Besides the exceptions described, is Learningrx subject to a currently effective injunctive or restrictive order relating to the franchise under a federal, State or Canadian franchise, securities, antitrust, trade regulation or trade practice law?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
Neither the franchisor, nor any person or franchise broker in Item 2 of the FDD is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling such persons from membership in such association or exchange.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, the franchisor is generally not subject to any effective injunctive or restrictive orders. However, there are specific modifications and addenda for certain states that address franchise law and franchisee rights, which could potentially impact the enforcement of certain provisions within the franchise agreement. These modifications primarily concern issues such as termination, transfer, non-renewal, covenants not to compete, and waivers of claims under state franchise laws.
For example, the addendum for California notes that certain provisions in the franchise agreement, such as those related to termination upon bankruptcy or covenants not to compete extending beyond the franchise term, may not be enforceable under California or federal law. Similarly, the Virginia addendum points out that it is unlawful for a franchisor to cancel a franchise without reasonable cause or to use undue influence to induce a franchisee to surrender their rights, as defined under the Virginia Retail Franchising Act. The Minnesota addendum states that Learningrx will comply with Minnesota statutes regarding termination and non-renewal notices, and that certain provisions in the franchise agreement cannot abrogate franchisee rights under Minnesota law.
These state-specific addenda suggest that while Learningrx aims to maintain a standardized franchise agreement, the enforceability of certain clauses can vary significantly depending on the jurisdiction. Prospective franchisees should carefully review the addenda applicable to their state and consult with legal counsel to understand how these modifications may affect their rights and obligations under the franchise agreement. This is a fairly common practice in franchising, as franchise laws vary considerably from state to state, and franchisors often need to make adjustments to comply with local regulations.