During the term of the franchise, what non-competition covenants apply to Learningrx franchisees?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
rtain important provisions of the franchise and related agreements. You should read the full provisions in the Franchise Agreement attached to this Disclosure Document.**
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| k. “Transfer” by franchisee – | Section 14.03 | Includes transfer of contract or assets or |
| defined | ownership change. | |
| l. Franchisor approval of | Section 14.04-14.06 | We have the right to approve all transfers but will |
| transfer by Franchisee | not unreasonably withhold approval. | |
| m. Conditions for franchisor approval of transfer | Section 14.04 | New Franchisee qualifies, Transfer Fee paid, the Training and Materials Fee is paid; purchase agreement approved, training arranged, general release signed by you*, and current agreement signed by new Franchisee. |
| n. Franchisor’s right of first refusal to acquire franchisee’s Business. | Section 14.07, Attachment XI | We can match any offer for your Business. |
| o. Franchisor’s option to purchase your Business | Section 14.07, Attachment XI | We may purchase your inventory and equipment at fair market value if franchise is terminated for any reason. |
| p. Death or disability of | Section 14.06 | Franchise must be assigned by estate to approved |
| franchisee | buyer within 120 days. | |
| q. Non-competition covenants during the term of franchise | Section 15.01 | Except as restricted by applicable state law, no involvement in competing business anywhere in U.S. |
| r. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, franchisees are subject to non-competition covenants during the term of the franchise agreement. Specifically, franchisees are prohibited from involvement in any competing business anywhere in the United States. However, this restriction is subject to applicable state laws, which may modify or limit the enforceability of the covenant. This covenant applies to both franchisees and area developers.
This means that while operating a Learningrx franchise, a franchisee cannot own, operate, or be involved in any other business that offers similar cognitive training or learning services. This restriction is quite broad, covering the entire United States, but it acknowledges that state laws may provide some exceptions or limitations.
Prospective franchisees should be aware of this non-compete clause and carefully consider its implications. They should consult with legal counsel to understand how state laws in their area may affect the enforceability of this covenant. It is also important to clarify with Learningrx what specific activities would be considered a 'competing business' to avoid any potential conflicts during the franchise term.