How are disputes resolved with Learningrx?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
ust be in the State of Colorado. (Subject to State law)* | | w. Choice of law | Section 16.06 | Colorado law applies. (Subject to State law)* |
| Provision | Section in Area Developer Agreement | Summary | |
|---|---|---|---|
| k. “Transfer” by franchisee - | Section 7.02 | Includes transfer of contract or assets or | |
| defined | ownership change. | ||
| l. Franchisor approval of | Section 7.03 | We have the right to approve all transfers but will | |
| transfer by Franchisee | not unreasonably withhold approval. | ||
| m. Conditions for franchisor approval of transfer | Section 7.03 | New Area Developer qualifies, all monetary obligations satisfied, ADA not in default of any agreement, Transfer Fee paid, purchase agreement approved, training arranged, general release signed by you*, and current agreement signed by new Franchisee. | |
| n. Franchisor’s right of first | Section 7.06 | We can match any offer for your Business. | |
| refusal to acquire franchisee’s | |||
| Business. | |||
| o. Franchisor’s option to | Not Applicable | Not Applicable | |
| purchase your Business | |||
| p. Death or disability of | Not Applicable | Not Applicable | |
| franchisee | |||
| q. Non-competition covenants during the term of franchise | Section 9.01 | Except as restricted by applicable state law, no involvement in competing business anywhere in U.S.* | |
| r. Non-competition covenants after the franchise is terminated or expires | Section 9.02 | Except as restricted by applicable state law, no involvement in competing business for 2 years within Development Territory, within adjacent counties, 50 miles from Development Territory or another LearningRx Area Developer or LearningRx Training Center, on the internet or other Multi-Area marketing channels | |
| s. Modification of agreement | Sections 11.02 | None except by a written agreement signed by the parties. | |
| t. Integration/merger clause | Section 11.01 | Only the terms of the Area Developer Agreement are binding (subject to state law). Any representations or promises made outside the franchise disclosure document and franchise agreement may not be enforceable. Nothing in this Agreement or in any related agreements is intended to disclaim the representations LearningRx made in the Franchise Disclosure Document. | |
| u. Dispute resolution by | Section 10.01 | Except for certain claims, all disputes must be | |
| arbitration or mediation | arbitrated. | ||
| v. Choice of forum | Section 10.02 | Mediation, arbitration and actions for injunctive relief, claims based on the Marks, or on covenants not to compete must be in the State of Colorado. (Subject to State law)* | |
| w. Choice of law | Section 10.02 | Colorado law applies. (Subject to State law)* | * See Exhibit E. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, dispute resolution is addressed in both the Area Developer Agreement and the Franchise Agreement. For the Area Developer Agreement, Section 10.01 states that, except for certain claims, all disputes must be arbitrated. Section 10.02 specifies that mediation, arbitration, and actions for injunctive relief, claims based on the Marks, or on covenants not to compete must occur in the State of Colorado and are subject to Colorado law, unless restricted by applicable state law.
Similarly, the Franchise Agreement outlines a dispute resolution process in Section 16. This section indicates that, except for certain claims, all disputes must first be mediated and then arbitrated. The choice of forum, as detailed in Section 16.06, mirrors that of the Area Developer Agreement, requiring mediation, arbitration, and actions for injunctive relief, claims based on the Marks, or on covenants not to compete to be conducted in the State of Colorado, under Colorado law, unless restricted by applicable state law.
For a prospective Learningrx franchisee, this means that most disputes will be resolved through arbitration, a process generally considered more efficient and less costly than traditional litigation. However, it is important to note that the location for these proceedings is fixed in Colorado, which may present logistical and financial challenges for franchisees located elsewhere. Additionally, the franchisee should be aware of which specific claims are exempt from the mandatory arbitration or mediation requirement, as these may be pursued through other legal avenues.
It is also important to note the integration/merger clause in both agreements. Section 11.01 of the Area Developer Agreement and Section 18.01 of the Franchise Agreement state that only the terms of the respective agreements are binding (subject to state law). Any representations or promises made outside the franchise disclosure document and franchise agreement may not be enforceable. However, both sections clarify that nothing in the agreements disclaims the representations Learningrx made in the Franchise Disclosure Document.