Does the LearningRx Guaranty cover indebtedness that may be barred by any statute of limitation?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
The word "indebtedness" is used herein in its most comprehensive sense and includes without limitation any and all advances, debts, obligations and liabilities of the Area Developer, now or hereafter incurred, either voluntarily or involuntarily, and whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, or whether recovery thereof may be now or hereafter barred by any statute of limitation or is otherwise unenforceable.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, the Learningrx Guaranty does cover indebtedness that may be barred by any statute of limitations. The guarantor(s) jointly and severally guarantee the area developer's full performance under the franchise agreement, including the payment of all indebtedness to Learningrx.
The FDD states that the definition of "indebtedness" is comprehensive, encompassing all debts and liabilities, whether current or future, voluntary or involuntary, due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined. Critically, this definition explicitly includes debts for which recovery may be barred by any statute of limitations.
This means that even if the statute of limitations has expired on a particular debt, the guarantor is still responsible for it under the terms of the Learningrx Guaranty. This is a significant commitment for the guarantor, as it extends their liability beyond the typical timeframe for debt collection. Prospective franchisees should carefully consider the implications of this broad definition of indebtedness and the waiver of defenses before signing the Guaranty.