What is the Learningrx franchisee's obligation regarding health, workers' compensation insurance and unemployment insurance?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchisee fails to report as required or understates Gross Revenue by two percent (2%) or more for any reported time period, in which case Franchisee will pay the audit cost plus interest on understated costs of one percent (1%) per month. Franchisee must immediately pay to Franchisor all sums owed in addition to any other remedies provided in this Agreement or by law.
12. FRANCHISEE'S DUTIES
- 12.1 Compliance with Applicable Laws. Franchisee agrees to (i) comply with all applicable laws, ordinances and regulations or rulings, or licensing requirements, of every nature whatsoever which in any way regulate or affect the operation of its Business and to the care and safety of children, (ii) comply with all applicable educational and professional licensing requirements, (promptly all taxes and business expenses, unless Franchisee is legitimately disputing such matters and has adequately reserved therefor, and (iv) comply with all laws covering occupational hazards, accommodations for the disabled, including without limitation, the Americans with Disabilities Act, if applicable, health, workers' compensation insurance and unemployment insurance. If Franchisee does not obtain all required permits and licenses and other certifications necessary to operate the business and have all required professional and licensed personnel required by law or the Operations Manual to operate the Business, within six (6) months after Franchisee's execution of this Agreement, Franchisor may terminate this Agreement without providing the Franchisee notice or the opportunity to cure the default. Franchisee agrees, at its expense, to modify its Center, if necessary, to comply with any such applicable laws or regulations. Franchisee shall not engage in any activity or practice that results, or may reasonably be anticipated to result, in any public criticism of the System or any part thereof. At the end of each year of the term of this Agreement, Franchisee must submit to Franchisor a certified statement listing and describing all performance-based lawsuits or potential claims threatened or actually filed against Franchisee, its owners, managers, employees or agents in connection with the operation of the Business, or if no such lawsuits or claims are threatened or filed during that year, a certified statement to that effect.
- 12.2 System Compliance. Franchisee must comply with the System, the Operations Manual, systems, procedures and forms, as in effect from time to time. All mandatory, specifications, standards, and operating procedures prescribed by Franchisor in the Operations Manual, or otherwise communicated to Franchisee in writing, shall constitute provisions of this Agreement as if fully set forth herein.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, franchisees must comply with all applicable laws, ordinances, and regulations that affect their business operations. This includes adhering to laws covering occupational hazards, accommodations for the disabled (such as the Americans with Disabilities Act), health, workers' compensation insurance, and unemployment insurance.
Specifically, Learningrx franchisees are required to procure and pay for workers' compensation and unemployment insurance as mandated by state or federal law. Additionally, franchisees must maintain insurance policies as prescribed by Learningrx in the Operations Manual, using an insurance company acceptable to Learningrx, throughout the term of the agreement and any renewals. These insurance policies must include general liability, combined single limit, bodily injury, and property damage insurance for premises operations, products liability, and all other occurrences against claims of any person, employee, customer, or agent. The amount of coverage must not be less than the amount set forth in the Operations Manual and adjusted by Learningrx from time to time.
Furthermore, these insurance policies must insure both the franchisee and Learningrx, including its officers and directors, as additional named insureds against any liability arising from the franchisee's ownership, maintenance, or operation of the business. The policies must also stipulate that Learningrx receives a thirty (30) day prior written notice of cancellation. Franchisees are required to furnish Learningrx with original or duplicate copies of all insurance policies, certificates of insurance, or other proof of insurance acceptable to Learningrx, along with proof of payment, within thirty (30) days of issuance. Failure to obtain the required insurance and keep it in full force and effect constitutes a material breach of the Franchise Agreement, potentially leading to termination of the agreement by Learningrx.