After termination of the Learningrx Area Developer Agreement, does the covenant not to compete apply to Learningrx activities on Multi-Area Marketing channels?
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 the 2025 Learningrx Franchise Disclosure Document, the covenant not to compete extends to activities on Multi-Area Marketing channels even after the termination, transfer, or expiration of the Area Developer Agreement. This restriction lasts for two years following the end of the agreement.
Specifically, the covenant applies not only within the Area Developer's designated territory and adjacent counties but also on the Internet and any other Multi-Area Marketing channels used by Learningrx. This means that a former Area Developer is restricted from engaging in competitive business activities through online or other broad marketing platforms that Learningrx utilizes.
The breadth of this restriction is significant for potential Area Developers. It limits their ability to immediately start or join a competing business that uses similar marketing channels, regardless of the physical location of that business. This could impact their future business opportunities and strategies within the learning enhancement or cognitive training sector.
This non-compete clause is designed to protect Learningrx's market presence and business strategies. Prospective Area Developers should carefully consider the implications of this clause, especially if they anticipate wanting to remain active in the industry after their agreement with Learningrx ends. They may want to seek legal counsel to fully understand the scope and enforceability of these restrictions in their specific jurisdiction.