If Learningrx prevails in part in a legal proceeding, are they entitled to recover legal fees?

According to the 2025 Learningrx Franchise Disclosure Document, Section 18.7, titled 'Legal Costs,' addresses the recovery of legal fees in the event of a legal proceeding. It states that if either party initiates a legal proceeding in a court of law with valid jurisdiction and prevails entirely or in part against the other party based on the terms of the agreement, the prevailing party is entitled to recover reasonable attorneys' fees, court costs, and all expenses related to the legal action from the losing party, in addition to any judgment. This clause applies to actions at law or in equity. However, this section does not apply to arbitration, as detailed in Section 16 of the agreement, where each party agrees to bear their own legal costs and expenses.

For a prospective Learningrx franchisee, this means that if they are involved in a legal dispute with Learningrx and the franchisee prevails, even partially, in court, Learningrx will be responsible for covering the franchisee's reasonable attorney's fees, court costs, and other related expenses. Conversely, if Learningrx prevails in a legal dispute against the franchisee, the franchisee would be responsible for Learningrx's legal costs. This provision aims to protect the prevailing party and ensure they are not unduly burdened by the financial costs of litigation.

However, it's important to note that this clause specifically excludes arbitration. In the event of a dispute that goes to arbitration, both Learningrx and the franchisee will be responsible for their own legal costs, regardless of who prevails. This distinction between litigation and arbitration is a significant factor for a prospective franchisee to consider, as it can impact the overall cost of resolving disputes. Franchisees should carefully review Section 16 of the Learningrx franchise agreement to fully understand the arbitration process and its implications for legal costs.