Does Learningrx require franchisee permission to assign or transfer the franchise agreement to another party?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
the Franchise Agreement is terminated, Franchisee may do so only until the client's prepaid or monthly payment for current program is complete. Notwithstanding the foregoing, once a client's then-current prepaid monthly program concludes, Franchisee will cease using Franchisor's Program for that client. If Franchisor grants this continuing right, Franchisee agrees that Franchisor's audit rights will survive termination of the Agreement.
14. TRANSFER
- 14.1 Prohibited Acts. Any unauthorized Transfer or other conveyance, by operation of law or otherwise, or any attempt to do so, shall be deemed void, a breach of this Agreement, and grounds for termination of this Agreement by Franchisor.
- 14.2 Transfer by Franchisor. Franchisor's obligations under this Agreement are not personal, and Franchisor can unconditionally assign and transfer, in its sole and absolute discretion, this Agreement to another person or business entity at any time. Franchisor does not need permission of Franchisee for the transfer and may transfer free of any responsibility or liability whatsoever to the Franchisee, provided the transferee assumes the Franchisor's material obligations. Franchisor may also:
- (a) sell or issue its stock, other ownership interests, or assets, whether privately or publicly;
- (b) merge with, acquire, or be acquired by another entity, including an entity that competes directly with Franchisee; or
- (c) undertake a refinancing, recapitalization, leveraged buyout, or other economic or financial restructuring.
- 14.3 Transfer by Franchisee. Franchisee's obligations under this Agreement are personal and may not be voluntarily or involuntarily sold, pledged, assigned, transferred, shared, subdivided, sub franchised, encumbered or transferred in any way without the prior express written approval of Franchisor.
- 14.4 Conditions for Transfer. No Transfer of this Agreement will be approved by Franchisor or be effective unless and until:
- (a) Franchisee is under no material default in the performance or observance of any of its obligations under this Agreement and Franchisee is under no material default that materially impairs or detracts from the goodwill or brand under any other agreement with Franchisor at the time Franchisee requests permission to transfer the Business or at the time of the transfer;
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, franchisees need prior express written approval from Learningrx to transfer their franchise. Specifically, franchisees cannot voluntarily or involuntarily sell, pledge, assign, transfer, share, sub-franchise, encumber, or transfer the franchise in any way without this approval. Any unauthorized transfer is considered a breach of the agreement and can lead to termination of the agreement by Learningrx.
Learningrx, however, has the right to transfer the agreement to another person or business entity at any time without the franchisee's permission. This transfer is at Learningrx's sole and absolute discretion, provided the transferee assumes Learningrx's material obligations. Learningrx can also sell stock, merge with another entity, or undergo financial restructuring without needing the franchisee's consent.
There are specific conditions that must be met before Learningrx approves a transfer from the franchisee. The franchisee must not be in any material default in their performance or observance of the agreement's terms. Additionally, the franchisee must settle all outstanding accounts with Learningrx and execute a general release of Learningrx from all claims. The proposed transferee must also meet certain requirements, including paying a transfer fee, executing a franchise agreement with Learningrx, completing the training program, and providing a personal guarantee. The transfer fee is $10,000, but it is reduced to $5,000 if the transfer is to another Learningrx franchisee. No transfer fee is required if the transfer is to a corporation where the franchisee is the majority stockholder, or to a child, parent, sibling, or spouse of the franchisee.