Is a Learningrx franchisee required to join an Advertising Cooperative?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
e spends on the Center Marketing Program will count towards Franchisee's local advertising requirements.
- 9.7 Advertising Cooperatives. Franchisee may, but is not obligated to, join with one or more other Franchisees or company-owned Centers in the market area (defined as the immediate metropolitan area within a radius of twenty-five (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 Franchisee operates its Center. Franchisor reserves the right to require Franchisee to join any advertising cooperative formed. 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 six (6) months of operation you may be required to spend the greater of three percent (3%) of Gross Revenues or two-thirds (2/3) of the lowest amount paid by another Center in the cooperative, but not more than Two thousand and 00/100 Dollars ($2,000.00) for Micro Franchise and Three thousand and 00/100 Dollars ($3,000.00) for Standard Franchise per month, toward the cooperative advertising. Beginning the seventh (7th) month of operations, you may be required to spend up to three percent (3%) of your Gross Revenues toward the cooperative advertising, but not more than Two thousand and 00/100 Dollars ($2,000.00) for Micro Franchise and Three thousand and 00/100 Dollars ($3,000.00) for Standard Franchise per month, toward the cooperative advertising. The cooperative may impose this requirement on you even if you are not otherwise required to spend money on local advertising. All franchises, company and affiliate owned Center's 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 cooperative Fund 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 other Franchisees in the cooperative within one hundred and twenty (120) days after our fiscal year end. Any amount that Franchisee spends on the local advertising cooperative will count towards Franchisee's local advertising requirements.
9.8 Advertising and Marketing Materials.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, franchisees may be required to join a local advertising cooperative. Learningrx reserves the right to mandate participation in any advertising cooperative that is formed. The cooperative is administered by a majority vote of the franchisees in the region and does not need to operate from written governing documents. The local advertising cooperative assumes responsibility for Yellow Pages advertising in the metropolitan area where it operates.
During the first six months of operation, Learningrx franchisees may be required to spend the greater of 3% of Gross Revenues or two-thirds of the lowest amount paid by another center in the cooperative, with a maximum of $2,000 per month for Micro Franchises and $3,000 per month for Standard Franchises. Starting in the seventh month, franchisees may be required to spend up to 3% of their Gross Revenues, with the same maximum amounts of $2,000 or $3,000 per month for Micro and Standard Franchises, respectively. This requirement can be imposed even if the franchisee is not otherwise required to spend money on local advertising.
All franchises, company-owned centers, and affiliate-owned centers within the cooperative contribute at the same rates. Learningrx may accumulate contributions and carry over the balance to subsequent years, and may also loan funds to the cooperative. Cooperative funds cannot be used to sell franchises. The advertising cooperative must prepare annual financial statements, which are delivered to Learningrx and other franchisees in the cooperative within 120 days after Learningrx's fiscal year end. Any amount spent on the local advertising cooperative counts towards the franchisee's local advertising requirements.
However, Learningrx franchisees are not obligated to join with other franchisees or company-owned centers to form a local cooperative. If a cooperative is formed, it will be established and administered by a majority vote of the franchisees in the region in which the franchisee operates.