What rights has the Franchisor granted to the Franchisee regarding the Learningrx business?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
hisee upon expiration of this Agreement shall be deemed to take effect upon termination of the Interim Period. In addition, Franchisee acknowledges that Franchisee is obligated to pay the Interim Period Fee (as defined below) for each month during any Interim Period. The Interim Period Fee will be in addition to all other fees and costs payable by Franchisee pursuant to this Agreement.
4. TERRITORY
- 4.1 Location. Franchisee may operate the franchised Business only at the Premises as designated in Attachment I to this Agreement. Franchisee may not relocate the Premises without Franchisor's prior written approval, which may be withheld for any reason. Franchisee must maintain a physical location for the Center at all times.
- 4.2 Territory. During the term of this Agreement and any extensions, neither Franchisor nor its affiliates will own, operate or franchise a fixed location for the operation of any other Center within your Territory as designated in Attachment I to this Agreement. Franchisee will also have the right to service any persons in the Territory, regardless of the method of sales, subject to Franchisor's express reservation of rights set forth in Section 4.5. Once established, the boundaries of Franchisee's Territory will not be adjusted by Franchisee without Franchisor's written consent regardless of whether the population of Franchisee's Territory increases or decreases over time. Notwithstanding the foregoing, Franchisee acknowledges that prior to the term of this Agreement, Franchisor or its affiliate may have licensed to a third-party the right to use the System and/or Marks to operate a business that may be similar to the LearningRx Center operated by Franchisee under this Agreement pursuant to a PACE license or a Clinical license in a portion of Franchisee's Territory. The pre-existing PACE licensee and/or Clinical licensee has the right to continue to operate the business per the PACE license and/or Clinical license in the portion of Franchisee's Territory and such ongoing use will not constitute a breach of this Agreement, including this Section 4.02 or an Area Developer Agreement, if any.
- 4.3 Soliciting Outside the Territory. Subject to the requirements of Sections 9.1 and 9.2, Franchisee may not, without the express written permission of Franchisor, place advertising targeted primarily to another territory unless the advertising is done as part of a cooperative effort with the Franchisee in the targeted territory
- 4.4 Minimum Annual Revenue Quota. In order to maintain the Territory, Franchisee must maintain a Minimum Annual Revenue Quota ("Minimum Annual Revenue Quota"), starting six (6) months after opening in the amount of Fifty thousand and 00/100 Dollars ($50,000.00) for every one hundred, thousand (100,000) people (or pro-rated portion of one hundred, thousand (100,000)) in the Territory for the first twelve (12) months, Seventy-Five thousand and 00/100 Dollars ($75,000.00) for every one hundred, thousand (100,000) people (or pro-rated portion of one hundred, thousand (100,000)) in the Territory for the second (2nd) twelve (12) months and One hundred, thousand and 00/100 Dollars ($100,000.00) for every one hundred, thousand (100,000) people (or pro-rated portion of one hundred, thousand (100,000)) in the Territory for any twelve (12) month period thereafter in the Territory. Franchisee's failure to maintain the Minimum Annual Revenue Quota may result in loss of exclusivity for
the territory or the reduction or elimination of the Franchisee's Territory, or the termination of this Agreement, in Franchisor's sole discretion.
- 4.5 Reservation of Rights. Franchisee acknowledges that the Franchise granted hereunder is non-exclusive and that Franchisor and its Affiliates retain the exclusive right, among others:
- (a) to own, use, operate and to license and Franchise others to use, the Marks and System for the operation of LearningRx Centers at any location other than in the Territory, regardless of proximity to the Territory;
- (b) to use and Franchise the use of trademarks or service marks other than the Marks, whether in alternative channels of distribution or at any location including the Territory, except for products provided "trainer to student," in association with operations that are similar to or different than the LearningRx Center;
- (c) to offer the services or products, or grant others the right to offer the services or products, whether using the Marks or other trademarks or service marks, except products provided "trainer to student", through alternative channels of distribution, including without limitation, retail locations and other channels of distribution (other than LearningRx Centers) such as stores, shops, kiosks, malls, airports, and college campuses, at special events and other channels of distribution such as television, mail order, catalog sales, wholesale to unrelated retail outlets, or over the Internet, whether inside or outside the Territory;
- (d) to any websites utilizing a domain name incorporating the word "LEARNING" or "RX" or similar derivatives thereof. Franchisor retains the sole right to market on the Internet and use the Marks on the Internet, including all use of websites, social networking sites, domain names, URL's, directory addresses, metatags, linking, advertising, and co-branding and other arrangements. Franchisee may not independently market on the Internet, or use any domain name, social networking site, address, locator, link, metatag, or search technique, with words or symbols similar to the Marks or otherwise establish any presence on the Internet without Franchisor'
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, franchisees are granted the right to operate a Learningrx business within a specific territory. The franchisee's territory is designated in an attachment to the franchise agreement, and Learningrx agrees not to operate or franchise another fixed location within that territory during the agreement's term. Franchisees also have the right to service anyone within their territory, regardless of the sales method, although Learningrx retains specific rights as outlined in the agreement. Franchisees must operate the business only at the designated premises and cannot relocate without Learningrx's prior written approval.
However, franchisees must get Learningrx's permission to target advertising primarily to another territory unless it's a cooperative effort with the franchisee in that territory. Also, Learningrx may have pre-existing agreements with PACE or Clinical licensees operating in the franchisee's territory, which do not constitute a breach of the agreement. The franchisee is generally responsible for selecting a site for the business, but Learningrx will provide limited advice and assistance. Learningrx has the right to reject any proposed location, although consent will not be unreasonably withheld. The location of the center should be close to the center of the territory, as it is considered a factor in the business's potential success.
Furthermore, franchisees acknowledge that operating a Learningrx franchise involves business risk and depends largely on their abilities as independent businesspersons. They must also comply with data protection requirements for customer data as outlined in the Operations Manual and Franchise Agreement, including all applicable privacy laws. Franchisees must also cooperate with Learningrx to ensure compliance with these laws and notify Learningrx of any security incidents. These rights are subject to Learningrx's reserved rights and the franchisee's compliance with the franchise agreement and operating procedures.