Has the proposed registration of Learningrx franchises been withdrawn in any state?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
The following modifications are to the LearningRx Franchise Corporation Franchise Disclosure Document and may supersede, to the extent then required by valid applicable state law, certain portions of the Franchise Agreement and Area Development Agreement.
CALIFORNIA
The California Franchise Investment Law requires a copy of all proposed agreements relating to the sale of the franchise be delivered together with the Disclosure Document.
Neither the franchisor, nor any person or franchise broker in Item 2 of the FDD is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling such persons from membership in such association or exchange.
California Business and Professions Code sections 20000 through 20043 provide rights to the franchisee concerning termination, transfer or non-renewal of a franchise.
If the franchise agreement contains a provision that is inconsistent with the law, the law will control.
The franchise agreement provides for termination upon bankruptcy.
This provision may not be enforceable under federal bankruptcy law. (11 U.S.C.A.
Sec. 101 et seq.)
The franchise agreement contains a covenant not to compete which extends beyond the termination of the franchise.
This provision may not be enforceable under California law.
The franchise agreement contains a liquidated damages clause.
Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
The franchise agreement requires binding arbitration.
The arbitration will occur in Colorado with the costs being borne by both parties.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
The 2025 Learningrx Franchise Disclosure Document includes addenda that address specific state laws and regulations. For example, the document includes a Multi-State Addendum that modifies the standard franchise agreement to comply with the franchise laws of California. The addendum specifies that certain provisions, such as those related to termination upon bankruptcy or covenants not to compete, may not be enforceable under California law. These modifications ensure that the Learningrx franchise agreement adheres to local regulations, providing franchisees with the rights and protections mandated by state laws.
For franchisees in states like Virginia, Rhode Island, South Dakota, Ohio, Michigan, and Minnesota, the FDD includes specific addenda that address state-specific franchise laws. These addenda often relate to issues such as termination rights, waivers of claims, and choice of law provisions. For instance, the Virginia addendum clarifies that certain termination clauses may not be enforceable if they lack "reasonable cause" as defined by Virginia law. Similarly, the Rhode Island addendum voids any franchise agreement provisions that restrict jurisdiction or venue to a forum outside of Rhode Island.
In Ohio, the franchise agreement includes a disclaimer on the front page stating that the state has not reviewed or approved the business opportunity plan. This disclaimer also informs potential franchisees of their right to cancel the transaction within a specific timeframe. These state-specific addenda in the Learningrx FDD serve to inform franchisees of their rights and protections under local laws, ensuring compliance and transparency in the franchise relationship.
While the FDD includes addenda for several states, it does not explicitly state whether the registration of Learningrx franchises has been withdrawn in any specific state. The document focuses on modifications and disclosures necessary to comply with state laws, but it does not address any instances of registration withdrawal. A prospective franchisee should directly ask Learningrx whether it has withdrawn or been denied registration in any state.