learningrx.
These restrictions are designed to protect Learningrx's business interests and prevent unfair competition. Prospective franchisees should ensure their Spousal Affiliates fully understand these obligations, as a breach could have significant legal and financial consequences for both the franchisee and the Spousal Affiliate. It is also important to note that these restrictions do not prevent the Spousal Affiliate from owning a small percentage (5% or less) of shares in a publicly traded company that may be considered a competitor.