What administrative costs did Learningrx agree to reimburse in settlement of the claim with the Commonwealth of Virginia?
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, a consent order was entered into with the state of Virginia on or about October 15, 2009, to settle a claim that Learningrx had offered a franchise in Virginia before completing the registration process. Learningrx did not admit or deny the claim. As part of the consent order, Learningrx offered rescission to the Virginia consumer who entered into the franchise agreement.
In settlement of all claims, Learningrx agreed to reimburse administrative costs of $1,800. This means that Learningrx paid $1,800 to cover the state's administrative expenses related to the investigation and settlement.
This type of settlement is not uncommon in franchise law, as franchisors must comply with state registration requirements before offering or selling franchises. Failure to do so can result in fines, rescission offers, and other penalties. For a prospective Learningrx franchisee, this litigation history indicates the importance of ensuring the franchisor is in full compliance with all applicable laws and regulations.