During the term of the Learningrx agreement, where does the covenant not to compete apply?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of this Agreement, this Covenant Not to Compete applies anywhere in the United States. For two (2) years after the termination, transfer, or expiration of this Agreement, for any reason, this Covenant Not to Compete applies: (a) within Franchisee's Territory; (b) within counties adjacent to Franchisee's Territory or within a Territory then operated by or under development by Franchisor or another franchisee of Franchisor; (c) within a fifty mile radius from the boundary of Franchisees Territory or from any other franchised or company-owned LearningRx Training Center, (d) on the Internet or (e) on any other Multi-Area Marketing channels used by Franchisor
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, during the term of the agreement, the covenant not to compete applies anywhere in the United States. This means that while you are a Learningrx franchisee, you (and your affiliates) are restricted from engaging in competitive business activities throughout the entire country. This restriction is designed to protect Learningrx's market position and prevent franchisees from using the brand's resources to benefit a competing business.
Specifically, the agreement states that neither the franchisee, nor any manager, person associated with the franchisee (including officers, directors, shareholders, partners, members, trustees, employees, or agents), nor any members of the franchisee's immediate families can have a direct or indirect controlling interest in a Competitive Business, perform services for a Competitive Business, or divert business or employees to a Competitive Business.
The definition of "Competitive Business" includes 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 broad definition means franchisees must be very careful about any other business ventures they or their affiliates are involved in, to ensure they do not violate the covenant not to compete.
This non-compete clause is a standard practice in franchising to protect the brand and other franchisees. Prospective Learningrx franchisees should carefully consider the scope of this restriction and ensure they are comfortable with it before signing the franchise agreement. It is also important to note that the covenant not to compete extends beyond the term of the agreement, with specific geographic and online restrictions in place for a period of two years after termination, transfer, or expiration of the agreement.