What standards must a transferee meet to be approved by Learningrx?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
proposed transferee pays an Initial Training and Materials Fee of Ten Thousand and 00/100 Dollars ($10,000.00) upon the signing of the separate franchise agreement with Franchisor, unless the transferee is another franchisee of LearningRx, in which case the Initial Training and Materials Fee will be Six Thousand and 00/100 Dollars ($6,000.00). The Initial Training and Materials Fee is fully earned upon payment and is non-refundable under any circumstances;
- (g) the individual proposed transferee, or the stockholders, partners, members, or trustees and beneficiaries of a proposed entity transferee, each execute a personal guarantee, jointly and severally guaranteeing the performance of the proposed transferee's obligations;
- (h) the proposed transferee demonstrates to Franchisor's satisfaction that it, in all respects, meets Franchisor's standards applicable to new franchisees regarding experience, personal and financial reputation and stability, willingness and ability to devote his or her full time and best efforts to the operation of the franchised Business, and any other conditions as Franchisor may reasonably apply in evaluating new franchisees. Franchisor must be provided all information about the proposed transferee as it may reasonably require. Because of the confidential information available to a franchisee, no assignment to a competitor of the System will be permitted, and;
- (i) in the event the proposed transfer is the result of the introduction from a third-party broker, Franchisee or the transferee will be solely responsible for payment of such brokerage commissions, and all such commissions must be paid in full before the transfer is deemed effective by Franchisor.
- (j) Anything to the contrary notwithstanding, if the proposed Transfer is (i) of a noncontrolling interest in Franchisee (and is not one of a series of Transfers which, in the aggregate with other Transfers, would constitute or result in the transfer of a controlling interest in Franchisee) and the Transfer is to one of Franchisee's owners listed in Attachment V, an immediate family member of one of Franchisee's owners listed in Attachment V; (ii) of a controlling interest in Franchisee and solely among Franchisee's owners listed in Attachment V;
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, a proposed transferee must meet several standards to be approved. The transferee must demonstrate to Learningrx's satisfaction that they meet the standards applicable to new franchisees regarding experience, personal and financial reputation and stability. They must also show a willingness and ability to devote full time and effort to operating the franchised Learningrx business, along with meeting any other conditions Learningrx may reasonably apply when evaluating new franchisees.
Additionally, the individual proposed transferee, or the relevant parties of an entity transferee, must execute a personal guarantee, jointly and severally guaranteeing the performance of the proposed transferee's obligations. Learningrx requires that they be provided with all information about the proposed transferee as it may reasonably require. No assignment to a competitor of the Learningrx system is permitted due to the confidential information available to a franchisee.
Furthermore, the franchisee must settle all outstanding accounts with Learningrx, and both the franchisee and every principal of the franchisee's entity must execute a general release of Learningrx and all principals of Learningrx from all claims. The proposed transferee must also pay a transfer fee. The standard transfer fee is $10,000, but it is reduced to $5,000 if the transferee is another Learningrx franchisee. No transfer fee is required if the transfer is to a corporation, partnership, or limited liability company where the franchisee is the majority stockholder, or to a child, parent, sibling, or spouse of the franchisee.
Finally, the proposed transferee must execute a separate franchise agreement with Learningrx, using the then-current form. They must also pay for, attend, and satisfactorily complete the training program for new franchisees, unless they are a current franchisee or administrative staff member in good standing who has already completed the training. The transferee must pay an Initial Training and Materials Fee of $10,000 upon signing the franchise agreement, which is reduced to $6,000 if the transferee is another Learningrx franchisee.