factual

Under what condition can a Learningrx Area Developer engage in activities that would otherwise be considered competitive during the term of the agreement?

Learningrx Franchise · 2025 FDD

Answer from 2025 FDD Document

    1. In order to protect the goodwill and unique qualities of the System and the confidentiality and value of the Trade Secrets, and in consideration for the disclosure to Spousal Affiliate of the Trade Secrets, Spousal Affiliate further agrees and covenants that Spousal Affiliate will not without the prior written consent of Franchisor:
  • a. Have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business, except with Franchisor's approval;
  • b. Perform services as a director, officer, manager, employee, consultant, representative, agent or otherwise for a Competitive Business wherever operating except with Franchisor's approval;
  • c. Employ, or seek to employ, any person who is at the time or was within the preceding 180 days employed by Franchisor, any of its affiliates or any of its franchisees, or otherwise directly or indirectly induce such person to leave that person's employment; or
  • d. Divert or attempt to divert, directly or indirectly, any business, business opportunity or customer of the LearningRx Business to any competitor;
  • e. Make any disparaging remarks, or otherwise take any action or do anything that could reasonably be anticipated to cause loss or damage to the business or business opportunities, affairs, reputation and goodwill of, or otherwise negatively reflect upon, Franchisor, the System or the Licensed Marks; and

The term "Competitive Business" as used in this Agreement will mean any business offering or granting franchises or licenses to others to provide: (i) learning enhancement courses, programs or products; (ii) brain training or cognitive training courses, programs or products; or (iii) math and reading training courses, programs, or products.

Source: Item 23 — RECEIPT (FDD pages 54–209)

What This Means (2025 FDD)

According to Learningrx's 2025 Franchise Disclosure Document, both Franchisees and Spousal Affiliates are subject to covenants not to compete. During the term of the agreement, these parties are restricted from having any direct or indirect interest in a Competitive Business, performing services for a Competitive Business, or diverting business from Learningrx to any competitor.

However, these restrictions are not absolute. A Learningrx Area Developer can engage in activities that would otherwise be considered competitive if they obtain prior written consent from Learningrx. This consent provides a specific exception to the non-compete obligations, allowing the Area Developer to participate in a Competitive Business with Learningrx's explicit approval.

This condition highlights the importance of communication and negotiation with Learningrx. If an Area Developer has an opportunity or interest in a business that might be considered competitive, seeking written consent from Learningrx is essential to avoid violating the agreement and potentially facing legal consequences. The definition of "Competitive Business" includes businesses offering learning enhancement, brain training, or math and reading training courses, programs, or products.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.