Does Learningrx have to remain liable to the franchisee after transferring the agreement?

According to Learningrx's 2025 Franchise Disclosure Document, in the event of an approved transfer of the franchise interest or any portion thereof, the transferor will not be liable for the actions of the transferee franchisee. This means that once a Learningrx franchisee successfully transfers their franchise to a new owner with Learningrx's approval, the original franchisee is generally released from liability for the new owner's actions. This provides a clean break for the seller, allowing them to exit the business without ongoing concern for how the new owner operates the franchise. However, it is important to note that this release of liability applies specifically to the actions of the transferee franchisee, implying the original franchisee remains responsible for their own actions and obligations up to the point of transfer.

This clause protects the original Learningrx franchisee from future liabilities arising from the new franchisee's management. However, the original franchisee must ensure all their own obligations are fulfilled before the transfer is complete. This includes settling outstanding accounts with Learningrx and executing a general release of Learningrx from all claims.

This condition is fairly standard in franchising, as it facilitates the transfer of ownership while protecting both the franchisor and the previous franchisee. A prospective Learningrx franchisee should carefully review the transfer agreement to fully understand the conditions and ensure compliance to avoid any lingering liabilities after the transfer.