Under what conditions can Learningrx refuse a franchisee's request for a renewal term?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.3 Right of Refusal to Grant Successor Term.
Franchisor may refuse, in Franchisor's sole discretion, to grant Franchisee's request for a Renewal Term if Franchisee:
(a) fails to remedy, in the time frame set forth in this Agreement, any breach of this Agreement specified by Franchisor in a written notice;
(b) has committed two (2) or more material breaches of this Agreement in the preceding twelve (12) months prior to expiration;
(c) fails to give notice of Franchisee's intent to renew at least six (6) months, but no more than twelve (12) months, prior to the expiration of this Agreement.
Failure to give timely notice will be considered an election not to renew this Agreement; or
- (d) is not current in payment obligations to Franchisor or its subsidiaries and affiliates and to trade creditors, landlords, or mortgage holders at the time Franchisee delivers its notice of renewal or on the date this Agreement is scheduled to expire unless Franchisee has a legitimate basis to dispute the claims of such persons and has made adequate reserves therefore.
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 refuse a franchisee's request for a renewal term under certain conditions. The standard franchise agreement has an initial term of ten years, with an option for a single ten-year renewal term if Learningrx approves it.
Learningrx can refuse a renewal if the franchisee fails to correct any breach of the agreement specified in a written notice from Learningrx within the time frame outlined in the agreement. Additionally, Learningrx can deny a renewal if the franchisee has committed two or more material breaches of the agreement in the 12 months leading up to the expiration of the current term.
Furthermore, Learningrx can refuse renewal if the franchisee fails to provide notice of their intent to renew at least six months, but no more than twelve months, before the agreement's expiration. Missing this notification deadline is considered an election not to renew. Finally, Learningrx can refuse renewal if the franchisee is not current on their payment obligations to Learningrx, its subsidiaries, affiliates, trade creditors, landlords, or mortgage holders at the time of the renewal notice or the agreement's expiration date, unless the franchisee has a legitimate dispute and has made adequate reserves to cover the disputed claims.