Does Learningrx have a right of first refusal to purchase a franchise?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
equired if Franchisee transfers its Center to a corporation in which it is the majority stockholder, or if Franchisee transfers the Center to its child, parent, sibling, or spouse with Franchisor approval. The transferee must pay a Transfer Fee of
Five thousand and 00/100 Dollars ($5,000.00), if its Center is transferred to another LearningRx Franchisee. In all other cases, the transferee must pay a Transfer Fee of Ten thousand and 00/100 Dollars ($10,000.00) which includes the initial training at Franchisor's office, onsite training, advanced consultation training onsite/grand opening, and legal fees.
7.06. Right of First Refusal. If Area Developer or its principals shall at any time determine to sell, transfer or otherwise dispose of all or part of the rights under this Agreement or an ownership interest in Area Developer, and Area Developer or its principals shall obtain a bona fide, executed written offer from a responsible and fully disclosed purchaser, Area Developer shall notify Franchisor in writing of each such offer, and Franchisor has the right and option, exercisable within a period of thirty (30) days from the date of delivery of such offer, by written notice to Area Developer or its owners, to purchase the rights under this Agreement or such ownership interest for the price and on the terms and conditions contained in said purchaser's offer. If Franchisor does not exercise its right of first refusal, Area Developer or its principals may complete the sale of Area Developer or such ownership interest, subject to Franchisor's approval of the purchaser and all other conditions set forth in this Section 7.6, provided that if such sale is not completed within one hundred twenty (120) days after delivery of such offer to Franchisor or if there is a material change in the terms of the sale (which Area Developer shall promptly communicate to Franchisor), Franchisor shall again have the right of first refusal herein provided. In the event that the Area Developer wishes to publicly offer its shares in any partnership or corporation which has an ownership interest in the Area Developer, said public offering shall be subject to the approval of Franchisor, such approval to not be unreasonably withheld.
7.07. Entity Ownership. If the Area Developer is a corporation, partnership, limited liability company, or any other form of business or association ("Entity"), each shareholder, member, manager, or partner ("Controlling Person") which is granted the rights to serve as the Area Developer hereunder shall be a party to a shareholders agreement, operating agreement, or partnership agreement which shall provide, among other things, that upon any dissolution of the Entity, or upon any divorce decree among the parties who are also Controlling Persons, that ownership of the shares, membership interest, or partnership interest shall be transferred to the Controlling Person for agreed upon consideration, which has primary responsibility for sales and marketing activities, typically the president, following any such dissolution or decree. The form and content of the shareholders agreement, operating agreement, or partnership agreement must be approved by Franchisor prior to execution.
8. CONFIDENTIALITY
8.01. Scope.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, Learningrx has a right of first refusal to purchase a franchise under certain conditions. Specifically, if a franchisee receives a legitimate written offer from a qualified third party to buy all or part of the business, the franchisee must provide Learningrx with a signed copy of the offer.
Learningrx then has the right to access all of the franchisee's business records to evaluate the offer. Learningrx can then choose to purchase the business on the same terms and conditions as the third-party offer by notifying the franchisee within 30 days. If Learningrx decides to purchase the franchise, it has the right to offset any amounts owed by the franchisee against the purchase price.
However, if Learningrx declines to exercise its right of first refusal within the specified timeframe, the franchisee is then permitted to transfer the business to the third party. This transfer must be on the same terms that were originally disclosed to Learningrx. The transfer is still subject to Learningrx's prior written approval and other conditions outlined in the agreement. If the sale to the third party does not occur on the same terms initially offered to Learningrx, the franchisee must again extend the right of first refusal to Learningrx before proceeding with another transfer offer.
Additionally, if an Area Developer wishes to sell, transfer, or dispose of rights under their agreement or an ownership interest, Learningrx also has a right of first refusal. The Area Developer must notify Learningrx in writing of any bona fide offer from a purchaser. Learningrx then has 30 days to exercise its option to purchase the rights or ownership interest at the price and terms of the offer. If Learningrx does not exercise this right, the Area Developer may proceed with the sale, subject to Learningrx's approval of the purchaser and other conditions. This right is contingent on the sale being completed within 120 days of the offer to Learningrx and without material changes to the terms.