Learningrx 2025 Franchise FAQ - FDD Ninja

Question 1

According to the FDD, how many new company-owned Learningrx outlets are projected to open in the current fiscal year?

Accepted Answer

| State      | Franchise Agreements Signed but Outlet Not Opened | Projected New Franchised Outlets in the Next Fiscal Year | Projected New Company- Owned Outlets in the Current Fiscal Year |
|------------|------------------------------------------------------|----------------------------------------------------------------|-----------------------------------------------------------------------|
| Arkansas   | 0                                                    | 1                                                              | 0                                                                     |
| Florida    | 0                                                    | 1                                                              | 0                                                                     |
| New Jersey | 0                                                    | 1                                                              | 0                                                                     |
| Oregon     | 0                                                    | 1                                                              | 0                                                                     |
| Texas      | 1                                                    | 1                                                              | 0                                                                     |
| Virginia   | 0                                                    | 1                                                              | 0                                                                     |
| Wisconsin  | 0                                                    | 1                                                              | 0                                                                     |
| TOTALS     | 1                                                    | 7                                                              | 0                                                                     |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 48–53)

Question 2

What rights does Learningrx retain with respect to Learningrx Centers, the System, and the Marks?

Accepted Answer

As noted above, and as specified in the Franchise Agreement, we will not establish, franchise or license others to establish a LearningRx Center in the Territory during the term of the Franchise Agreement so long as you are in compliance with the Franchise Agreement. However, and despite those promises and obligations, we and our affiliates retain all rights with respect to LearningRx Centers, the System, the

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Marks, the sale of similar or dissimilar services, and any other activities we deem appropriate whenever and wherever we desire, including:

- 1. to own, franchise, license or operate LearningRx Centers or remote training services at any location outside of the Territory, regardless of the proximity to your LearningRx Center.

We will not establish within your Territory another franchisee or company-owned outlet which may also use the Marks;

- 2. to use the Marks and the System to sell any products or services, similar to those which you will sell, except products provided "trainer to student," through any alternate channels of distribution within or outside of the Territory.

This includes, but is not limited to, retail locations and other channels of distribution such as stores, shops, kiosks, malls, airports, and college campuses, at special events, and other channels of distribution such as, television, mail order, catalog sales, wholesale to unrelated retail outlets, or over the Internet.

We exclusively reserve alternative channels of distribution such as the Internet, catalog sales, telemarketing or other direct marketing, as channels of distribution for us.

You may not independently use alternative channels of distribution to make sales within or outside your Territory;

- 3. to use and license the use of other proprietary and non-proprietary marks or methods which are not the same as or confusingly similar to the Marks, whether in alternative channels of distribution or in the operation of a business offering educational services, at any location, including within the Territory, which may be similar to or different from the business operated by you;

- 4. to purchase or be purchased by, or merge or combine with, any business, including a business that competes directly with the LearningRx Center you operate, wherever located;

- 5. to acquire and convert to the System operated by us any businesses offering services and products related to providing educational services, including such businesses operated by competitors or otherwise operated independently or as part of, or in association with, any other system or chain, whether franchised or corporately owned and whether located inside or outside of the Territory;

- 6. to implement multi-area marketing programs including regional pricing and service programs, which may allow us or others to solicit or sell to clients, or otherwise dictate service and pricing strategy, anywhere.

We also reserve the right to issue mandatory policies to coordinate these multi-area marketing programs including the right to establish minimum or maximum pricing for such programs, as permitted by law; and

- 7. to permit pre-existing PACE Licensees and Clinical Licensees, if any, to continue to operate in your Territory if their zips codes are included in your Territory, or outside your Territory regardless of proximity to your Territory, under the Marks.

Source: Item 12 — TERRITORY (FDD pages 33–35)

Question 3

What is the total number of pages in the Learningrx Franchise Disclosure Document?

Accepted Answer

Included as the last page of this Disclosure Document is a detachable Receipt to be signed by you.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 4

What is the total projected number of new franchised Learningrx outlets expected to open in the next fiscal year across all states listed?

Accepted Answer

| State      | Franchise Agreements Signed but Outlet Not Opened | Projected New Franchised Outlets in the Next Fiscal Year | Projected New Company- Owned Outlets in the Current Fiscal Year |
|------------|------------------------------------------------------|----------------------------------------------------------------|-----------------------------------------------------------------------|
| Arkansas   | 0                                                    | 1                                                              | 0                                                                     |
| Florida    | 0                                                    | 1                                                              | 0                                                                     |
| New Jersey | 0                                                    | 1                                                              | 0                                                                     |
| Oregon     | 0                                                    | 1                                                              | 0                                                                     |
| Texas      | 1                                                    | 1                                                              | 0                                                                     |
| Virginia   | 0                                                    | 1                                                              | 0                                                                     |
| Wisconsin  | 0                                                    | 1                                                              | 0                                                                     |
| TOTALS     | 1                                                    | 7                                                              | 0                                                                     |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 48–53)

Question 5

What is the total projected number of new franchised Learningrx outlets expected to open in the next fiscal year across all states listed in the table?

Accepted Answer

|  | Franchise Agreements Signed but Outlet Not Opened | Projected New Franchised Outlets in the Next Fiscal Year | Projected New Company- |
|---|---|---|---|
|  |  |  | Owned Outlets in the Current |
| State |  |  | Fiscal Year |
| Arkansas | 0 | 1 | 0 |
| Florida | 0 | 1 | 0 |
| New Jersey | 0 | 1 | 0 |
| Oregon | 0 | 1 | 0 |
| Texas | 1 | 1 | 0 |
| Virginia | 0 | 1 | 0 |
| Wisconsin | 0 | 1 | 0 |
| TOTALS | 1 | 7 | 0 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 48–53)

Question 6

What is the difference in the estimated initial investment between a Learningrx Micro Franchise and a Standard Franchise (Item 7), considering the different initial franchise fees (Item 5)?

Accepted Answer

|  | Amount |  |  |  |  |
|---|---|---|---|---|---|
|  | Micro | Standard | Method of |  | To Whom Payment is to be |
| Type of Expenditure | Franchise | Franchise | Payment | When Due | Made |
| Initial Investment to Open Initial | $148,000 | $220,000 | See Estimated Initial Investment: Single Center chart above in this Item 7 |  |  |
| Micro or Standard Center |  |  |  |  |  |
| Area Development Fee | $10,500 | $15,750 | Lump Sum | Upon execution of Area Developer Agreement | Franchisor |
| TOTALS | $158,500 | $235,750 |  |  |  |

| Type of Expenditure(1) | Satellite Location Population Varies in 10-mile radius | Micro Franchise “under” to below 100k in 10-mile radius | Standard Franchise 100k plus in 10-mile radius | To Whom Payment is to be Made |
|---|---|---|---|---|
| Initial Franchise | $5,000 | $30,000 | $45,000 | Us |
| Fee(2) |  |  |  |  |
| Travel and Living Expenses While Training(3) | $0 | $3,000 | $3,000 | Airlines, hotels, car rental and restaurants |
| Initial Training & | $0 | $10,000 | $10,000 | Us |
| Materials Fee(4) |  |  |  |  |
| Initial Marketing | $15,000 | $15,000 | $30,000 | Third-party vendors |
| Campaign(5) |  |  |  |  |
| Security Deposit, First Month’s Rent or Real Estate & Improvements(6) | $15,000 | $22,000 | $30,000 | Landlord and third- party vendors |
| Furniture & | $10,000 | $15,000 | $25,000 | Third-party vendors |
| Fixtures |  |  |  |  |
| Signage | $5,000 | $5,000 | $5,000 | Third-party vendors |
| Miscellaneous | $1,000 | $2,000 | $3,000 | Suppliers, utilities, |
| Opening Costs(7) |  |  |  | third-party vendors |
| Insurance | $1,500 | $2,000 | $3,000 | Insurance carrier |
| Policies*(8) |  |  |  |  |
| Computer | $2,500 | $4,000 | $6,000 | Third-party vendors |
| Equipment & |  |  |  |  |
| Proprietary |  |  |  |  |
| Software(9) |  |  |  |  |
| Additional Funds (initial three months)(10) | $20,000 | $40,000 | $60,000 | Suppliers, third-party vendors, etc. |
| TOTALS | $75,000 | $148,000 | $220,000 |  |

Question 7

What is the difference in the initial franchise fee for a Learningrx Micro Franchise versus a Standard Franchise, as detailed in Item 5, and how does this relate to the territory size defined in Item 12?

Accepted Answer

The initial franchise fee ("**Initial Franchise Fee**") varies depending upon the size of the Territory. You pay an Initial Franchise Fee based on the number of people residing in Franchisee's Territory. Franchisee must pay an Initial Franchise Fee of $30,000 for a micro franchise ("**Micro Franchise**") (less

![](_page_12_Picture_0.jpeg)

than 100,000 people), and $45,000 for a standard franchise ("**Standard Franchise**") (100,000 to 200,000 people). The Initial Franchise Fee is fully earned upon signing of the Franchise Agreement, and there are no refunds under any circumstances.

...

We will grant to you a territory ("**Territory**") defined by population size. A Micro Franchise has a population of less than 100,000; and a Standard Franchise has a population of 100,000 to 200,000 people, as determined by us. Your Territory may be delineated by boundary streets, highways, counties, or zip codes. We will not operate through our current trademarks, any permanent LearningRx Centers or grant franchises for a similar or competitive business within your Territory as long as you meet minimum revenue requirements, but we have the right to do so anywhere outside your Territory at any time. You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. You may also have preexisting PACE Licensees and Clinical Licensees offering educational services under different trademarks and trade names operating in your Territory. You will operate from 1 location approved by us and must receive our permission before relocating. We will grant approval to relocate if you are in compliance with the Franchise Agreement, you have paid all money owed to us and/or our affiliates, and the proposed location meets our site selection criteria as specified in the Operations Manual. Once established and unless otherwise agreed, the boundaries of your Territory will not be adjusted without our prior written consent regardless of whether the population of your Territory increases or decreases over time.

Question 8

What is the difference in the initial franchise fee for a Learningrx Micro Franchise versus a Standard Franchise (Item 5) and what factors contribute to this difference?

Accepted Answer

Franchise Fee**") varies depending upon the size of the Territory. You pay an Initial Franchise Fee based on the number of people residing in Franchisee's Territory. Franchisee must pay an Initial Franchise Fee of \$30,000 for a micro franchise ("**Micro Franchise**") (less

![](_page_12_Picture_0.jpeg)

than 100,000 people), and \$45,000 for a standard franchise ("**Standard Franchise**") (100,000 to 200,000 people). The Initial Franchise Fee is fully earned upon signing of the F

Question 9

What are the different types of Learningrx franchises (Micro vs. Standard) based on territory size (Item 12) and how do these differences affect the initial franchise fee (Item 5)?

Accepted Answer

required to be disclosed in this Item.

#### **ITEM 5 INITIAL FEES**

The initial franchise fee ("**Initial Franchise Fee**") varies depending upon the size of the Territory. You pay an Initial Franchise Fee based on the number of people residing in Franchisee's Territory. Franchisee must pay an Initial Franchise Fee of \$30,000 for a micro franchise ("**Micro Franchise**") (less

![](_page_12_Picture_0.jpeg)

than 100,000 people), and \$45,000 for a standard franchise ("**Standard Franchise**") (100,000 to 200,000 people). The Initial Franchise Fee is fully earned upon signing of the F

Question 10

What is the estimated cost of travel and living expenses while training for a Learningrx franchisee (Item 7) and how does this compare to the initial franchise fee (Item 5)?

Accepted Answer

| Type of Expenditure(1) | Satellite Location Population Varies in 10-mile radius | Micro Franchise “under” to below 100k in 10-mile radius | Standard Franchise 100k plus in 10-mile radius | To Whom Payment is to be Made |
|---|---|---|---|---|
| Initial Franchise | $5,000 | $30,000 | $45,000 | Us |
| Fee(2) |  |  |  |  |
| Travel and Living Expenses While Training(3) | $0 | $3,000 | $3,000 | Airlines, hotels, car rental and restaurants |

Question 11

What is the estimated cost of travel and living expenses while training for a Learningrx franchisee (Item 7) and how does this relate to the initial franchise fee (Item 5)?

Accepted Answer

| Type of Expenditure(1) | Satellite Location Population Varies in 10-mile radius | Micro Franchise “under” to below 100k in 10-mile radius | Standard Franchise 100k plus in 10-mile radius | To Whom Payment is to be Made |
|---|---|---|---|---|
| Initial Franchise | $5,000 | $30,000 | $45,000 | Us |
| Fee(2) |  |  |  |  |
| Travel and Living Expenses While Training(3) | $0 | $3,000 | $3,000 | Airlines, hotels, car rental and restaurants |

Question 12

What is the initial franchise fee for a Learningrx Micro Franchise (Item 5) and how does it compare to the fee for a Standard Franchise?

Accepted Answer

required to be disclosed in this Item.

#### **ITEM 5 INITIAL FEES**

The initial franchise fee ("**Initial Franchise Fee**") varies depending upon the size of the Territory. You pay an Initial Franchise Fee based on the number of people residing in Franchisee's Territory. Franchisee must pay an Initial Franchise Fee of \$30,000 for a micro franchise ("**Micro Franchise**") (less

![](_page_12_Picture_0.jpeg)

than 100,000 people), and \$45,000 for a standard franchise ("**Standard Franchise**") (100,000 to 200,000 people). The Initial Franchise Fee is fully earned upon signing of the Franchise Agreement, and there are no refunds under any circumstances.

You must also pay an Initial Training and Materials Fee at the time you sign the Franchise Agreement. The Initial Training and Materials Fee is \$10,000 and is fully earned upon payment. There are no refunds of the Initial Training and Materials Fee under any circumstances.

Additionally, we offer a Satellite Location Addendum, which is available to those existing franchisees that have been in operation for two years under a Franchise Agreement and whom we deem qualified, in our sole discretion. Upon signing of the Addendum, Franchisee must pay a Satellite Location fee of \$5,000 ("**Satellite Location Fee**"), if the Satellite Location is outside of the Territory. The Satellite Location Fee is fully earned upon signing the Addendum and is non-refundable under any circumstances. If the Satellite Location is within the Territory, a reduced Satellite Location Fee of \$2,400 will only be due if Franchisee wishes to have to Satellite Location listed on the LearningRx website.

Depending upon the territory size of your LearningRx Center, you must pay us between \$2,000 and \$3,000 for opening inventory of the student/trainer kits and/or workbooks ("**Products**"). Each student will need one or more kits and/or workbooks depending on the program. You will be required to purchase student/trainer kits from us on an ongoing basis. The cost of these student/trainer kits/workbooks/digital programs will vary based on the number

Question 13

Can a PACE licensee of Learningrx, Inc. operate within the same territory as a Learningrx franchisee?

Accepted Answer

- 1) LearningRx, Inc., a Colorado corporation, which is also our Parent, located at 6385 Corporate Drive, Suite 101, Colorado Springs, Colorado 80919. LearningRx, Inc. offers a license to operate an educational training program called PACE ("**PACE Program**"), which differs from the System that we will license to you. PACE licensees are granted the right to offer the PACE Program in a designated zip code that may be located in your Territory. LearningRx, Inc. also offers a limited license to operate an educational training program to professionals that is similar to the System that we will license to you ("**Clinical Program**"). The Clinical licensees only offer the Clinical Program in a designated zip code. The designated zip code may be in your Territory. LearningRx, Inc. has never offered franchises in any other line of business.

Source: Item 1 — THE FRANCHISOR, AND ANY PARENT, PREDECESSORS, AND AFFILIATES (FDD pages 8–11)

Question 14

What is the range of the initial franchise fee for Learningrx (Item 5) and how does it compare to the total estimated initial investment (Item 7)?

Accepted Answer

[Item 5: INITIAL FEES]

#### **ITEM 5 INITIAL FEES**

The initial franchise fee ("**Initial Franchise Fee**") varies depending upon the size of the Territory. You pay an Initial Franchise Fee based on the number of people residing in Franchisee's Territory. Franchisee must pay an Initial Franchise Fee of $30,000 for a micro franchise ("**Micro Franchise**") (less

![](_page_12_Picture_0.jpeg)

than 100,000 people), and $45,000 for a standard franchise ("**Standard Franchise**") (100,000 to 200,000 people). The Initial Franchise Fee is fully earned upon signing of the Franchise Agreement, and there are no refunds under any circumstances.

You must also pay an Initial Training and Materials Fee at the time you sign the Franchise Agreement. The Initial Training and Materials Fee is $10,000 and is fully earned upon payment. There are no refunds of the Initial Training and Materials Fee under any circumstances.

Additionally, we offer a Satellite Location Addendum, which is available to those existing franchisees that have been in operation for two years under a Franchise Agreement and whom we deem qualified, in our sole discretion. Upon signing of the Addendum, Franchisee must pay a Satellite Location fee of $5,000 ("**Satellite Location Fee**"), if the Satellite Location is outside of the Territory. The Satellite Location Fee is fully earned upon signing the Addendum and is non-refundable under any circumstances. If the Satellite Location is within the Territory, a reduced Satellite Location Fee of $2,400 will only be due if Franchisee wishes to have to Satellite Location listed on the LearningRx website.

Depending upon the territory size of your LearningRx Center, you must pay us between $2,000 and $3,000 for opening inventory of the student/trainer kits and/or workbooks ("**Products**"). Each student will need one or more kits and/or workbooks depending on the program. You will be required to purchase student/trainer kits from us on an ongoing basis. The cost of these student/trainer kits/workbooks/digital programs will vary based on the number of students, your number of trainers, and which program is being used.

| Type of Expenditure(1) | Satellite Location Population Varies in 10-mile radius | Micro Franchise “under” to below 100k in 10-mile radius | Standard Franchise 100k plus in 10-mile radius | To Whom Payment is to be Made |
|---|---|---|---|---|
| Initial Franchise | $5,000 | $30,000 | $45,000 | Us |
| Fee(2) |  |  |  |  |
| Travel and Living Expenses While Training(3) | $0 | $3,000 | $3,000 | Airlines, hotels, car rental and restaurants |
| Initial Training & | $0 | $10,000 | $10,000 | Us |
| Materials Fee(4) |  |  |  |  |
| Initial Marketing | $15,000 | $15,000 | $30,000 | Third-party vendors |
| Campaign(5) |  |  |  |  |
| Security Deposit, First Month’s Rent or Real Estate & Improvements(6) | $15,000 | $22,000 | $30,000 | Landlord and third- party vendors |
| Furniture & | $10,000 | $15,000 | $25,000 | Third-party vendors |
| Fixtures |  |  |  |  |
| Signage | $5,000 | $5,000 | $5,000 | Third-party vendors |
| Miscellaneous | $1,000 | $2,000 | $3,000 | Suppliers, utilities, |
| Opening Costs(7) |  |  |  | third-party vendors |
| Insurance | $1,500 | $2,000 | $3,000 | Insurance carrier |
| Policies*(8) |  |  |  |  |
| Computer | $2,500 | $4,000 | $6,000 | Third-party vendors |
| Equipment & |  |  |  |  |
| Proprietary |  |  |  |  |
| Software(9) |  |  |  |  |
| Additional Funds (initial three months)(10) | $20,000 | $40,000 | $60,000 | Suppliers, third-party vendors, etc. |
| TOTALS | $75,000 | $148,000 | $220,000 |  |

|  | Amount |  |  |  |  |
|---|---|---|---|---|---|
|  | Micro | Standard | Method of |  | To Whom Payment is to be |
| Type of Expenditure | Franchise | Franchise | Payment | When Due | Made |
| Initial Investment to Open Initial | $148,000 | $220,000 | See Estimated Initial Investment: Single Center chart above in this Item 7 |  |  |
| Micro or Standard Center |  |  |  |  |  |
| Area Development Fee | $10,500 | $15,750 | Lump Sum | Upon execution of Area Developer Agreement | Franchisor |
| TOTALS | $158,500 | $235,750 |  |  |  |

Question 15

What is the relationship between the initial franchise fee for a Learningrx Standard Franchise described in Item 5 and the estimated initial investment for a Standard Franchise in Item 7?

Accepted Answer

| Type of Expenditure(1) | Satellite Location Population Varies in 10-mile radius | Micro Franchise “under” to below 100k in 10-mile radius | Standard Franchise 100k plus in 10-mile radius | To Whom Payment is to be Made |
|---|---|---|---|---|
| Initial Franchise | $5,000 | $30,000 | $45,000 | Us |
| Fee(2) |  |  |  |  |
| Travel and Living Expenses While Training(3) | $0 | $3,000 | $3,000 | Airlines, hotels, car rental and restaurants |
| Initial Training & | $0 | $10,000 | $10,000 | Us |
| Materials Fee(4) |  |  |  |  |
| Initial Marketing | $15,000 | $15,000 | $30,000 | Third-party vendors |
| Campaign(5) |  |  |  |  |
| Security Deposit, First Month’s Rent or Real Estate & Improvements(6) | $15,000 | $22,000 | $30,000 | Landlord and third- party vendors |
| Furniture & | $10,000 | $15,000 | $25,000 | Third-party vendors |
| Fixtures |  |  |  |  |
| Signage | $5,000 | $5,000 | $5,000 | Third-party vendors |
| Miscellaneous | $1,000 | $2,000 | $3,000 | Suppliers, utilities, |
| Opening Costs(7) |  |  |  | third-party vendors |
| Insurance | $1,500 | $2,000 | $3,000 | Insurance carrier |
| Policies*(8) |  |  |  |  |
| Computer | $2,500 | $4,000 | $6,000 | Third-party vendors |
| Equipment & |  |  |  |  |
| Proprietary |  |  |  |  |
| Software(9) |  |  |  |  |
| Additional Funds (initial three months)(10) | $20,000 | $40,000 | $60,000 | Suppliers, third-party vendors, etc. |
| TOTALS | $75,000 | $148,000 | $220,000 |  |

Question 16

How did the total advertising costs charged to expense by Learningrx change between the years ended September 30, 2023 and September 30, 2024?

Accepted Answer

irs and maintenance are expensed as incurred. It is the Corporation's policy that property and equipment expenditures costing less than \$5,000 are expensed. Total depreciation expense for the years ended

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 17

Are Learningrx Centers required to use a designated merchant services provider for receiving payments from clients for agreements signed on or after January 1, 2019?

Accepted Answer

You must purchase certain marketing materials, equipment, services, supplies, and materials used to operate your franchise from our approved or designated suppliers as indicated in the Operations Manual. For example, for any agreements signed on or after January 1, 2019, Centers are required to use our designative merchant services provider, as specified in the Operations Manual, for receiving payments from clients at your Center. If you would like to purchase items from another supplier, you may request our "**Supplier Approval Criteria and Request Form**." At no cost to you, upon receipt of the Supplier Approval Criteria and Request Form, we will study the proposed product or service, and within 30 days approve or disapprove the proposed supplier. We base our approval on a number of factors including vendor reputation, quality of products, delivery performance, and credit rating. However, we reserve the right to determine, in our sole discretion, whether the materials meet our standards and specifications. If you do not receive an approval within 30 days, your request will be deemed disapproved. We expect to derive some income from Franchisees' required purchases from designated and approved suppliers in the next and following fiscal years through a program of rebates from some of our designated or approved suppliers. These rebates serve to partially reimburse us for our costs in the initial sourcing, approval and ongoing monitoring of compliance with our quality standards by our suppliers, but we may receive rebates in excess of our cost to source, approve and monitor suppliers.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–24)

Question 18

According to the Learningrx FDD, what happens if a court finds a portion of Section 15 unreasonable?

Accepted Answer

- 15.3 Independent Covenants. The parties agree that each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement. If any or all portions of the covenants in this Section 15 are held unreasonable or unenforceable by a court or agency having valid jurisdiction in an unappealed final decision to which Franchisor is a party, Franchisee expressly agrees to be bound by any lesser covenant subsumed within the terms of such covenant that imposes the maximum duty permitted by law, as if the resulting covenant were separately stated in and made a part of this Section 15.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 19

According to the FDD, what should be reported if the LearningRx disclosure document contains a false or misleading statement?

Accepted Answer

If LearningRx Franchise Corporation does not deliver this disclosure document on time or if it contains a false or misleading statement, or a material omission, a violation of federal law and state law may have occurred and should be reported to the Federal Trade Commission, Washington, DC 20580, and the appropriate state agency identified on EXHIBIT D.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 20

According to the FDD, what should be reported if the LearningRx disclosure document contains a material omission?

Accepted Answer

If LearningRx Franchise Corporation does not deliver this disclosure document on time or if it contains a false or misleading statement, or a material omission, a violation of federal law and state law may have occurred and should be reported to the Federal Trade Commission, Washington, DC 20580, and the appropriate state agency identified on EXHIBIT D.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 21

According to the FDD, what should be reported if LearningRx Franchise Corporation does not deliver the disclosure document on time?

Accepted Answer

If LearningRx Franchise Corporation does not deliver this disclosure document on time or if it contains a false or misleading statement, or a material omission, a violation of federal law and state law may have occurred and should be reported to the Federal Trade Commission, Washington, DC 20580, and the appropriate state agency identified on EXHIBIT D.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 22

What action should be taken if LearningRx Franchise Corporation delivers a disclosure document late, or if it contains a false statement or material omission?

Accepted Answer

If LearningRx Franchise Corporation does not deliver this disclosure document on time or if it contains a false or misleading statement, or a material omission, a violation of federal law and state law may have occurred and should be reported to the Federal Trade Commission, Washington, DC 20580, and the appropriate state agency identified on EXHIBIT D.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 23

Besides revenue, what other requirements must a Learningrx Area Developer's current centers meet to open another center?

Accepted Answer

, in any manner, the Marks or System by virtue of this Agreement. Each Center will be governed by the individual franchise agreement executed by Franchisor and Area Developer for each Center.
- 1.04. Investment. The Area Developer must contribute some amount of its personal capital to the development of each Center and must own at least a seventy percent (70%) equity

![](_page_152_Picture_0.jpeg)

interest in each Center developed under this Agreement. Each of the Area Developer's general managers is strongly encouraged to own at least a ten (10%) equity interest in the Center that the general manager supervises.

- 1.05. Additional Requirements. As added requirements to open another Center as provided for in this Agreement:
- A. Area Developer's current Center(s) each must have collected revenue of at least One hundred, thousand a

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 24

Does Learningrx charge a fee for additional onsite consultation or advisory services?

Accepted Answer

Offer you a reasonable amount of continuing advisory services by telephone during normal business hours.

We may also provide to you visits by our field representative, but any additional onsite consultation or advisory services you request may incur a fee. (See Sections 8.04 and 8.07 of the Franchise Agreement).

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEM, AND TRAINING (FDD pages 26–33)

Question 25

After completing the initial training, is there any mandatory training required by Learningrx?

Accepted Answer

ing, we reserve the right to conduct any or all training virtually, as we determine in our sole discretion. After satisfactorily completing this initial training, there is no mandatory training required, however, you will be required to have center person per Center attend periodic or national conferences and we have the right to charge you a fine for not attending (See ITEM 6).

8. We also provide to you two to three days (varies based on whether it is a Micro or Standard Franchise) of on-the-job initial training at your Center and assistance with respect to opening activities within the first three months of the operation of your Center at no additional cost to you.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEM, AND TRAINING (FDD pages 26–33)

Question 26

What is the condition under which a Learningrx Franchisee Affiliate can have an interest in a Competitive Business?

Accepted Answer

for which such information or material may have been furnished to Franchisee Affiliate.
- 6. Franchisee Affiliate shall not at any time, directly or indirectly, do any act that would or would likely be injurious or prejudicial to the goodwill associated with the Licensed Marks, the Trade Secrets or the System.
- 7. All Operations Manuals are loaned by Franchisor to Franchisee for limited purposes only and remain the property of Franchisor and may not be reproduced, in whole or in part, without Franchisor's written consent.

#### **COVENANTS NOT TO COMPETE**

- 1. In order to protect the goodwill and unique qualities of the System and the confidentiality and value of the Trade Secrets, and in consideration for the disclosure to Franchisee Affiliate of the Trade Secrets, Franchisee Affiliate further agrees and covenants that Franchisee Affiliate will not without the prior written consent of Franchisor:
- a. Have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business, except with Franchisor's approval;
- b. Perform services as a director, officer, manager, employee, consultant, representative, agent or otherwise for a Competitive Business wherever operating except with Franchisor's approval;
- c. Divert or attempt to divert, directly or indirectly, any business, business opportunity or customer of the LearningRx Business to any competitor;
- d.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 27

What consent is required for a Learningrx franchisee to advertise in media with a primary circulation outside the franchisee's territory?

Accepted Answer

Subject to the requirements of Sections 9.1 and 9.2, Franchisee may not, without the express written permission of Franchisor, place advertising targeted primarily to another territory unless the advertising is done as part of a cooperative effort with the Franchisee in the targeted territory

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 28

What is the consequence if a Learningrx franchisee fails to correct defects or deficiencies in their business after being notified by the franchisor?

Accepted Answer

nchisee. Franchisee is required to provide counter space for the display of brochures provided by Franchisor promoting the LearningRx franchising opportunity.
- 12.12 Training. Franchisee and a center director (if the franchisee is not in-center at least 75% time) complete Franchisor's initial training program described in Section 8.5 above. Franchisee shall train its employees according to standards and procedures established by Franchisor.
- 12.13 Correction of Defects. Should Franchisor notify Franchisee at any time of defects, deficiencies or unsatisfactory conditions in the appearance or conduct of the Business, Franchisee shall correct immediately any such items. Franchisee shall establish and maintain an image and reputation for the Business consistent with the standards set forth in this Agreement, the Operations Manual, or as otherwise specified by Franchisor. Franchisee shall keep its Center clean and in good order and repair at all times.

![](_page_104_Picture_0.jpeg)

- 12.14 Indemnification.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 29

What are the consequences if a Learningrx franchisee fails to ensure required individuals sign the Guaranty and Assumption of Franchisee's Obligations?

Accepted Answer

In consideration of, and as inducement to, the execution of that certain Franchise Agreement of even date herewith (the "**Agreement**") by **LearningRx Franchise Corporation** (the "**Franchisor**") and the party or parties identified on the Agreement (the "**Franchisee**"), and acknowledging that Franchisor would not be willing to enter into the Agreement without the commitment of each spouse or domestic partner of Franchisee's owner to guarantee the performance of the Franchisee, each of the undersigned hereby personally and unconditionally (a) guarantees to Franchisor, and its successors and assigns, for the term of the Agreement and thereafter as provided in the Agreement, that the Franchisee shall punctually pay and perform each and every undertaking, agreement and covenant set forth in the Agreement; and (b) agrees to be personally bound by, and personally liable for the breach of, each and every provision in the Agreement, both monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities. Notwithstanding clauses (a) and (b) above, a spouse or domestic partner who is also a guarantor hereunder and who becomes widowed and who does not have (and will not obtain) an ownership interest in the Franchisee, the Agreement, or any Franchise Agreement granted thereunder as an owner, co-owner, investor, member, partner, shareholder or like capacity shall not thereafter be held responsible for any monetary obligations thereafter arising out of the terms and conditions of this Guaranty and Assumption of Obligations unless any such ownership interest is acquired in any manner by the widowed spouse or domestic partner, or the widowed spouse's children, deceased spouse's children, or domestic partner's children. Notwithstanding any change in ownership resulting from the death of a spouse or domestic partner, all monetary obligations and liabilities existing at the time of death shall continue to be an obligation of the surviving spouse or domestic partner until such obligations or liabilities shall be paid in full by the estate or by the guarantor spouse or domestic partner. Notwithstanding the limitations set forth above, any and all other non-monetary obligations of the Agreement shall remain an obligation of the surviving spouse.

Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 40)

Question 30

How does Learningrx credit a Center if the quarterly Marketing Development Fund (MDF) payments exceed the monthly minimums?

Accepted Answer

ayment into the Fund is due in the same time and manner as the Royalty Fee. On a quarterly basis, Marketing Development Fund totals paid for the quarter are reviewed, and a Center is credited in the month following the quarter, if the average per month over the quarter exceeded the monthly minimums. Example: If monthly gross revenues for a Standard Franchise are \$9,000, \$31,000 and \$30,000 in a quarter, the minimum of \$270 would have been paid in MDF fees in the 1st month, but \$70 will be

Source: Item 6 — OTHER FEES (FDD pages 13–19)

Question 31

Does the definition of 'Territory' for a Learningrx franchise include any reservations or exceptions?

Accepted Answer

- 1.12 "**Territory**" means the territory described in Attachment I to this Agreement, subject to any reservations or exceptions contained in this Agreement.

- 4.5 Reservation of Rights.

Franchisee acknowledges that the Franchise granted hereunder is non-exclusive and that Franchisor and its Affiliates retain the exclusive right, among others:

- (a) to own, use, operate and to license and Franchise others to use, the Marks and System for the operation of LearningRx Centers at any location other than in the Territory, regardless of proximity to the Territory;

- (b) to use and Franchise the use of trademarks or service marks other than the Marks, whether in alternative channels of distribution or at any location including the Territory, except for products provided "trainer to student," in association with operations that are similar to or different than the LearningRx Center;

- (c) to offer the services or products, or grant others the right to offer the services or products, whether using the Marks or other trademarks or service marks, except products provided "trainer to student", through alternative channels of distribution, including without limitation, retail locations and other channels of distribution (other than LearningRx Centers) such as stores, shops, kiosks, malls, airports, and college campuses, at special events and other channels of distribution such as television, mail order, catalog sales, wholesale to unrelated retail outlets, or over the Internet, whether inside or outside the Territory;

- (d) to any websites utilizing a domain name incorporating the word "LEARNING" or "RX" or similar derivatives thereof.

Franchisor retains the sole right to market on the Internet and use the Marks on the Internet, including all use of websites, social networking sites, domain names, URL's, directory addresses, metatags, linking, advertising, and co-branding and other arrangements.

Franchisee may not independently market on the Internet, or use any domain name, social networking site, address, locator, link, metatag, or search technique, with words or symbols similar to the Marks or otherwise establish any presence on the Internet without Franchisor's prior written approval.

- (e) to acquire businesses that are the same as or similar to the LearningRx Center and operate such businesses regardless of where such businesses are located, including inside the Territory and to be acquired by any third-party which operates businesses that are the same as or similar to the LearningRx Center regardless of where such businesses are located, including inside the Territory;

Notwithstanding the foregoing, Franchisee acknowledges that prior to the term of this Agreement, Franchisor or its affiliate may have licensed to a third-party the right to use the System and/or Marks to operate a business that may be similar to the LearningRx Center operated by Franchisee under this Agreement pursuant to a PACE license or a Clinical license in a portion of Franchisee's Territory.

The pre-existing PACE licensee and/or Clinical licensee has the right to continue to operate the business per the PACE license and/or Clinical license in the portion of Franchisee's Territory and such ongoing use will not constitute a breach of this Agreement, including this Section 4.02 or an Area Developer Agreement, if any.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 32

What is the dependency for the Learningrx addendum's execution?

Accepted Answer

- 1. Grant of License. So long as the Franchise Agreement between Franchisor and Franchisee remains in good standing, Franchisor grants to Franchisee and Franchisee accepts from Franchisor, a non-exclusive right and obligation to use the System and Marks to open and operate one Satellite Location, in accordance with the terms of the Franchise Agreement. The Satellite Location must comply with all specifications set forth in Franchisor's current Operations Manual.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 33

What does Learningrx expect the Area Developer to do if there is an increased public demand for their services due to an increase in the number of individuals in the Development Territory?

Accepted Answer

- 4.04. Change in Development Territory. The parties acknowledge that the development of the Development Territory as anticipated hereunder has been determined according to the needs of the Area Developer's targeted market in the Development Territory, as determined by Franchisor, as of the date of execution of this Agreement. The Area Developer understands that, if there is an increased public demand for the products and services offered by Franchisor due to an increase in the number of individuals in the Development Territory, Franchisor will expect the Area Developer to establish additional Centers within the Development Territory. While Franchisor will not require the Area Developer to establish such additional Centers, Franchisor will strongly encourage Area Developer to do so. Any additional Center shall be governed by Franchisor's then-current form of individual franchise agreement and Franchisor and Area Developer shall execute an addendum to this Agreement reflecting the change to the Development Schedule.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 34

What does Learningrx expect of the Area Developer if there is an increased public demand for their services due to an increase in the number of individuals in the Development Territory?

Accepted Answer

The Area Developer understands that, if there is an increased public demand for the products and services offered by Franchisor due to an increase in the number of individuals in the Development Territory, Franchisor will expect the Area Developer to establish additional Centers within the Development Territory. While Franchisor will not require the Area Developer to establish such additional Centers, Franchisor will strongly encourage Area Developer to do so. Any additional Center shall be governed by Franchisor's then-current form of individual franchise agreement and Franchisor and Area Developer shall execute an addendum to this Agreement reflecting the change to the Development Schedule.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 35

In Florida, is the agent for service of process for Learningrx SBA loan applicants the same as the State Administrator?

Accepted Answer

|  |  | AGENT FOR |
|---|---|---|
| STATE |  |  |
|  | STATE ADMINISTRATOR | SERVICE OF PROCESS |
|  |  |  |
| FLORIDA | Department of Agriculture & Consumer Services Division of Consumer Services Mayo Building, Second Floor Tallahassee, FL 32399-0800 850-245-6000 | Same |

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 36

Does the Learningrx franchise agreement require compliance with the Americans with Disabilities Act?

Accepted Answer

- 12.1 Compliance with Applicable Laws. Franchisee agrees to (i) comply with all applicable laws, ordinances and regulations or rulings, or licensing requirements, of every nature whatsoever which in any way regulate or affect the operation of its Business and to the care and safety of children, (ii) comply with all applicable educational and professional licensing requirements, (promptly all taxes and business expenses, unless Franchisee is legitimately disputing such matters and has adequately reserved therefor, and (iv) comply with all laws covering occupational hazards, accommodations for the disabled, including without limitation, the Americans with Disabilities Act, if applicable, health, workers' compensation insurance and unemployment insurance. If Franchisee does not obtain all required permits and licenses and other certifications necessary to operate the business and have all required professional and licensed personnel required by law or the Operations Manual to operate the Business, within six (6) months after Franchisee's execution of this Agreement, Franchisor may terminate this Agreement without providing the Franchisee notice or the opportunity to cure the default. Franchisee agrees, at its expense, to modify its Center, if necessary, to comply with any such applicable laws or regulations.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 37

Is a Learningrx franchisee affiliate allowed to perform services for a Competitive Business with Franchisor approval?

Accepted Answer

During the term of this Agreement and for two (2) years after termination, transfer, or expiration of this Agreement for any reason, Franchisee agrees that neither Franchisee, nor any manager of Franchisee, any person associated with Franchisee, including officers, directors, shareholders, partners, members, trustees, employees or agents, and any members of Franchisee's immediate families (collectively **"Franchisee Affiliates"**), will (i) have any direct or indirect controlling interest as a legal or beneficial owner in a Competitive Business (as hereinafter defined); (ii) perform services as a director, partner, officer, manager, employee, consultant, representative, agent or otherwise for a Competitive Business; or (iii) divert or attempt to divert any business related to, or any customer or account of the LearningRx Training Center, Franchisee's Business, Franchisor's business, the business of any affiliate of Franchisor or any other franchisee licensed by Franchisor, by direct inducement or otherwise, or divert or attempt to divert the employment of any employee of Franchisor or another franchisee licensed by Franchisor, to any Competitive Business by any direct inducement or otherwise. During the term of this Agreement, this Covenant Not to Compete applies anywhere in the United States. For two (2) years after the termination, transfer, or expiration of this Agreement, for any reason, this Covenant Not to Compete applies: (a) within Franchisee's Territory; (b) within counties adjacent to Franchisee's Territory or within a Territory then operated by or under development by Franchisor or another franchisee of Franchisor; (c) within a fifty mile radius from the boundary of Franchisees Territory or from any other franchised or company-owned LearningRx Training Center, (d) on the Internet or (e) on any other Multi-Area Marketing channels used by Franchisor.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 38

Can a Learningrx franchisee affiliate have an indirect interest in a Competitive Business with Franchisor approval?

Accepted Answer

or upon conclusion of the use for which such information or material may have been furnished to Franchisee Affiliate.
- 6. Franchisee Affiliate shall not at any time, directly or indirectly, do any act that would or would likely be injurious or prejudicial to the goodwill associated with the Licensed Marks, the Trade Secrets or the System.
- 7. All Operations Manuals are loaned by Franchisor to Franchisee for limited purposes only and remain the property of Franchisor and may not be reproduced, in whole or in part, without Franchisor's written consent.

#### **COVENANTS NOT TO COMPETE**

- 1. In order to protect the goodwill and unique qualities of the System and the confidentiality and value of the Trade Secrets, and in consideration for the disclosure to Franchisee Affiliate of the Trade Secrets, Franchisee Affiliate further agrees and covenants that Franchisee Affiliate will not without the prior written consent of Franchisor:
- a. Have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business, except with Franchisor's approval;
- b. Perform services as a director, officer, manager, employee, consultant, representative, agent or otherwise for a Competitive Business wherever operating except with Franchisor's approval;
- c. Divert or attempt to divert, directly or indirectly, any business, business opportunity or customer of the LearningRx Business to any competitor;
- d.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 39

What must a Learningrx franchisee certify if no lawsuits or claims are threatened or filed during the year?

Accepted Answer

At the end of each year of the term of this Agreement, Franchisee must submit to Franchisor a certified statement listing and describing all performance-based lawsuits or potential claims threatened or actually filed against Franchisee, its owners, managers, employees or agents in connection with the operation of the Business, or if no such lawsuits or claims are threatened or filed during that year, a certified statement to that effect.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 40

What is the Learningrx franchisee required to do if errors or omissions are found in the General Release?

Accepted Answer

Since the purpose of this Release is to end this matter forever, should it develop that there are any errors, mistakes or any omissions in this instrument, whether legal or factual and whether mutual or unilateral, which would cause the release of the parties herein released to be defective or less than complete, then the undersigned Franchisee will sign any and all documents and do any and all things necessary to effectuate a full, final and absolute release of said party.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 41

Is a Learningrx franchisee required to modify their center to comply with applicable laws?

Accepted Answer

- 12.1 Compliance with Applicable Laws. Franchisee agrees to (i) comply with all applicable laws, ordinances and regulations or rulings, or licensing requirements, of every nature whatsoever which in any way regulate or affect the operation of its Business and to the care and safety of children, (ii) comply with all applicable educational and professional licensing requirements, (promptly all taxes and business expenses, unless Franchisee is legitimately disputing such matters and has adequately reserved therefor, and (iv) comply with all laws covering occupational hazards, accommodations for the disabled, including without limitation, the Americans with Disabilities Act, if applicable, health, workers' compensation insurance and unemployment insurance. If Franchisee does not obtain all required permits and licenses and other certifications necessary to operate the business and have all required professional and licensed personnel required by law or the Operations Manual to operate the Business, within six (6) months after Franchisee's execution of this Agreement, Franchisor may terminate this Agreement without providing the Franchisee notice or the opportunity to cure the default. Franchisee agrees, at its expense, to modify its Center, if necessary, to comply with any such applicable laws or regulations. Franchisee shall not engage in any activity or practice that results, or may reasonably be anticipated to result, in any public criticism of the System or any part thereof. At the end of each year of the term of this Agreement, Franchisee must submit to Franchisor a certified statement listing and describing all performance-based lawsuits or potential claims threatened or actually filed against Franchisee, its owners, managers, employees or agents in connection with the operation of the Business, or if no such lawsuits or claims are threatened or filed during that year, a certified statement to that effect.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 42

Are Learningrx franchisees required to cooperate and participate in Multi-Area Marketing Programs?

Accepted Answer

- (f) to implement multi-area marketing programs, including regional pricing and service programs which may allow Franchisor or others to solicit or sell clients or otherwise dictate service and pricing strategy, anywhere.

Franchisor reserves the right to issue mandatory policies to coordinate such multi-area marketing programs, including the right to establish minimum or maximum pricing for such programs, as permitted by law; and

- 9.1 Solicitation. Except as stated in this paragraph, Franchisee may not directly market to or solicit customers who reside outside the Territory. However, Franchisee will have the exclusive right to service customers within the Territory generated by Multi-Area Marketing Programs except through the Internet.
- 9.2 Marketing Development Fund. Franchisee must pay a fee into the Marketing Development Fund to develop marketing for the System. Franchisee will pay a Marketing Development Fund contribution equal to the greater of either (i) three percent (3%) per month of Franchisee's Gross Revenue, or, the "**Minimum MDF Payment**" of Two hundred and 00/100 Dollars ($200.00) for Micro Franchises and Three hundred and 00/100 Dollars ($300.00) for Standard Franchises, up to a maximum of Fifteen thousand and 00/100 Dollars ($15,000.00) per calendar year per Center, at the same time and in the same manner as the Royalty Fee. Company and Affiliate owned Centers will contribute to the Fund on the same basis as Franchisees. Franchisor will hold the Marketing Development Fund contributions in a separate bank account. Franchisor will use the Marketing Development Fund for development expenses such as the creation of marketing and sales tools for centers, development and maintenance of websites and Internet marketing, creating Pay-Per-Click campaigns, various digital marketing campaigns, other campaigns Centers can opt into, social media campaigns, media production, public relations, efforts to publish research studies, agency costs and other costs for resources or tools for developing marketing for use by Centers. This may include our attendance at trade shows, and we may also reimburse our administrative expenses incurred in administering the Marketing Development Fund. Franchisee acknowledges and agrees that expenditures from the Marketing Development Fund may or may not be proportionate to contributions made by Franchisee or provide a direct or any benefit to Franchisee. The Marketing Development Fund will be spent at Franchisor's sole discretion, and Franchisor has no fiduciary duty with

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 43

What happens to the Learningrx Area Development Fee if I choose to open more than two centers?

Accepted Answer

e granted the right to open and operate under your Area Developer Agreement.
- 3. Area Development Fee: The Area Development Fee is equal to 35% of the value of our then-current Initial Franchise Fee and Initial Training and Materials Fee multiplied by the number of additional Centers, after your initial Center, granted pursuant to the Area Development Agreement. The Area Development Fee is for the right to open and operate additional Centers (provided you comply with your development obligations under the Area Developer Agreement). If you choose to open more than two Centers, the Area Development Fee will increase by either \$10,500 (Micro Center) or \$15,750 (Standard Center) for each additional Center, after your initial Center, that w

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 19–22)

Question 44

What happens if a Learningrx franchisee is not current on payment obligations at the time of renewal notice?

Accepted Answer

- 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:

- (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)

Question 45

What happens if a Learningrx franchisee fails to obtain the necessary permits and licenses within six months?

Accepted Answer

- (b) Without Notice.

This Agreement and license will immediately terminate without notice in the event that:

- (vi) Franchisee misrepresented or omitted material facts which induced Franchisor to enter into this Agreement;

- (vii) Franchisee fails to complete the required initial training or has failed to designate an acceptable site pursuant to Section 10;

- (viii) Franchisee fails to obtain all required licenses, permits or certifications, or to hire the required licensed professionals to operate the Business within six months of signing this Agreement.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 46

What happens if a Learningrx franchisee fails to obtain the required insurance?

Accepted Answer

In the event Franchisee fails to obtain the required insurance and keep the same in full force and effect, Franchisee shall pay Franchisor upon demand the premium cost thereof, which Franchisor shall then forward to the insurance carrier.

Notwithstanding the foregoing, failure of Franchisee to obtain insurance constitutes a material breach of this Agreement entitling Franchisor to terminate this Agreement pursuant to the provisions of this Agreement.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 47

What happens if Learningrx notifies a franchisee of defects in the appearance or conduct of the business?

Accepted Answer

Should Franchisor notify Franchisee at any time of defects, deficiencies or unsatisfactory conditions in the appearance or conduct of the Business, Franchisee shall correct immediately any such items.

Franchisee shall establish and maintain an image and reputation for the Business consistent with the standards set forth in this Agreement, the Operations Manual, or as otherwise specified by Franchisor.

Franchisee shall keep its Center clean and in good order and repair at all times.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 48

What happens if I do not successfully complete the initial training for Learningrx?

Accepted Answer

You and your designated Manager must attend training and complete the training to our satisfaction prior to opening your location. You and your designated Manager must complete the mandatory initial training program, to our satisfaction within 10 to 12 weeks of signing the Franchise Agreement. You will not be approved to open unless you have successfully completed Initial Training. We may, at our discretion, establish minimum completed assessment requirements that must be met before you will be approved to open, as outlined in the Operations Manual. If you do not successfully complete this training, you will be required to repeat the training under the same terms as initial training (no training fee but you must pay travel and living expenses). The cost of this training is covered by the Initial Training and Materials Fee for up to four persons. You will, however, be required to pay the travel and living expenses for you, your designated Manager, and your employee(s). All training, except any on-the-job training, will be held at our corporate headquarters in Colorado Springs, Colorado, or at another designated location and are held monthly. Notwithstanding the foregoing, we reserve the right to conduct any or all training virtually, as we determine in our sole discretion. After satisfactorily completing this initial training, there is no mandatory training required, however, you will be required to have center person per Center attend periodic or national conferences and we have the right to charge you a fine for not attending (See ITEM 6).

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEM, AND TRAINING (FDD pages 26–33)

Question 49

What happens if there are errors or omissions in the Learningrx General Release?

Accepted Answer

Since the purpose of this Release is to end this matter forever, should it develop that there are any errors, mistakes or any omissions in this instrument, whether legal or factual and whether mutual or unilateral, which would cause the release of the parties herein released to be defective or less than complete, then the undersigned Franchisee will sign any and all documents and do any and all things necessary to effectuate a full, final and absolute release of said party.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 50

If a Learningrx Area Developer establishes additional Centers due to increased demand, what agreement governs these additional Centers?

Accepted Answer

The Area Developer understands that, if there is an increased public demand for the products and services offered by Franchisor due to an increase in the number of individuals in the Development Territory, Franchisor will expect the Area Developer to establish additional Centers within the Development Territory. While Franchisor will not require the Area Developer to establish such additional Centers, Franchisor will strongly encourage Area Developer to do so. Any additional Center shall be governed by Franchisor's then-current form of individual franchise agreement and Franchisor and Area Developer shall execute an addendum to this Agreement reflecting the change to the Development Schedule.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 51

If a Learningrx Area Developer establishes additional Centers due to increased demand, what agreement governs these Centers?

Accepted Answer

The Area Developer understands that, if there is an increased public demand for the products and services offered by Franchisor due to an increase in the number of individuals in the Development Territory, Franchisor will expect the Area Developer to establish additional Centers within the Development Territory. While Franchisor will not require the Area Developer to establish such additional Centers, Franchisor will strongly encourage Area Developer to do so. Any additional Center shall be governed by Franchisor's then-current form of individual franchise agreement and Franchisor and Area Developer shall execute an addendum to this Agreement reflecting the change to the Development Schedule.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 52

If a Learningrx Area Developer opens more Centers than required by the Development Schedule, how does this affect future requirements?

Accepted Answer

th Franchisor's then-current Training Program (as defined in the Franchise Agreement).

![](_page_153_Picture_0.jpeg)

3.03. Franchise Agreement. Area Developer shall not commence construction on, or open any Center until, among other things, the entire Development Franchise Fee for said Center has been paid in full and the individual franchise agreement for such Center has been executed by both the Area Developer and Franchisor.

#### **4. DEVELOPMENT**

- 4.01. Development Schedule. Area Developer shall open and continuously operate the Centers in accordance with the System, and the Development Schedule set forth in **Schedule A**.
- 4.02. Excess Centers. In the event that Area Developer opens and operates a greater number of Centers than is required to comply with the current period of the Development Schedule, the requirements of the succeeding period(s) shall be deemed to have been satisfied to the extent of such excess number of Centers. Area Developer will be permitted to open Centers in excess of the number of Centers set forth in the Development Schedule subject to the prior written approval of Franchisor if, in Franchisor's sole discretion, Franchisor determines that the Development Territory could support additional Centers.
- 4.03. Monthly Reports. Area Developer agrees that it shall provide to Franchisor a monthly report of its activities and progress in developing and establishing Centers as provided herein. The monthly reports shall be submitted no later than the fifth (5th) day following the end of the preceding month during the term of this Agreement.
- 4.04. Change in Development Territory.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 53

If Learningrx begins to offer existing franchised outlets, where will specific information about those outlets be provided?

Accepted Answer

As of the date of this disclosure document, we are not offering any existing franchised outlets to prospective franchisees, including those that either have been reacquired by us or are still being operated by current franchisees pending a transfer. If we begin to offer any such outlet, specific information about the outlet will be provided to you in a separate supplement to this disclosure document.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 48–53)

Question 54

If a court deems a covenant in the Learningrx Spousal Affiliate Agreement unreasonable, does the Spousal Affiliate still have obligations?

Accepted Answer

The parties agree that each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement.

If all or any portion of a covenant in this Agreement is held unreasonable or unenforceable by a court or agency having valid jurisdiction in any unappealed final decision to which Franchisor is a part, Spousal Affiliate expressly agrees to be bound by any lesser covenant embraced within the terms of such covenant that imposes the maximum duty permitted by law as if the resulting covenant were separately stated in and made a part of this Agreement.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 55

If a court finds any part of the covenants in Section 15 of the Learningrx agreement unenforceable, does the franchisee still have obligations?

Accepted Answer

- 15.3 Independent Covenants. The parties agree that each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement. If any or all portions of the covenants in this Section 15 are held unreasonable or unenforceable by a court or agency having valid jurisdiction in an unappealed final decision to which Franchisor is a party, Franchisee expressly agrees to be bound by any lesser covenant subsumed within the terms of such covenant that imposes the maximum duty permitted by law, as if the resulting covenant were separately stated in and made a part of this Section 15.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 56

If a Learningrx franchisee cannot lawfully use the specified Marks in their territory, what must they do?

Accepted Answer

If Franchisee cannot lawfully use the Marks in the Territory, Franchisee must obtain Franchisor's written approval to use other marks.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 57

If a Learningrx franchisee has a legitimate dispute with creditors, does that affect their renewal?

Accepted Answer

Franchisee is in breach of any other term, condition, or provision of this Agreement.
- (b) Without Notice. This Agreement and license will immediately terminate without notice in the event that:
  - (vi) Franchisee misrepresented or omitted material facts which induced Franchisor to enter into this Agreement;
  - (vii) Franchisee fails to complete the required initial training or has failed to designate an acceptable site pursuant to Section 10;
  - (viii) Franchisee fails to obtain all required licenses, permits or certifications, or to hire the required licensed professionals to operate the Business within six months of signing this Agreement. A permanent or temporary receiver or trustee for the Center or all or substantially all of Franchisee's property is appointed by any court, or any such appointment is consented to or not opposed through legal action by Franchisee, or Franchisee makes a general assignment for the benefit of Franchisee's creditors or Franchisee makes a written statement to the effect that Franchisee is unable to pay its debts as they become due, or a levy or execution is made on the license, or an attachment or lien remains on the Center for thirty (30) days unless the attachment or lien is being duly contested in good faith by Franchisee and Franchisor is advised in writing;
  - (ix) Franchisee loses possession or the right of possession of all or a significant part of the Center through condemnation, casualty, lease termination or mortgage foreclosure and the Center is not relocated or reopened as provided in Section 16;
  - (x) Franchisee contests the validity of, or Franchisor's ownership of, any of the Marks in any court or proceeding;
    - (xi) Franchisee makes an unauthorized Transfer;

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- (xii) Franchisee is a business entity and any action is taken which purports to merge, consolidate, dissolve or liquidate the entity without Franchisor's prior written consent which consent shall not be unreasonably withheld.
- (xiii) Franchisee voluntarily abandons or ceases operation of the Business for more than five (5) consecutive business days; or
- (xiv) The Franchisee, any owner of the Franchisee entity, Manager, or employee is convicted of a felony, a crime involving moral turpitude, any crime or offense that is reasonably likely, in the sole opinion of the Franchisor, to materially and unfavorably affect the LearningRx System, Marks, goodwill or reputation, or charged or convicted of any crime or misdemeanor involving children.
- (c) Franchisee or Franchisee's owner or any guarantor of this Agreement starts, acquires or operates a competing business or diverts or attempts to divert current or prospective customers to a competing business in violation of the terms of the Confidentiality and Covenant Not To Compete Agreement attached to this Agreement as Attachment IX, and incorporated herein by reference.
- 13.2 Effect of Termination.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 58

If a Learningrx franchisee is in material default, can they transfer the franchise?

Accepted Answer

- 14.4 Conditions for Transfer. No Transfer of this Agreement will be approved by Franchisor or be effective unless and until:
- (a) Franchisee is under no material default in the performance or observance of any of its obligations under this Agreement and Franchisee is under no material default that materially impairs or detracts from the goodwill or brand under any other agreement with Franchisor at the time Franchisee requests permission to transfer the Business or at the time of the transfer;

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 59

If a widowed spouse or domestic partner later acquires an ownership interest in the Learningrx franchise, does the guaranty become active again?

Accepted Answer

Notwithstanding clauses (a) and (b) above, a spouse or domestic partner who is also a guarantor hereunder and who becomes widowed and who does not have (and will not obtain) an ownership interest in the Franchisee, the Agreement, or any Franchise Agreement granted thereunder as an owner, co-owner, investor, member, partner, shareholder or like capacity shall not thereafter be held responsible for any monetary obligations thereafter arising out of the terms and conditions of this Guaranty and Assumption of Obligations unless any such ownership interest is acquired in any manner by the widowed spouse or domestic partner, or the widowed spouse's children, deceased spouse's children, or domestic partner's children. Notwithstanding any change in ownership resulting from the death of a spouse or domestic partner, all monetary obligations and liabilities existing at the time of death shall continue to be an obligation of the surviving spouse or domestic partner until such obligations or liabilities shall be paid in full by the estate or by the guarantor spouse or domestic partner. Notwithstanding the limitations set forth above, any and all other non-monetary obligations of the Agreement shall remain an obligation of the surviving spouse.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 60

When is the Learningrx Interim Period Fee of $250 per month incurred?

Accepted Answer

| Name of Fee                       | Amount                                                                                                                                                                                                                                                                                                                                                                                            | Due Date    | Remarks                                                                                                                                                                                                                                                                                                                                              |
|-----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Interim Period Fee             | $250 per month during any interim period                                                                                                                                                                                                                                                                                                                                                      | As incurred | If you do not sign a new Franchise Agreement prior to the expiration of your current agreement, then at our option, you may continue to operate on a month-to-month basis until one party provides written notice to terminate. The Interim Period Fee is payable only if you operate your Center during any interim period. |

Source: Item 6 — OTHER FEES (FDD pages 13–19)

Question 61

For Learningrx, how long does a state law addendum remain in effect if it supersedes portions of the Franchise Agreement or Area Developer Agreement?

Accepted Answer

It is agreed that the applicable foregoing state law addendum, if any, supersedes any inconsistent portion of the Franchise Agreement dated, 20, and/or the Area Developer Agreement dated, 20, and of the Franchise Disclosure Document, but only to the extent they are then valid requirements of an applicable and enforceable state law, and for only so long as such state law remains in effect. DATED this day of, 20 LEARNINGRX FRANCHISE CORPORATION

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 62

Are the 'Marks' associated with the Learningrx franchise registered?

Accepted Answer

WHEREAS, the System features use of the Marks as defined below, a distinctive exterior and interior design, decor, color scheme, fixtures and furnishings for the Center, as well as uniform standards, specifications, methods, policies and procedures for store operations, proprietary inventory and management control, training and assistance, and advertising and promotional programs, all of which may be changed, improved upon, and further developed from time to time by Franchisor;

WHEREAS, Franchisor, through its dedicated operations, marketing methods, and merchandising policies, has developed the reputation, public image and good will of its System and established a firm foundation for its franchised operations consisting of the highest standards of training, management, supervision, appearance, services and quality of products;

WHEREAS, the System is identified by means of certain trademarks, including the marks **LearningRx**, **ThinkRx**, **ReadRx**, **LiftOff**, **MathRx**, **ComprehendRx, BrainSkills** and such other trade names, service marks, and trademarks as are now, and may hereafter be, designated for use in connection with the System ("**Marks**");

WHEREAS, LearningRx, Inc. has licensed and granted to Franchisor the exclusive right and license to sub-license and police the use of the System and the Marks;

WHEREAS, Franchisor continues to develop, expand, use, control and add to the Marks and the System for the benefit of and exclusive use by Franchisor and its franchisees in order to identify for the public the source of the products and services marketed thereunder and to represent the System's high standards of quality and service;

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Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 63

In Michigan, if Learningrx refuses to renew a franchise, is Learningrx required to compensate the franchisee for inventory, supplies, equipment, fixtures, and furnishings?

Accepted Answer

State of Michigan Department of Attorney General Consumer Protection Division Attn: Franchise 670 Law Building Lansing, Michigan 48913 Telephone Number: (517) 373-7117

- 8.4 Equipment, Inventory, Advertising and Services.

Franchisor will specify or approve certain equipment, inventory, and supplies used in the Business, as provided elsewhere in this Agreement.

Franchisor may negotiate marketing programs with suppliers and obtain advertising allowances or rebates for doing so and may utilize such allowances or rebates in any manner in which Franchisor elects, in its sole discretion, provided, however, that the prices for such equipment, inventory, and supplies are offered at commercially reasonable prices to Franchisee.

- 8.

Renewal.

Franchisor is under no obligation to renew this Addendum after the Initial Term.

Franchisee does not have any right to unilaterally renew this Addendum.

- 9.

Satellite Transition.

Franchisee agrees that if Franchisor licenses the right to own and operate a LearningRx Center to another franchisee, and grants to that franchisee a territory that encompasses Franchisee's Site, Franchisee must shut down its Satellite Location on or before

the date that the new franchisee opens its LearningRx Training Center. Further, Franchisee must transfer all of Franchisee's customers to the new franchisee on or before the new franchisee is prepared to open its LearningRx Training Center. Together, these events will be referred to in the Addendum as Franchisee's "**Satellite Transition**." Franchisee will have no right to compensation in the event of a Satellite Transition and will have no right to be reimbursed any portion of the Satellite Location Fee.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Question 64

In Michigan, under what conditions can Learningrx acquire the assets of a Learningrx franchise for market or appraised value?

Accepted Answer

If Franchisor has the option to purchase the business personal assets upon default or termination of the Franchise Agreement and the parties are unable to agree on the value of the assets, the value will be determined by an appraiser chosen by both parties.

Source: Item 23 — RECEIPT (FDD pages 54–209)

Learningrx 2025 FDD FAQ