What happens if a Learningrx franchisee fails to obtain the required insurance?

According to Learningrx's 2025 Franchise Disclosure Document, franchisees are required to maintain insurance policies as prescribed in the Operations Manual. This insurance must be kept in force at all times during the term of the Franchise Agreement and any renewals, using an insurance company acceptable to Learningrx. The coverage must include general liability, combined single limit, bodily injury and property damage insurance for premises operations, products liability, and all other occurrences against claims. The amount of coverage must be no less than the amount set forth in the Operations Manual and adjusted by Learningrx from time to time. Both the franchisee and Learningrx must be insured, and Learningrx must receive a 30-day prior written notice of cancellation.

If a Learningrx franchisee fails to obtain the required insurance and keep it in effect, Learningrx has the right to take action. First, Learningrx can demand that the franchisee pay the premium cost, which Learningrx will then forward to the insurance carrier. This means the franchisee will essentially be reimbursing Learningrx for the cost of obtaining the necessary insurance coverage on their behalf.

Importantly, the failure to obtain insurance constitutes a material breach of the Franchise Agreement. This gives Learningrx the right to terminate the agreement, meaning the franchisee could lose their franchise. This highlights the critical importance of maintaining the required insurance coverage to remain in compliance with the franchise agreement and avoid potential termination.