If Learningrx elects to purchase the business, what right does Learningrx have regarding amounts due from the franchisee?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.14 Set Off. Franchisee may not set off any amounts owed to Franchisor under this Agreement nor may Franchisee withhold any amounts owed to Franchisor due to any alleged non-performance by Franchisor under this Agreement. Franchisee waives any right to set off.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, a franchisee is not allowed to offset any amounts owed to Learningrx. This means the franchisee cannot deduct any money from what they owe Learningrx, even if they believe Learningrx has not performed its obligations under the Franchise Agreement. The franchisee also waives any right to make such deductions.
This clause protects Learningrx's revenue stream by ensuring that franchisees cannot withhold payments due to disputes or perceived failures on Learningrx's part. It places the onus on the franchisee to resolve disputes separately without interrupting the regular payment schedule.
For a prospective Learningrx franchisee, this means understanding that any disagreements or claims against Learningrx must be handled independently of their payment obligations. Failure to pay the required fees, even if the franchisee believes Learningrx is in breach of contract, could lead to further penalties or legal action. This is a fairly standard clause in franchise agreements, designed to maintain consistent revenue flow for the franchisor.