What happens if a Learningrx franchisee is not current on payment obligations at the time of renewal notice?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.3 Right of Refusal to Grant Successor Term.
Franchisor may refuse, in Franchisor's sole discretion, to grant Franchisee's request for a Renewal Term if Franchisee:
- (d) is not current in payment obligations to Franchisor or its subsidiaries and affiliates and to trade creditors, landlords, or mortgage holders at the time Franchisee delivers its notice of renewal or on the date this Agreement is scheduled to expire unless Franchisee has a legitimate basis to dispute the claims of such persons and has made adequate reserves therefore.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, a franchisee's request for a renewal term may be refused if they are not current on their payment obligations. Specifically, Learningrx may refuse to grant a renewal term if the franchisee is not current in payment obligations to Learningrx or its subsidiaries and affiliates, as well as to trade creditors, landlords, or mortgage holders, either when the renewal notice is delivered or on the date the agreement is scheduled to expire.
However, there is an exception: Learningrx will consider a renewal request even if payments are not current, if the franchisee has a legitimate basis to dispute the claims and has made adequate reserves to cover the disputed amounts. This means a franchisee can still potentially renew their agreement if they have a valid reason for disputing the payments and have set aside sufficient funds to cover those potential liabilities.
This condition highlights the importance of maintaining good financial standing with Learningrx and all related parties. Franchisees should ensure timely payments to avoid jeopardizing their renewal options, or be prepared to demonstrate a legitimate dispute and adequate reserves if payment issues arise.