Does the section regarding legal costs apply to Learningrx arbitrations?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.7 Legal Costs.
If either party institutes a legal proceeding in a court of law with valid jurisdiction and prevails entirely or in part in any action at law or in equity against the other party based entirely or in part on the terms of this Agreement, the prevailing party shall be entitled to recover from the losing party, in addition to any judgment, reasonable attorneys' fees, court costs and all of the prevailing party's expenses in connection with any action at law.
This section shall not apply to arbitration as more fully set forth in Section 16 of this Agreement.
The parties agree to each bear their own legal costs and other expenses incurred as part of any arbitration conducted in accordance with this Agreement.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, the section regarding legal costs does not apply to arbitrations. The document states that in legal proceedings, the prevailing party is entitled to recover reasonable attorneys' fees, court costs, and expenses from the losing party. However, this condition does not extend to arbitration cases.
Instead, the Learningrx franchise agreement stipulates that in arbitration, each party will bear their own legal costs and expenses. This means that regardless of the outcome of the arbitration, both Learningrx and the franchisee are responsible for covering their own legal fees.
For a prospective Learningrx franchisee, this is an important consideration. It implies that even if you win an arbitration case against Learningrx, you will not be able to recover your legal costs from them. This could make arbitration a more expensive option compared to other forms of dispute resolution, as you would need to factor in the potential cost of legal representation without the possibility of reimbursement.