Can Learningrx require a transferee to execute a new franchise agreement?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
00), unless the transferee is: (i) a corporation, partnership, or limited liability company of which Franchisee is the majority stockholder, or a child, parent, sibling or spouse of Franchisee, in which case no Transfer Fee will be required, or (ii) another franchisee of LearningRx, in which case the Transfer Fee will be Five Thousand and 00/100 Dollars ($5,000.00). The Transfer Fee is fully earned upon payment and is non-refundable under any circumstances;
- (d) the proposed transferee executes a separate franchise agreement with Franchisor, using the then-current form of franchise agreement;
- (e) the proposed transferee pays for, attends, and satisfactorily completes the training program for new franchisees unless the transferee is a current franchisee or administrative staff member in good standing in the System that has already attended a full franchise training and met the current training requirements for a Center's staff;
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, Learningrx can require a transferee to execute a separate franchise agreement. Specifically, the document states that the proposed transferee must execute a separate franchise agreement with Learningrx, utilizing the then-current form of the franchise agreement. This stipulation ensures that the new franchisee is bound by the most up-to-date terms and conditions that Learningrx requires of its franchisees.
In addition to executing a new franchise agreement, the proposed transferee must also pay for, attend, and satisfactorily complete the training program for new franchisees. They are also responsible for paying an Initial Training and Materials Fee of $10,000 upon signing the franchise agreement, unless the transferee is another Learningrx franchisee, in which case the fee is reduced to $6,000. Furthermore, the individual proposed transferee, or the relevant parties of an entity transferee, must execute a personal guarantee to ensure the performance of the transferee's obligations.
These requirements ensure that any new franchisee coming into the Learningrx system meets the current standards and is fully trained and committed to operating the franchise according to Learningrx's guidelines. This protects the integrity of the Learningrx brand and the interests of other franchisees within the system. A prospective franchisee should carefully consider these requirements and associated costs when planning for a transfer.