After termination of the Learningrx Area Developer Agreement, for how long after termination does the post-term competition restriction apply to Learningrx?
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 Area Developer's Development Territory; (b) within counties adjacent to the Development Territory or within a Development Territory then operated by or under development by Franchisor or another Area Developer of Franchisor; (c) within a fifty (50) mile radius from the boundary of Area Developer's Development 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
9.02. Post-Term Competition. Area Developer covenants that, except as otherwise approved in writing by Franchisor, Area Developer shall not, for a continuous uninterrupted period
commencing upon the expiration or termination of this Agreement, regardless of the cause for termination, and continuing for two (2) years thereafter, either directly or indirectly, for itself or through, on behalf of or in conjunction with any person, persons, partnership or corporation, own, maintain, engage in, be employed by, advise, assist, invest in, franchise, make loans to, or have any interest in any business which is the same as or substantially similar to the Center and which is located within a radius of fifty (50) miles of the Development Territory hereunder or the location of any area developer, or any company-owned franchised Center under the System which is in existence on the date of expiration or termination of this Agreement. However, Sections 9.01 and 9.02 shall not apply to ownership by Area Developer of less than a five percent (5%) beneficial interest in the outstanding equity securities of any publicly held corporation.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, the post-term competition restriction for Area Developers lasts for two years after the termination, transfer, or expiration of the Area Developer Agreement. During this two-year period, the covenant not to compete applies within the Area Developer's Development Territory, in counties adjacent to that territory, or within a fifty-mile radius from the boundary of the Development Territory or any other Learningrx Training Center. This restriction also extends to the Internet and any other Multi-Area Marketing channels used by Learningrx.
Specifically, the Area Developer is prohibited from owning, maintaining, engaging in, being employed by, advising, assisting, investing in, franchising, making loans to, or having any interest in any business that is the same as or substantially similar to a Learningrx center. This restriction applies to businesses located within a 50-mile radius of the Development Territory or any company-owned or franchised Learningrx center in existence at the time of termination or expiration. However, the restriction does not apply to ownership of less than 5% of the equity securities of a publicly held corporation.
This non-compete agreement ensures that former Area Developers do not use their knowledge and experience gained while with Learningrx to directly compete with the franchise system within a defined geographical area and online. This is a fairly standard practice in franchising to protect the brand and other franchisees. Prospective Area Developers should carefully consider the implications of this restriction, especially if they plan to remain in the same geographic area after their agreement ends.