After termination of the Learningrx agreement, for how long is the franchisee restricted from having a controlling interest in a Competitive Business?
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, a franchisee is restricted from having a direct or indirect controlling interest in a Competitive Business for two years after the termination, transfer, or expiration of the Franchise Agreement. This restriction applies to the franchisee, their managers, any person associated with the franchisee (including officers, directors, shareholders, partners, members, trustees, employees, or agents), and any members of the franchisee's immediate families. This is referred to as "Franchisee Affiliates".
During the term of the agreement, this covenant not to compete applies anywhere in the United States. After termination, the covenant applies within the franchisee's territory, in counties adjacent to the franchisee's territory or territories operated or under development by Learningrx or another franchisee, within a 50-mile radius of the franchisee's territory or any other Learningrx Training Center, on the Internet, and on any other Multi-Area Marketing channels used by Learningrx.
A "Competitive Business" is defined as any business offering or franchising learning enhancement, brain training, or math and reading training courses, programs, or products. This non-compete agreement aims to protect Learningrx's goodwill, trade secrets, and customer relationships by preventing former franchisees from directly competing with the system within a specified timeframe and geographic area. This type of restriction is common in franchising to protect the brand and prevent unfair competition from former franchisees who have gained knowledge and experience operating within the Learningrx system.