After termination of the Learningrx Area Developer Agreement, does the covenant not to compete apply to Learningrx activities on the Internet?
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 extends to Internet activities for a specified period after the termination, transfer, or expiration of the Area Developer Agreement. Specifically, for two years after the agreement ends, the covenant applies on the Internet. This means that a former Area Developer is restricted from engaging in competitive online activities related to learning enhancement, brain training, or math and reading training courses, programs, or products. This restriction is in place to protect Learningrx's market presence and brand reputation.
The covenant not to compete is applicable for two years after the termination of the agreement. During this period, the Area Developer is restricted from involvement in any business that is the same as or substantially similar to a Learningrx center. This includes owning, maintaining, engaging in, being employed by, advising, assisting, investing in, franchising, making loans to, or having any interest in such a business. The restriction applies not only within the Area Developer's original territory but also within a 50-mile radius of any Learningrx center and, importantly, on the Internet.
The definition of a "Competitive Business" includes businesses offering learning enhancement, brain training, or cognitive training courses, programs, or products, as well as math and reading training courses, programs, or products. This broad definition means that former Area Developers need to be very careful about any online ventures they pursue after leaving the Learningrx system to ensure they do not violate the covenant. The restrictions also extend to Multi-Area Marketing channels used by Learningrx, further limiting the online avenues a former Area Developer can pursue.
This non-compete clause is designed to protect Learningrx's trade secrets, goodwill, and market position. Prospective franchisees should carefully consider the implications of this clause, especially if they plan to remain in the educational services sector after their franchise agreement ends. It is advisable to seek legal counsel to fully understand the scope and enforceability of the covenant not to compete in their specific jurisdiction.