Are Learningrx advertising cooperatives required to operate from written governing documents?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
ous 12-month period and the franchisee fails to meet its minimum marketing requirements for the past 12 months.
Advertising Cooperatives: You may, but are not obligated to, join with 1 or more other Franchisees or company-owned Centers in your market area (defined as the immediate metropolitan area within a radius of 25 miles) to form a local cooperative which shall be established and administered by a majority vote of the franchisees in the region in which you operate your Center. We reserve the right to require you to join any advertising cooperative we form. The cooperative will not be required to operate from written governing documents. The local advertising cooperative, when formed, will also assume responsibility for Yellow Pages advertising in the metropolitan area in which the cooperative operates. In your first 6 months of operation you may be required to spend the greater of 3% of Gross Revenues or 2/3 of the lowest amount paid by another Center in the cooperative, but not more than $3,000.00 per month (the "Maximum Cooperative Advertising Requirement"), toward the cooperative advertising. Beginning the 7th month of operations, you may be required to spend up to 3% of your Gross Revenues toward the cooperative advertising each month, but not more than the Maximum Cooperative Advertising Requirement each month. The cooperative may impose this requirement on you even if you are not otherwise required to spend money on local advertising. All franchises (including company owned) in the cooperative will contribute to the fund at the same rates. We may accumulate contributions to the Advertising Cooperative, and the balance may be carried over to subsequent years. We may also loan funds to the Advertising Cooperative at such times and on such terms as we determine, in our discretion. No cooperative funds will be used to sell franchises. The advertising cooperative must prepare annual financial statements, which must be delivered to us and all the franchisees in the cooperative within 120 days after our fiscal year end. As of the last fiscal year, no cooperatives were formed, therefore no monies were spent on advertising or carr
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEM, AND TRAINING (FDD pages 26–33)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, advertising cooperatives are not required to operate from written governing documents. Learningrx franchisees may join with other franchisees or company-owned centers to form a local advertising cooperative within a 25-mile radius, established and administered by a majority vote of franchisees in the region. However, Learningrx reserves the right to require franchisees to join any advertising cooperative it forms.
The local advertising cooperative assumes responsibility for Yellow Pages advertising in the metropolitan area. During the first 6 months, franchisees may be required to spend the greater of 3% of gross revenues or 2/3 of the lowest amount paid by another center in the cooperative, but not more than $3,000 per month. After the first 6 months, franchisees may be required to spend up to 3% of gross revenues, but not more than the $3,000 Maximum Cooperative Advertising Requirement each month.
All franchises, including company-owned centers, contribute to the advertising cooperative at the same rates. Learningrx may accumulate contributions and carry over the balance to subsequent years and may also loan funds to the cooperative. The advertising cooperative must prepare annual financial statements, delivered to Learningrx and all franchisees in the cooperative within 120 days after Learningrx's fiscal year end. As of the last fiscal year, no cooperatives were formed, and therefore no monies were spent on advertising or carried forward. Learningrx retains the right to form, change, dissolve, or merge advertising cooperatives at its discretion.