After termination of the Learningrx agreement, does the covenant not to compete apply on the Internet?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of this Agreement and for two (2) years after termination, transfer, or expiration of this Agreement for any reason, Franchisee agrees that neither Franchisee, nor any manager of Franchisee, any person associated with Franchisee, including officers, directors, shareholders, partners, members, trustees, employees or agents, and any members of Franchisee's immediate families (collectively "Franchisee Affiliates"), will (i) have any direct or indirect controlling interest as a legal or beneficial owner in a Competitive Business (as hereinafter defined); (ii) perform services as a director, partner, officer, manager, employee, consultant, representative, agent or otherwise for a Competitive Business; or (iii) divert or attempt to divert any business related to, or any customer or account of the LearningRx Training Center, Franchisee's Business, Franchisor's business, the business of any affiliate of Franchisor or any other franchisee licensed by Franchisor, by direct inducement or otherwise, or divert or attempt to divert the employment of any employee of Franchisor or another franchisee licensed by Franchisor, to any Competitive Business by any direct inducement or otherwise. 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, the covenant not to compete does apply on the Internet after the termination, transfer, or expiration of the franchise agreement. Specifically, for two years after the agreement ends, the franchisee is restricted from operating a competitive business on the Internet. This restriction is in place regardless of the reason for termination.
This means that a former Learningrx franchisee cannot directly or indirectly engage in a business that offers similar learning enhancement, brain training, or cognitive training programs online. This includes owning, operating, or working for a competing online business. The restriction extends not only to the franchisee but also to their managers, associates, and immediate family members.
This non-compete clause is designed to protect Learningrx's market share, trade secrets, and overall business model. It prevents former franchisees from leveraging the knowledge and experience gained while operating a Learningrx center to start a competing online business that could draw customers away from the Learningrx system. Franchisees should carefully consider the implications of this restriction before entering into a franchise agreement, as it could limit their business opportunities for two years after leaving the Learningrx system.