After termination of the Learningrx agreement, does the covenant not to compete apply within the franchisee's territory?
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, the covenant not to compete applies for two years after the termination, transfer, or expiration of the agreement. This restriction applies for any reason. Specifically, the franchisee and their affiliates are restricted from involvement with a Competitive Business within the franchisee's territory.
In addition to the franchisee's territory, the non-compete extends to counties adjacent to the franchisee's territory, or within a territory operated by Learningrx or another franchisee. It also applies within a fifty-mile radius from the boundary of the franchisee's territory or from any other franchised or company-owned Learningrx Training Center.
Furthermore, the covenant not to compete extends to online activities and multi-area marketing channels used by Learningrx. This means a former franchisee cannot engage in competitive activities on the internet or through other marketing channels that Learningrx utilizes. This broad scope aims to protect Learningrx's market presence and business model, even after a franchise agreement ends.