During the first 6 months of operation, what is the maximum Cooperative Advertising Requirement for a Learningrx franchisee?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
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 cooperati
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEM, AND TRAINING (FDD pages 26–33)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, during the first 6 months of operation, franchisees may be required to contribute to a local advertising cooperative. This contribution is determined by the greater of 3% of gross revenues or two-thirds of the lowest amount paid by another Learningrx center in the cooperative. However, the contribution cannot exceed what Learningrx terms the "Maximum Cooperative Advertising Requirement," which is capped at $3,000 per month.
This means that a new Learningrx franchisee needs to budget for potential advertising costs from the outset. Even if their initial revenues are low, they could still be required to pay a significant amount, up to $3,000 per month, if other centers in the cooperative are paying higher amounts. This requirement can be imposed even if the franchisee is not otherwise required to spend money on local advertising.
After the first six months, the contribution requirement may continue, with franchisees potentially needing to spend up to 3% of their gross revenues on cooperative advertising each month, still subject to the same Maximum Cooperative Advertising Requirement of $3,000. The advertising cooperative is responsible for Yellow Pages advertising in the metropolitan area and must provide annual financial statements to Learningrx and all franchisees in the cooperative. Prospective franchisees should inquire about the formation status of local advertising cooperatives in their area to better understand potential advertising obligations.