Under what conditions will Learningrx refrain from franchising or operating Centers within the Development Territory?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of this Agreement and any extensions, neither Franchisor nor its affiliates will own, operate or franchise a fixed location for the operation of any other Center within your Territory as designated in Attachment I to this Agreement.
Franchisee will also have the right to service any persons in the Territory, regardless of the method of sales, subject to Franchisor's express reservation of rights set forth in Section 4.5.
Once established, the boundaries of Franchisee's Territory will not be adjusted by Franchisee without Franchisor's written consent regardless of whether the population of Franchisee's Territory increases or decreases over time.
Notwithstanding the foregoing, Franchisee acknowledges that prior to the term of this Agreement, Franchisor or its affiliate may have licensed to a third-party the right to use the System and/or Marks to operate a business that may be similar to the LearningRx Center operated by Franchisee under this Agreement pursuant to a PACE license or a Clinical license in a portion of Franchisee's Territory.
The pre-existing PACE licensee and/or Clinical licensee has the right to continue to operate the business per the PACE license and/or Clinical license in the portion of Franchisee's Territory and such ongoing use will not constitute a breach of this Agreement, including this Section 4.02 or an Area Developer Agreement, if any.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, Learningrx will not own, operate, or franchise a fixed location for the operation of any other Learningrx center within a franchisee's designated territory during the term of the agreement and any extensions. However, this is subject to Learningrx's express reservation of rights as outlined in Section 4.5 of the franchise agreement.
It is important to note that prior to the agreement, Learningrx or its affiliates may have already licensed a third party to use the Learningrx system and marks to operate a similar business, such as a PACE license or Clinical license, within a portion of the franchisee's territory. The pre-existing PACE licensee or Clinical licensee retains the right to continue operating their business under their respective licenses within the franchisee's territory. This ongoing operation by pre-existing licensees does not constitute a breach of the Learningrx franchise agreement.
In summary, while Learningrx generally agrees not to establish competing centers within a franchisee's territory, exceptions exist for pre-existing licensees operating under PACE or Clinical licenses. Prospective franchisees should carefully review Attachment I of the Franchise Agreement to understand the exact boundaries of their territory and inquire about any pre-existing licensees within that area to fully understand the competitive landscape.