What was the claim against Learningrx in the Commonwealth of Virginia that led to the Consent Order SEC-2009-00071?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
g)
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 Consent Order SEC-2009-00071 in the Commonwealth of Virginia stemmed from a claim that Learningrx offered a franchise in Virginia before completing the necessary registration process.
To resolve the claim, Learningrx entered into a consent order with the state of Virginia on or about October 15, 2009. As part of the agreement, Learningrx offered rescission to the Virginia franchisee and agreed to cover $1,800 in administrative costs.
Notably, Learningrx did not admit or deny the claim as part of the consent order. This type of settlement is common in franchise disputes to avoid prolonged and costly litigation, even if the franchisor believes they acted properly. For a prospective Learningrx franchisee, this highlights the importance of ensuring the franchisor is fully compliant with all state registration requirements before entering into a franchise agreement.