In Learningrx franchise disputes, is there a requirement to attempt mediation before arbitration?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
10. DISPUTE RESOLUTION
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. The arbitrator will have the right to award any proper relief, including money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief and attorneys' fees and costs.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
The 2025 Learningrx Franchise Disclosure Document does not explicitly state that mediation is required before arbitration. However, it does outline the arbitration process. Learningrx has the right to enforce the agreement through judicial processes to protect its trademarks, intellectual property, and security interests, and to pursue rights under leases, subleases, sales, promissory notes, purchases, security agreements, and covenants not to compete.
According to the FDD, all controversies, disputes, or claims between Learningrx and the franchisee related to the agreement, the relationship of the parties, the validity of the agreement, or any Licensed Method, must be submitted for arbitration if either party demands it. The arbitration proceedings will occur in Denver, Colorado, with one arbitrator chosen by both parties who is experienced in franchise law.
If the parties cannot agree on an arbitrator within ten business days of a written demand for arbitration, each party will select an arbitrator, and those two arbitrators will then select a single arbitrator to hear the matter. The parties agree to use 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. The arbitrator can award any proper relief, including money damages, specific performance, injunctive relief, and attorneys' fees and costs.