Does the Learningrx franchise agreement require arbitration for disputes related to trademarks?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
10.01. Arbitration. Franchisor shall have the right, but not the obligation, to enforce this Agreement by the judicial process (and not by arbitration): (1) to protect any of its rights regarding any of its trademarks or to protect any of its intellectual property; (2) to protect any security interest; and (3) and to pursue any rights it may have under any leases, subleases, sales, promissory notes, purchases, security agreements, covenants not to compete or other agreements with Franchisee. Except as provided above, all controversies, disputes or claims between the Franchisor, its officers, directors, shareholders, sales people, Area Developers, subsidiaries and affiliated companies and their shareholders, officers, directors, agents, employees and attorneys (in their respective capacity) and the Franchisee (and its owners and guarantors, if applicable) arising out of or related to: (1) this Agreement or any other agreement between the parties or any provision of such agreements; (2) the relationship of the parties hereto; (3) the validity of this Agreement or any other agreement between the parties or any provision of such agreements; or (4) any Licensed Method, shall be submitted for arbitration on demand of either party. Such arbitration proceedings shall be conducted in Denver, Colorado, and by one arbitrator chosen by the parties and experienced in franchise law. If the parties are unable to agree to the selection of an arbitrator within ten business days of the date of any written demand for arbitration made hereunder. The parties shall each select one arbitrator and the two selected arbitrators shall select a single arbitrator to hear the matter. The parties consent to the use of the services of Judicial Arbitration Group, Inc. or its successor or the American Arbitration Association to administer the arbitration. The arbitration shall be conducted in accordance with the then -current Commercial Arbitration Rules of the American Arbitration Association.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, Learningrx retains the right to pursue disputes regarding its trademarks through the judicial process rather than arbitration. Specifically, Learningrx is not obligated to use arbitration to enforce its rights related to trademarks or other intellectual property. This means that Learningrx can choose to take a franchisee directly to court over trademark or intellectual property disputes.
However, the document also states that except for those specific issues Learningrx chooses to litigate, all other controversies, disputes, or claims between Learningrx and the franchisee must be submitted for arbitration if either party demands it. This includes disputes relating to the franchise agreement itself, the relationship between Learningrx and the franchisee, the validity of the agreement, or any licensed method. The arbitration proceedings will be held in Denver, Colorado, and be overseen by an arbitrator experienced in franchise law. If the parties cannot agree on an arbitrator, each party will select one, and those two arbitrators will then select a single arbitrator to hear the case.
The document specifies that the parties consent to using the services of Judicial Arbitration Group, Inc., or its successor, or the American Arbitration Association to administer the arbitration, which will be conducted according to the American Arbitration Association's Commercial Arbitration Rules. This clause ensures a structured and regulated process for resolving disputes outside of court, except for those trademark and intellectual property disputes that Learningrx elects to pursue through the judicial system.
For prospective Learningrx franchisees, this means that while most disputes will be subject to arbitration, Learningrx retains the option to litigate trademark and intellectual property matters in court. Franchisees should be aware of this provision and understand the implications of potentially facing Learningrx in court for such disputes, while other types of disagreements would likely be handled through arbitration.