Are the fees outlined in Item 6 of the Learningrx FDD refundable?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
Fee is payable only if you operate your Center during any interim period. |
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- Fees & Costs. All fees are imposed by and are payable to LearningRx. The fees and costs in this Item 6 are uniformly imposed. All fees are non-refundable.
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- Gross Revenues. "Gross Revenues" means the total of all receipts derived from services or Products sold by you, whether the receipts are evidenced by cash, credit, checks, gift certificates, scrip, coupons, services, property, bartering, or other means of exchange. Gross Revenue excludes only sales tax receipts that you must by law collect from customers and that you actually pay to the government, promotional or discount coupons to the extent that Franchisee realizes no revenue, and employee receipt of services or Products, if free, or any portion not paid for by an employee. Cash income reports from the accounting software, without any deductions for any fees due to collection method, are used to calculate the royalty amounts due each month.
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- Minimum Monthly Royalty. You are required to pay a "Minimum Monthly Royalty" of $500 for Micro Franchises and $800 for Standard Franchises rather than 8% of your Gross Revenues if 8% of your Gross Revenues does not exceed the Minimum Monthly Royalty applicable to your franchise. This minimum starts after the Center has been in operation for 6 full months. On a quarterly basis, royalty 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 $800 would have been paid in royalties in the first month, but $80 will be credited to the Center since the quarterly royalty total paid exceeded $2,400.
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- Boost Marketing Program. You are required to spend up to $3,000 per year for Boost Marketing Program activities such as web directories, reputation management and other Boost marketing activities initiated by and paid to us. This amount is in addition to any other advertising requirement.
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- Center Marketing Program.
Source: Item 6 — OTHER FEES (FDD pages 13–19)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, the fees outlined in Item 6 are generally non-refundable. Specifically, the document states that all fees are imposed by and payable to Learningrx and that all fees are non-refundable. However, there is an exception regarding the Marketing Development Fund (MDF) and royalties.
The Learningrx FDD states that 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. For 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 credited to the Center since the quarterly royalty total paid exceeded $600. A similar crediting mechanism applies to the Minimum Monthly Royalty.
Furthermore, the Transfer Fee, which ranges from $5,000 to $10,000, is non-refundable under any circumstances once paid to Learningrx prior to their acceptance of a transfer. This means that if a franchisee attempts to transfer their Learningrx center but the transfer is not approved, the transfer fee will not be refunded. Prospective franchisees should carefully consider these non-refundable fees and the conditions under which credits may be applied before entering into a franchise agreement with Learningrx.