Under what condition can Learningrx convey, assign, or transfer its contractual obligations to the franchisee?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.01. By Franchisor. Franchisor shall have the absolute right to transfer or assign all or any part of its rights or obligations hereunder to any person or legal entity which assumes its obligation under this Agreement and Franchisor shall thereby be released from any and all further liability to Area Developer.
- 14.2 Transfer by Franchisor. Franchisor's obligations under this Agreement are not personal, and Franchisor can unconditionally assign and transfer, in its sole and absolute discretion, this Agreement to another person or business entity at any time. Franchisor does not need permission of Franchisee for the transfer and may transfer free of any responsibility or liability whatsoever to the Franchisee, provided the transferee assumes the Franchisor's material obligations. Franchisor may also:
- (a) sell or issue its stock, other ownership interests, or assets, whether privately or publicly;
- (b) merge with, acquire, or be acquired by another entity, including an entity that competes directly with Franchisee; or
- (c) undertake a refinancing, recapitalization, leveraged buyout, or other economic or financial restructuring.
- 14.3 Transfer by Franchisee. Franchisee's obligations under this Agreement are personal and may not be voluntarily or involuntarily sold, pledged, assigned, transferred, shared, subdivided, sub franchised, encumbered or transferred in any way without the prior express written approval of Franchisor.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, Learningrx has the right to transfer or assign its rights and obligations under the franchise agreement. Learningrx can transfer the agreement to another person or business entity if that entity assumes Learningrx's obligations. Upon such transfer, Learningrx is released from further liability to the Area Developer. Learningrx does not need the franchisee's permission for this transfer.
Learningrx can also sell or issue its stock, ownership interests, or assets privately or publicly. Additionally, Learningrx can merge with, acquire, or be acquired by another entity, even one that competes with the franchisee. Learningrx is also permitted to undertake refinancing, recapitalization, leveraged buyouts, or other economic or financial restructuring.
In contrast, the franchisee's obligations are personal and cannot be transferred without Learningrx's prior written approval. Any unauthorized transfer by the franchisee is considered a breach of the agreement and grounds for termination. This difference in transfer rights is common in franchising, where the franchisor needs flexibility in its business operations while ensuring the franchisee remains committed and qualified.