Does the Learningrx franchisor have to select the 'best' option when exercising reasonable business judgement?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee is solely responsible for locating a site for the Business and negotiating a lease for the property.
Upon request, Franchisor will provide limited advice and assistance to Franchisee in selecting a site and analyzing a location and in negotiating a lease.
Franchisor will analyze a location by examining population density, traffic patterns, proximity of the proposed location to any other LearningRx Centers, or any other reasonable criteria, as set forth in Section 10.2.
Franchisee agrees that the location of the Center is a factor in the potential for success of the Business and the location will be located close to the Center of the Territory.
Franchisor may reject any location in its discretion, but consent will not be unreasonably withheld.
If Franchisee and Franchisor cannot agree on the site selection, then Franchisee must select two (2) alternative sites.
Franchisor shall provide Franchisee with an evaluation of each site as described above.
Franchisor shall approve or disapprove Franchisee's proposed site within thirty (30) days of the date Franchisor receives written notice of the proposed site from Franchisee.
Any site not approved in writing by Franchisor within the thirty (30) day time period shall be deemed disapproved.
However, Franchisor's assistance in no way constitutes a representation or warranty with respect to the property or the lease.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
The 2025 Learningrx Franchise Disclosure Document does not specify that Learningrx must select the 'best' option when exercising reasonable business judgment. However, it does state that Learningrx may reject a proposed site for a new franchise location, but that such consent will not be unreasonably withheld.
Specifically, the franchisee is responsible for finding a location for their Learningrx center and negotiating the lease. Learningrx will provide limited advice and assistance in site selection and analyzing the location, considering factors like population density, traffic patterns, and proximity to other Learningrx centers. If the franchisee and Learningrx cannot agree on a site, the franchisee must propose two alternative sites for Learningrx to evaluate.
Learningrx has 30 days to approve or disapprove a proposed site after receiving written notice from the franchisee. Failure to provide written approval within this timeframe is considered a disapproval. However, the FDD explicitly states that Learningrx's assistance in site selection does not constitute a representation or warranty regarding the property or lease. This process ensures that Learningrx maintains some control over site selection without guaranteeing the success of the location.