What happens if a new director comes in due to the transfer of a Learningrx Center?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
hisor and its affiliates, officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances;
- D. The transferee must enter into a written assignment, under seal and in a form satisfactory to Franchisor, assuming and agreeing to discharge all of the Area Developer's obligations under the relevant franchise agreements and, if deemed necessary by Franchisor, the transferee's principals, individually, shall guarantee the performance of all such obligations in writing in a form satisfactory to Franchisor;
- E. The transferee must demonstrate to Franchisor's satisfaction that the transferee meets Franchisor's educational, managerial and business standards; possesses a good moral character, business reputation and credit rating; has the aptitude and ability to operate the Centers (as may be evidenced by prior related experience or otherwise); has at least the same managerial and financial acumen required of new Area Developers and shall have sufficient equity capital, as determined by Franchisor in Franchisor's sole discretion, to operate the Centers;
- F. At Franchisor's option, the transferee must execute or, upon Franchisor's request, shall cause all interested parties to execute, for a term ending on the expiration date of the franchise agreement(s) and with such renewal term as may be provided by the franchise agreement(s), the standard form of franchise agreement then being offered to new Area Developers and such other ancillary agreements as Franchisor may require for the Centers, which agreements shall supersede the franchise agreements between the Area Developer and Franchisor in all respects and the terms of which agreements may materially differ from the terms of the franchise agreements, including, without limitation, the implementation of other fees and different royalty rates;
- 7.04. Liability. The Area Developer and its principals must remain liable for all direct and indirect obligations to Franchisor in connection with the Centers prior to the effective date of transfer and will continue to remain responsible for their obligations of nondisclosure, noncompetition and indemnification as provided in the franchise agreements and guaranty, and shall execute any and all instruments reasonably requested by Franchisor to further evidence such liability; and
- 7.05. Transfer Fee. No Transfer Fee is required if Franchisee transfers its Center to a corporation in which it is the majority stockholder, or if Franchisee transfers the Center to its child, parent, sibling, or spouse with Franchisor approval. The transferee must pay a Transfer Fee of
Five thousand and 00/100 Dollars ($5,000.00), if its Center is transferred to another LearningRx Franchisee. In all other cases, the transferee must pay a Transfer Fee of Ten thousand and 00/100 Dollars ($10,000.00) which includes the initial training at Franchisor's office, onsite training, advanced consultation training onsite/grand opening, and legal fees.
7.06. Right of First Refusal.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, if a Learningrx center is transferred, the proposed transferee, which could include a new director, must meet several requirements. The transferee must demonstrate that they meet Learningrx's educational, managerial, and business standards, and possess a good moral character, business reputation, and credit rating. They also need to show that they have the aptitude and ability to operate the Centers, evidenced by prior related experience or other means, and have sufficient equity capital.
Additionally, the transferee may need to execute Learningrx's standard form of franchise agreement, which could have materially different terms, including other fees and different royalty rates. The transferee must also enter into a written assignment agreeing to discharge all of the Area Developer's obligations under the relevant franchise agreements. The transferee might also need to have their principals individually guarantee the performance of these obligations in writing.
Furthermore, the proposed transferee must pay for, attend, and satisfactorily complete the training program for new franchisees. However, this is not required if the transferee is a current franchisee or administrative staff member in good standing within the Learningrx system who has already attended a full franchise training and met the current training requirements for a Center's staff. The transferee may also have to pay an Initial Training and Materials Fee, which is $10,000 unless the transferee is another Learningrx franchisee, in which case the fee is $6,000.00.
Finally, the Area Developer must not be in default of any provisions of their franchise agreements and must execute a general release of Learningrx from all claims. These conditions ensure that any new director or transferee meets Learningrx's standards and is fully trained and financially capable of operating the center.