Can the Learningrx Franchisor loan funds to the Marketing Development Fund?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
regard to the Marketing Development Fund. Franchisor agrees to operate the Marketing Development Fund for the benefit of the franchisees. Franchisor may accumulate these funds, and the balance may be carried over to subsequent years and used for the purposes stated in this Agreement. If the Marketing Development Fund operates at a deficit or requires additional funds at any time, Franchisor reserves the right to loan such funds to the Marketing Development Fund on such terms as determined by Franchisor, in Franchisor's sole discretion. Franchisor may also utilize the Marketing Development Fund to reimburse itself for administrative expenses incurred in administering the Marketing Development Fund. An unaudited annual financial statement of the Marketing Development Fund will be prepared within one hundred twenty (120) days of the close of Franchisor's fiscal year and will be available to Franchisee upon reasonable request.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, Learningrx has the right to loan funds to the Marketing Development Fund. The Marketing Development Fund is used to develop marketing for the Learningrx system. Franchisees are required to pay into this fund, with the amount being the greater of 3% of gross revenue per month, or a minimum payment of $200 for Micro Franchises and $300 for Standard Franchises, up to a maximum of $15,000 per calendar year per center.
Learningrx will hold the Marketing Development Fund contributions in a separate bank account and will use the fund for development expenses such as creating marketing and sales tools, maintaining websites, internet marketing, digital marketing campaigns, social media campaigns, media production, public relations, research studies, and agency costs. Learningrx may also use the fund to reimburse itself for administrative expenses incurred in administering the Marketing Development Fund.
Learningrx states that if the Marketing Development Fund operates at a deficit or requires additional funds, Learningrx reserves the right to loan such funds to the Marketing Development Fund. The terms of any such loan are determined by Learningrx at its sole discretion. An unaudited annual financial statement of the Marketing Development Fund will be prepared within 120 days of the close of Learningrx's fiscal year and will be available to franchisees upon reasonable request.