If a Learningrx franchisee transfers to an entity they own, what activities must that entity confine itself to?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.5 Transfer to an Entity.
Notwithstanding the preceding section, Franchisee may Transfer its rights and obligations under this Agreement without Franchisor's consent, to an entity in which Franchisee owns one hundred percent (100%) of the outstanding stock, provided:
(a) Franchisee remains on the Agreement as a party and the entity is added as a coparty;
(b) Franchisee, or Franchisee's operational partner or Manager approved by Franchisor, continues to devote full time and best efforts to manage the daily operations of the Business;
(c) the entity's activities are confined exclusively to operating the franchised Business; and
(d) the entity assumes joint and several liability with Franchisee.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, a franchisee can transfer their rights and obligations to an entity they own 100% of without Learningrx's consent, provided certain conditions are met. One of these conditions is that the entity's activities must be confined exclusively to operating the franchised Learningrx business.
This means the entity cannot engage in any other business ventures or activities outside of running the Learningrx center. This restriction ensures that the entity's focus remains solely on the Learningrx franchise, maintaining brand consistency and operational standards.
Additionally, the franchisee must remain a party to the agreement, with the entity added as a co-party, and the franchisee (or an approved operational partner or manager) must continue to devote full-time effort to managing the daily operations. The entity must also assume joint and several liability with the franchisee, meaning both are responsible for all obligations under the franchise agreement.