What are the acceptable venues for proceedings relating to the Learningrx agreement?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
10.02. Governing Law/Consent to Venue and Jurisdiction. Except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sections 1051 et seq.), the Federal Arbitration Act, or other federal law, this Agreement shall be interpreted under the laws of the state of Colorado and any dispute between the parties shall be governed by and determined in accordance with the substantive laws of the state of Colorado, which laws shall prevail in the event of any conflict of law. The Area Developer and the Franchisor have negotiated regarding a forum in which to resolve any disputes which may arise between them and have agreed to select a forum in order to promote stability in their relationship. Therefore, if a claim is asserted in any legal proceeding involving the Area Developer, its officers, directors, managers or partners (collectively, "Area Developer Affiliates") and the Franchisor, its officers, directors or sales employees (collectively, "Franchisor Affiliates") the parties agree that the exclusive venue for disputes between them shall be in the state and federal courts of Denver, Colorado or the Denver, Colorado office of the AAA and each party waives any objection they may have to the personal jurisdiction of or venue in the state and federal courts of Denver, Colorado or the Denver, Colorado office of the AAA. The Franchisor, the Franchisor Affiliates, the Area Developer and the Area Developer Affiliates each waive their rights to a trial by jury.
10.03. Injunctive Relief. Notwithstanding the above provision for arbitration, the Franchisor and the Area Developer will each have the right in a proper case to obtain injunctive relief and any damages incidental thereto from a court of competent jurisdiction.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, the franchise agreement specifies that the exclusive venue for resolving disputes between the Area Developer (franchisee) and Learningrx (franchisor) will be in the state and federal courts of Denver, Colorado, or the Denver, Colorado office of the AAA (American Arbitration Association). This applies to any legal proceeding involving the Area Developer, their officers, directors, managers, or partners, and Learningrx, its officers, directors, or sales employees. Both parties agree to waive any objections to personal jurisdiction or venue in these courts or at the AAA office.
This clause aims to promote stability in the relationship between Learningrx and its Area Developers by predetermining a specific location for legal proceedings. It also includes a waiver of the right to a jury trial for both parties. However, this agreement is subject to certain state laws. For example, the Rhode Island Franchise Investment Act stipulates that any provision restricting jurisdiction or venue to a forum outside of Rhode Island is void with respect to claims enforceable under that Act.
Despite the arbitration agreement, Learningrx and the Area Developer retain the right to seek injunctive relief and associated damages from a court of competent jurisdiction in appropriate cases. This means that either party can pursue immediate court action to prevent irreparable harm, such as a breach of confidentiality or infringement of intellectual property, without being bound by the arbitration clause.
For prospective Learningrx franchisees, this venue and jurisdiction clause means that if a dispute arises that leads to legal action, they will likely need to travel to Denver, Colorado, to resolve the matter, unless they are in a state like Rhode Island with specific laws overriding this clause. They should also be aware that they are waiving their right to a jury trial. It is important to consult with legal counsel to understand the full implications of these provisions and how they may be affected by local state laws.