Does the bankruptcy termination provision in the Learningrx franchise agreement always apply in Maryland?

According to the 2025 Learningrx Franchise Disclosure Document, the franchise agreement includes a provision for termination upon bankruptcy; however, this provision may not always be enforceable in Maryland. Specifically, the FDD states that this provision might not be enforceable under federal bankruptcy law (11 U.S.C.A. Sec. 101 et seq.).

This means that if a Learningrx franchisee in Maryland files for bankruptcy, the standard termination clause in the franchise agreement might not automatically apply. Federal bankruptcy law could override the franchise agreement's terms, potentially preventing Learningrx from terminating the agreement solely based on the bankruptcy filing. This is a critical consideration for both Learningrx and potential franchisees in Maryland, as it affects the security and enforceability of the franchise agreement in such situations.

For a prospective Learningrx franchisee in Maryland, this addendum serves as a protective measure, ensuring that the franchisee's rights under federal bankruptcy law are not inadvertently waived or compromised by the standard franchise agreement. It is important for prospective franchisees to understand the interplay between the franchise agreement and federal bankruptcy laws, and to seek legal counsel to fully understand their rights and obligations in the event of bankruptcy.