How is the Area Development Fee calculated for Learningrx, considering the Initial Franchise Fee and Initial Training and Materials Fee?

According to Learningrx's 2025 Franchise Disclosure Document, the Area Development Fee is a percentage of the combined Initial Franchise Fee and Initial Training and Materials Fee. Specifically, the Area Development Fee is equal to 35% of the value of Learningrx's then-current Initial Franchise Fee and Initial Training and Materials Fee, multiplied by the number of additional centers, after the initial center, granted under the Area Development Agreement. This fee grants the right to open and operate additional Learningrx centers, provided the franchisee complies with the development obligations outlined in the Area Developer Agreement.

For example, if a franchisee chooses to open more than two Learningrx centers, the Area Development Fee will increase. The increase is either $10,500 for each additional Micro Center or $15,750 for each additional Standard Center, after the initial center, that Learningrx grants the right to open and operate under the Area Developer Agreement. This tiered fee structure incentivizes franchisees to expand their operations while ensuring Learningrx receives compensation for granting additional territorial rights.

In practical terms, a prospective Learningrx area developer needs to carefully consider the number of centers they plan to open, as this directly impacts the Area Development Fee. Understanding the distinction between Micro and Standard Centers is also crucial, as the additional fee per center varies significantly. This fee is paid upfront upon signing the Area Development Agreement, so franchisees must have sufficient capital available. The document also mentions a Development Franchise Fee, paid at the time of signing each additional franchise agreement for additional centers, which is detailed further in Item 5 of the FDD.