What constitutes a prohibited act regarding transfer under the Learningrx franchise agreement?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.1 Prohibited Acts. Any unauthorized Transfer or other conveyance, by operation of law or otherwise, or any attempt to do so, shall be deemed void, a breach of this Agreement, and grounds for termination of this Agreement by Franchisor.
- 14.2 Transfer by Franchisor. Franchisor's obligations under this Agreement are not personal, and Franchisor can unconditionally assign and transfer, in its sole and absolute discretion, this Agreement to another person or business entity at any time. Franchisor does not need permission of Franchisee for the transfer and may transfer free of any responsibility or liability whatsoever to the Franchisee, provided the transferee assumes the Franchisor's material obligations. Franchisor may also:
- (a) sell or issue its stock, other ownership interests, or assets, whether privately or publicly;
- (b) merge with, acquire, or be acquired by another entity, including an entity that competes directly with Franchisee; or
- (c) undertake a refinancing, recapitalization, leveraged buyout, or other economic or financial restructuring.
- 14.3 Transfer by Franchisee. Franchisee's obligations under this Agreement are personal and may not be voluntarily or involuntarily sold, pledged, assigned, transferred, shared, subdivided, sub franchised, encumbered or transferred in any way without the prior express written approval of Franchisor.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, a prohibited act regarding transfer is any unauthorized transfer or conveyance. This includes any attempt to transfer the franchise by operation of law or otherwise. Such actions are considered a breach of the Franchise Agreement and can lead to termination of the agreement by Learningrx.
Learningrx retains the right to transfer the agreement unconditionally at its discretion. However, franchisees face restrictions and must obtain prior express written approval from Learningrx before any transfer of their franchise. This includes sales, pledges, assignments, or any other form of transfer.
This provision protects Learningrx by ensuring that franchisees do not transfer their rights or obligations without the franchisor's consent, maintaining control over who operates a Learningrx franchise. Prospective franchisees should understand these restrictions and the potential consequences of unauthorized transfers.