Who bears the cost and expense of the Certified Professional Accountant's verification of negative net operating income for Learningrx's early termination option?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
Beginning three (3) years after the date of this Agreement, Franchisee may, at its option, upon sixty (60) days prior written notice ("Notice Period") to franchisor, terminate this Agreement prior to its expiration date ("Early Termination Option") if, at the time of exercising its option, the Business has a negative Net Operating Income on a cash basis (as recorded in the Franchisee's accounting software), and verified by Certified Professional Accountant approved by Franchisor (at Franchisee's sole cost and expense) over any aggregated twelve (12) consecutive month period during the Term of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, the franchisee is responsible for covering the costs associated with the Certified Professional Accountant's verification of negative net operating income when exercising the early termination option.
Specifically, if a Learningrx franchisee chooses to terminate the agreement early, beginning three years after the agreement date, they must provide a 60-day written notice. To qualify for this early termination, the business must have a negative Net Operating Income on a cash basis, as recorded in the franchisee's accounting software. This negative income must be verified by a Certified Professional Accountant approved by Learningrx.
The FDD clearly states that this verification is "at Franchisee's sole cost and expense". This means the franchisee will bear the full financial burden of hiring and paying the accountant to verify the negative net operating income. This is a crucial consideration for prospective franchisees, as it adds an extra expense to the early termination process.