What action was Learningrx required to take regarding the Virginia consumer who had entered into a franchise agreement?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
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ITEM 3 LITIGATION
Governmental Actions:
In the Matter of the Commonwealth of Virginia vs. LearningRx Franchise Corporation, Consent Order SEC-2009-00071. On or about October 15, 2009, LearningRx Franchise Corporation entered into a consent order with the state of Virginia in full settlement of a claim that LearningRx had offered one franchise in the state of Virginia prior to the completion of the registration process allowing it to do so. Pursuant to the consent order agreed to by LearningRx, and without admitting nor denying the claim, a rescission was offered to the Virginia consumer who had entered into a franchise agreement with LearningRx and LearningRx agreed to reimburse adminis
Source: Item 3 — LITIGATION (FDD page 12)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, the company entered into a consent order with the state of Virginia on or about October 15, 2009, to settle a claim that it had offered a franchise in Virginia before completing the necessary registration process.
As part of the consent order, Learningrx offered rescission to the Virginia consumer who had previously entered into a franchise agreement with them. This means Learningrx offered to cancel the franchise agreement and return the franchisee to their original position before the agreement was signed, as if the agreement never happened.
In addition to offering rescission, Learningrx also agreed to reimburse administrative costs of $1,800 to settle all claims related to the matter. This suggests that Learningrx took responsibility for its failure to properly register before offering the franchise and compensated the affected party for the expenses incurred as a result.