What form of franchise agreement does Learningrx require a transferee to execute?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
pproved by Franchisor or be effective unless and until:
- (a) Franchisee is under no material default in the performance or observance of any of its obligations under this Agreement and Franchisee is under no material default that materially impairs or detracts from the goodwill or brand under any other agreement with Franchisor at the time Franchisee requests permission to transfer the Business or at the time of the transfer;
- (b) Franchisee has settled all outstanding accounts with Franchisor, and Franchisee, and every principal of Franchisee's entity, have executed a general release of Franchisor and all principals of Franchisor from all claims that may be brought by you or any principal;
- (c) the proposed transferee pays Franchisor a fee to transfer the Business ("Transfer Fee") in the amount of Ten Thousand and 00/100 Dollars ($10,000.00), unless the transferee is: (i) a corporation, partnership, or limited liability company of which Franchisee is the majority stockholder, or a child, parent, sibling or spouse of Franchisee, in which case no Transfer Fee will be required, or (ii) another franchisee of LearningRx, in which case the Transfer Fee will be Five Thousand and 00/100 Dollars ($5,000.00). The Transfer Fee is fully earned upon payment and is non-refundable under any circumstances;
- (d) the proposed transferee executes a separate franchise agreement with Franchisor, using the then-current form of franchise agreement;
- (e) the proposed transferee pays for, attends, and satisfactorily completes the training program for new franchisees unless the transferee is a current franchisee or administrative staff member in good standing in the System that has already attended a full franchise training and met the current training requirements for a Center's staff;
- (f) the proposed transferee pays an Initial Training and Materials Fee of Ten Thousand and 00/100 Dollars ($10,000.00) upon the signing of the separate franchise agreement with Franchisor, unless the transferee is another franchisee of LearningRx, in which case the Initial Training and Materials Fee will be Six Thousand and 00/100 Dollars ($6,000.00). The Initial Training and Materials Fee is fully earned upon payment and is non-refundable under any circumstances;
- (g) the individual proposed transferee, or the stockholders, partners, members, or trustees and beneficiaries of a proposed entity transferee, each execute a personal guarantee, jointly and severally guaranteeing the performance of the proposed
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, a proposed transferee must execute a separate franchise agreement with Learningrx, utilizing the then-current form of the franchise agreement. This requirement ensures that the transferee is bound by the most up-to-date terms and conditions set forth by Learningrx.
In addition to executing the current franchise agreement, the transferee must also settle all outstanding accounts with Learningrx and execute a general release of Learningrx and its principals from all claims. The individual proposed transferee, or the stockholders, partners, members, or trustees and beneficiaries of a proposed entity transferee, must each execute a personal guarantee, jointly and severally guaranteeing the performance of the proposed transferee's obligations. The transferee must also demonstrate to Learningrx's satisfaction that it meets Learningrx's standards applicable to new franchisees regarding experience, personal and financial reputation and stability, willingness and ability to devote his or her full time and best efforts to the operation of the franchised Business, and any other conditions as Learningrx may reasonably apply in evaluating new franchisees.
Furthermore, the transferee is obligated to pay a Transfer Fee of $10,000, unless the transferee is a corporation, partnership, or limited liability company of which the franchisee is the majority stockholder, or a child, parent, sibling, or spouse of the franchisee, in which case no Transfer Fee will be required, or another franchisee of LearningRx, in which case the Transfer Fee will be $5,000. The transferee must also pay an Initial Training and Materials Fee of $10,000 upon signing the separate franchise agreement with Learningrx, unless the transferee is another Learningrx franchisee, in which case the Initial Training and Materials Fee will be $6,000. These fees are fully earned upon payment and are non-refundable under any circumstances.
This requirement to sign a new franchise agreement and meet current standards protects Learningrx by ensuring that all franchisees, including those who acquire existing centers, adhere to the current operational and financial requirements. Prospective transferees should carefully review the then-current form of the franchise agreement to understand their obligations and the associated costs.