What happens to the remaining monetary judgment of $4,000,000 against Learningrx after the initial settlement payment?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
n No. 1:16-cv-01159 (D. CO)* (May 24, 2016) ("Action"). The Federal Trade Commission ("FTC") Action alleges certain unsubstantiated claims were made about the benefits of the LearningRx brain training programs. LearningRx vigorously disputes the FTC's allegations. Nevertheless, to avoid the time, expense, and uncertainty of litigation, we determined it was in the best interest of LearningRx Franchise Corp. and the LearningRx franchise system to settle our differences with the FTC. Therefore, we entered into a Stipulated Final Judgment and Order for Permanent Injunction and Other Equitable Relief Against Defendants LearningRx Franchise Corp. and Ken Gibson, which became effective on May 24, 2016 ("Settlement Agreement"). In its principal parts, the Settlement Agreement requires: (1) randomized controlled trials, or RCTs, to support cognitive training-related claims of improved performance at work or in athletics; delay of or protection against age-related decline in memory or other cognitive function; and reduction in cognitive impairment or improvement in cognitive function of individuals with health conditions, including attention deficit hyperactivity disorder (ADHD), autism, traumatic brain injury (TBI), or stroke; (2) competent and reliable scientific evidence for all other claims of performance, benefits, or efficacy associated with cognitive training; (3) accurate representation of the existence, contents, validity, results, conclusions, or interpretations of tests, studies, or research, including that the benefits of cognitive training are scientifically proven; and (4) a settlement payment of $200,000, upon which the remainder of the monetary judgment entered in the Action ($4,000,000) will be suspended. The Settlement Agreement also contains standard compliance reporting and recordkeeping requirements. In compliance with the terms of the Settlement agreement, LearningRx has completed 20 plus studies including randomized controlled trials to meet new FTC regulations.
Source: Item 3 — LITIGATION (FDD page 12)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, Learningrx entered into a Settlement Agreement with the FTC which became effective May 24, 2016. The agreement addresses concerns raised in the FTC's Action regarding unsubstantiated claims about the benefits of Learningrx's brain training programs. While Learningrx disputes these allegations, it chose to settle to avoid further expenses and uncertainty.
As part of the Settlement Agreement, Learningrx is required to meet certain conditions regarding claims related to cognitive training. These conditions include supporting claims of improved performance with randomized controlled trials (RCTs) and having competent and reliable scientific evidence for all other claims. Learningrx must also accurately represent the results of any tests or studies.
Furthermore, the Settlement Agreement includes a settlement payment of $200,000. Upon this payment, the remaining monetary judgment of $4,000,000 entered in the Action will be suspended. Learningrx has also completed over 20 studies, including randomized controlled trials, to meet the new FTC regulations outlined in the agreement.