To what extent does a Learningrx Franchisee Affiliate waive claims against the Franchisor regarding employment status?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee Affiliate, Franchisee, and its officers, directors, shareholders, managers, members and partners expressly acknowledge that they possess skills and abilities of a general nature and have other opportunities for exploiting such skills. Consequently, enforcement of the covenants made in this Section will not deprive them of their personal goodwill or ability to earn a living.
MISCELLANEOUS
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- Franchisee shall make all commercially reasonable efforts to ensure that Franchisee Affiliate acts as required by this Agreement.
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- Franchisee Affiliate acknowledges and agrees that Franchisee Affiliate is signing this Agreement as a condition for receiving access to, and the ability to use, Franchisor's confidential information in the performance of Franchisee Affiliate's duties and obligations as an owner, spouse, employee or contractor of Franchisee and that the execution of this Agreement will not be deemed to create an employment relationship between Franchisor and Franchisee Affiliate and Franchisor. Franchisee Affiliate hereby waives, to the greatest extent permitted by federal law and the law of the state or states in which Franchisee Affiliate resides and is employed by Franchisee, any claim that
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, a Franchisee Affiliate acknowledges that signing the agreement does not create an employment relationship between the Franchisor and the Franchisee Affiliate. The Franchisee Affiliate waives any claim, to the greatest extent permitted by federal and state law, to be deemed an employee of Learningrx by virtue of signing the agreement. This waiver is a condition for the Franchisee Affiliate to access and use Learningrx's confidential information while performing duties as an owner, spouse, employee, or contractor of the franchisee.
This waiver means that the Franchisee Affiliate, who is typically closely related to the franchisee (e.g., spouse, family member), agrees not to pursue claims against Learningrx based on an employer-employee relationship. This is intended to protect Learningrx from potential liabilities associated with employment claims from individuals who are not directly employed by them but have access to their confidential information and system.
However, the FDD also includes addenda for Rhode Island, South Dakota, and Virginia that state no statement, questionnaire, or acknowledgement signed by a franchisee can waive claims under applicable state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Learningrx. These addenda supersede any other terms in documents related to the franchise agreement within those states. Therefore, the waiver regarding employment status may not be fully enforceable in these states if it conflicts with state franchise laws.
Prospective franchisees should be aware of this waiver and its potential limitations, especially if they or their affiliates are located in Rhode Island, South Dakota, or Virginia. It is advisable to consult with a legal professional to fully understand the implications of this waiver and how it may affect their rights and obligations under the franchise agreement.