What steps has Learningrx taken to maintain the confidentiality of the Trade Secrets?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
B-VIII(a)-1 WHEREAS, the Licensed Marks and Trade Secrets provide economic advantages to Franchisor and are not generally known to, and are not readily ascertainable by proper means by,
Franchisor's competitors who could obtain economic value from knowledge and use of the Trade Secrets; and,
WHEREAS, Franchisor has taken and intends to take all reasonable steps to maintain the confidentiality and secrecy of the Trade Secrets; and,
WHEREAS, Franchisor and Franchisee have agreed in the Franchise Agreement on the importance to Franchisor and to Franchisee and other licensed users of the System of restricting the use, access and dissemination of the Trade Secrets; and,
WHEREAS, it will be necessary for employees, agents and independent contractors of Franchisee, or any entity having an interest in Franchisee ("Franchisee Affiliates") to have access to and to use some or all of the Trade Secrets in the management and operation of Franchisee's LearningRx Business using the System; and,
WHEREAS, Franchisee has agreed to obtain from those Franchisee Affiliates written agreements protecting the Trade Secrets and the System against unfair competition; and,
WHEREAS, Franchisee Affiliate desires or will become associated with or be employed by Franchisee; to remain in such employment, or is or will become involved with the Company in the capacity of an officer, partner, director, agent, employee, principal, or as a beneficial owner of the person or entity that has acquired the right to operate a Business of the Company ("Franchisee"), or as an immediate family member of the Franchisee and will become privileged as to certain Confidential Information; and,
WHEREAS, Franchisee Affiliate desires and needs to receive and use the Trade Secrets in the course of his employment or association in order to effectively perform the services for Franchisee; and,
WHEREAS, Franchisee Affiliate acknowledges that receipt of and the right to use the Trade Secrets constitutes independent valuable consideration for the representations, promises and covenants made by Franchisee Affiliate herein;
NOW THEREFORE, in consideration of the mutual covenant and obligations contained herein, the receipt and sufficiency of which are acknowledged, the parties agree as follows:
CONFIDENTIALITY AGREEMENT
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, Learningrx takes several steps to maintain the confidentiality and secrecy of its trade secrets. These steps primarily involve written agreements and security procedures. Learningrx requires franchisees to obtain written agreements from franchisee affiliates and spousal affiliates protecting the trade secrets and the system against unfair competition. These affiliates must agree to maintain the trade secrets in confidence and only use them in connection with the Learningrx business. They are also prohibited from making copies of confidential documents without express written permission and from disclosing trade secrets to unauthorized individuals. Franchisee Affiliates must surrender any material containing trade secrets upon request or termination of employment.
Learningrx also emphasizes adherence to security procedures. Franchisees must strictly adhere to all security procedures prescribed by Learningrx for maintaining proprietary information as confidential. Disclosure of confidential information to employees is limited to the extent necessary for marketing products and services and operating the business. Franchisees are prohibited from using confidential information in any other business or manner not specifically authorized by Learningrx. Franchisees must exercise diligence to maintain the absolute confidentiality of all such information during and after the term of the agreement, following Learningrx's security procedures, including executing approved nondisclosure agreements and intranet, extranet, and Internet usage agreements.
Furthermore, Learningrx retains ownership of the operations manual, which contains trade secrets, and franchisees are only loaned the manual for limited purposes. The manual cannot be reproduced without Learningrx's written consent. Franchisees must also maintain strict compliance with the minimal standards set forth in the operations manual, including completing a background check for each of its employees. Failure to meet these standards may require franchisees and their employees to attend additional training at the franchisee's expense. These measures collectively aim to protect Learningrx's trade secrets and maintain the competitive advantage derived from them.