According to the FDD, what pre-opening services does Learningrx provide to franchisees?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
In allocating the transaction price and recognizing the revenue associated with initial franchise fees, the Corporation has elected to adopt the practical expedient for private company franchisors outlined in ASC 952-606, Franchisors—Revenue from Contracts with Customers. The practical expedient allows franchisors to account for pre-opening services as a single distinct performance obligation. These preopening services include the following:
- Assistance in the selection of a site
- Assistance in obtaining facilities and preparing the facilities for their intended use, including related financing, architectural, and engineering services, and lease negotiation
- Training of the franchisee's personnel or the franchisee in the LearningRx processes and systems
- Preparation and distribution of manuals and similar material concerning operations, administration, and record keeping
- Bookkeeping, information technology, and advisory services, including setting up the franchisee's
- Inspection, testing, and other quality control programs
The Corporation has determined that the fair value of pre-opening services exceeds the initial fees received; as such, the initial fees are allocated to the pre-opening services, which are recognized as revenue upon commencement of operations.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, the company outlines several pre-opening services they offer to franchisees. These services are considered a single distinct performance obligation by Learningrx. These encompass a range of support mechanisms designed to aid franchisees in establishing their Learningrx center.
Specifically, Learningrx provides assistance in selecting a suitable site for the franchise and helps in securing and preparing the facilities, including support with financing, architectural and engineering services, and lease negotiations. This comprehensive approach to site selection and preparation aims to set franchisees up for success from the outset.
Furthermore, Learningrx offers training for the franchisee's personnel or the franchisee themselves, focusing on the Learningrx processes and systems. They also prepare and distribute operational manuals and materials related to administration and record-keeping. Additionally, Learningrx provides bookkeeping, IT, and advisory services, including setting up the franchisee's systems, alongside inspection, testing, and quality control programs. The FDD states that the fair value of these pre-opening services exceeds the initial fees received, and as such, the initial fees are allocated to these services, which are recognized as revenue upon commencement of operations.