What is the role of the United States Small Business Administration (SBA) in the Learningrx franchise agreement?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
| Recitals. assisted financing. | Franchisor and Franchisee entered into a Franchise (or License) Agreement on (Franchise Agreement). The Franchisee agreed among other things to operate and maintain a franchise located at Franchisee has obtained from a lender a loan (Loan) in which funding is provided with the assistance of the United States Small Business Administration (SBA). SBA requires the execution of this Addendum as a condition for obtaining the SBA |
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| NOW, THEREFORE, in consideration of the mutual promises below, and for good and valuable considerations in hand paid by each of the parties to the others, the receipt and sufficiency of which the parties acknowledge, the parties agree as follows: | |
| • | The Franchise Agreement is in full force and effect, and Franchisor has sent no official notice of default to Franchisee under the Franchise Agreement that remains uncured on the date hereof. |
| • | Franchisor will not unreasonably withhold, delay or condition its consent to any proposed transfer or assignment by Franchisee which requires Franchisor's consent under Section 14.4 of the Franchise Agreement. |
| • | In the event of a disability or incompetency, the franchisee's representative will be able to transfer the franchise subject to the franchisor's consent which will not be unreasonably withheld. |
| • | This Addendum automatically terminates on the earliest to occur of the following: (i) a Termination occurs under the Franchise Agreement; (ii) the Loan is paid; or (iii) SBA no longer has any interest in the SBA financing. |
| year first above written. | IN WITNESS WHEREOF, the parties hereto have duly signed and executed this Addendum as of the day and |
| FRANCHISOR: | FRANCHISEE: By: By: Dean Tenpas, President |
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, the United States Small Business Administration (SBA) may play a role in financing a franchise. If a Learningrx franchisee obtains a loan with the assistance of the SBA, the SBA requires an addendum to the franchise agreement as a condition for obtaining the loan.
The addendum ensures that the original franchise agreement remains in full effect, provided Learningrx has not issued an uncured default notice to the franchisee. Learningrx also agrees not to unreasonably withhold or delay consent for any transfer or assignment of the franchise by the franchisee, as per Section 14.4 of the franchise agreement. Additionally, in the event of the franchisee's disability or incompetency, their representative can transfer the franchise, subject to Learningrx's consent, which will not be unreasonably withheld.
The addendum automatically terminates upon the earliest occurrence of (i) termination of the Franchise Agreement, (ii) repayment of the loan, or (iii) the SBA no longer having an interest in the financing. This indicates that the SBA's involvement is tied to the duration and status of the loan provided to the Learningrx franchisee. This addendum protects the interests of the SBA as a lender and ensures certain rights and flexibilities for the franchisee in specific circumstances, such as transfer or disability, while also safeguarding Learningrx's interests.