If a Learningrx franchisee transfers to an entity they own, is the franchisee still a party to the agreement?

According to Learningrx's 2025 Franchise Disclosure Document, a franchisee remains a party to the franchise agreement when transferring rights and obligations to an entity they own. Specifically, this applies when the franchisee owns 100% of the outstanding stock in the entity. In this scenario, the franchisee is not released from the agreement; instead, the entity is added as a co-party.

For a Learningrx franchisee to transfer their rights to an entity they control, several conditions must be met. First, the franchisee must continue to be a party to the agreement, with the entity becoming a co-party. Second, the franchisee, or their approved operational partner or manager, must continue to manage the daily operations of the Learningrx business full-time. Third, the entity's activities must be exclusively focused on operating the franchised Learningrx business. Finally, the entity must assume joint and several liability with the franchisee, meaning both are responsible for the obligations under the agreement.

This arrangement ensures that Learningrx maintains a direct relationship with the original franchisee, leveraging their experience and commitment while allowing the business to operate under a corporate structure. The joint and several liability provision protects Learningrx by ensuring that both the franchisee and the entity are accountable for fulfilling the terms of the franchise agreement. This type of transfer differs from a complete transfer to an unrelated third party, which would involve a new franchise agreement and associated transfer fees.