In Michigan, does Learningrx have a right of first refusal to purchase the assets of a Learningrx franchise?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.7 Right of First Refusal. Franchisee grants Franchisor the right to purchase the Business on the same terms and conditions specified in a bona fide written offer from a qualified third-party. Within seven (7) days after receipt of the bona fide offer acceptable to Franchisee to transfer all or part of the Business, Franchisee must forward a signed copy of the written offer to Franchisor. Franchisor will then have access to all Franchisee's Business Records in order to evaluate the offer and may purchase the Business upon notification to Franchisee within thirty (30) days.
- 14.8 Election of Right/Set Offs. If Franchisor elects to exercise its option to purchase under this Agreement, Franchisor will have the right to set off against any payment all amounts due from Franchisee under this Agreement.
- 14.9 Rights After Refusal. If Franchisor does not exercise its right to purchase within the required timeframe, Franchisee may transfer the Business to the third-party, but not at a lower price or on more favorable terms than disclosed to Franchisor in writing. Such transfer remains subject to Franchisor's prior written approval and other conditions specified in this Agreement. If Franchisor does not transfer the franchised Business to the transferee on the same terms offered to Franchisor, then Franchisee must again extend the right of first refusal to Franchisor in the manner described above, before another desired transfer.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, there is an addendum that pertains to franchisees in Michigan. However, the document does not specify whether Learningrx has a right of first refusal to purchase the assets of a Learningrx franchise in Michigan.
The FDD does state that Learningrx has a right of first refusal to purchase the business if a franchisee receives a bona fide written offer from a qualified third party. The franchisee must provide Learningrx with a signed copy of the offer within seven days, and Learningrx then has access to the franchisee's business records to evaluate the offer. Learningrx has 30 days to notify the franchisee if it will purchase the business based on the terms of the offer.
If Learningrx declines to exercise its right of first refusal within the specified timeframe, the franchisee may proceed with the transfer to the third party. However, the transfer cannot be at a lower price or on more favorable terms than what was initially disclosed to Learningrx. The transfer is still subject to Learningrx's prior written approval and other conditions outlined in the agreement. If the terms of the transfer change, the franchisee must again extend the right of first refusal to Learningrx before proceeding with another transfer.