exception

Under what condition can a Learningrx Spousal Affiliate have a direct or indirect interest in a Competitive Business?

Learningrx Franchise · 2025 FDD

Answer from 2025 FDD Document

for which such information or material may have been furnished to Franchisee Affiliate.

    1. Franchisee Affiliate shall not at any time, directly or indirectly, do any act that would or would likely be injurious or prejudicial to the goodwill associated with the Licensed Marks, the Trade Secrets or the System.
    1. All Operations Manuals are loaned by Franchisor to Franchisee for limited purposes only and remain the property of Franchisor and may not be reproduced, in whole or in part, without Franchisor's written consent.

COVENANTS NOT TO COMPETE

    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 Franchisee Affiliate of the Trade Secrets, Franchisee Affiliate further agrees and covenants that Franchisee 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. Divert or attempt to divert, directly or indirectly, any business, business opportunity or customer of the LearningRx Business to any competitor;
  • d. 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;

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

What This Means (2025 FDD)

According to Learningrx's 2025 Franchise Disclosure Document, a Spousal Affiliate can have a direct or indirect interest in a Competitive Business if they obtain prior written consent from Learningrx. A Competitive Business is defined as 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.

This condition is part of the Covenants Not to Compete outlined in the agreement between Learningrx and the Spousal Affiliate. These covenants are in place to protect the goodwill, unique qualities of the Learningrx system, and the confidentiality and value of its trade secrets. The Spousal Affiliate acknowledges that receiving and using these trade secrets constitutes valuable consideration for the promises made within the agreement.

For a prospective Learningrx franchisee, this means that their spouse, as a Spousal Affiliate, is generally prohibited from having any interest in a competing business without Learningrx's explicit approval. This restriction aims to prevent conflicts of interest and protect Learningrx's market position. It is important for franchisees and their spouses to understand these limitations and seek written consent from Learningrx if any potential competitive interests arise.

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.