How is 'Gross Revenue' defined for a Learningrx Training Center?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
operating and promoting the Business pursuant to the Franchisor's distinctive business format, plans, methods, data, processes, supply systems, marketing systems, formulas, techniques, designs, layouts, operating procedures, Marks and information and know-how of the Franchisor and such other information as may be further developed periodically by the Franchisor.
- 1.6 "Gross Revenue" means the total of all receipts derived from services or products sold at the Center, whether the receipts are evidenced by cash, credit, checks, gift certificates, scrip, coupons, services, property, bartering, or other means of exchange. "Gross Revenue" shall exclude only sales tax receipts that Franchisee must by law collect from customers and that Franchisee actually pays to the government, promotional or discount coupons, refunds and other courtesy discounts 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. Franchisee may not deduct any credit card or debit card processing fees from Gross Revenue.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, Gross Revenue is defined as the total income from services or products sold at the Learningrx center. This includes all forms of payment, such as cash, credit, checks, gift certificates, scrip, coupons, services, property, bartering, or other means of exchange. This definition is important because Learningrx franchisees typically pay royalties based on a percentage of Gross Revenue.
However, the definition of Gross Revenue does allow for some exclusions. Learningrx franchisees can exclude sales tax receipts that they are legally required to collect from customers and actually pay to the government. They can also exclude promotional or discount coupons, refunds, and other courtesy discounts, but only to the extent that the franchisee does not realize any revenue from them. Additionally, employee receipt of services or products can be excluded if they are free, or for any portion not paid for by an employee.
It is important to note that Learningrx franchisees cannot deduct credit card or debit card processing fees from Gross Revenue. This means that the royalty calculation will be based on the total revenue before these fees are deducted. For franchisees operating a Satellite Location, Gross Revenue includes the total of all receipts derived from services or products sold at both the main Learningrx center and the Satellite Location. This combined Gross Revenue is used to determine the royalties owed to Learningrx each month.
Prospective Learningrx franchisees should carefully consider this definition of Gross Revenue, as it directly impacts the amount of royalties they will be required to pay. Understanding what is included and excluded from Gross Revenue is essential for accurate financial planning and reporting. Franchisees should also be aware of the specific rules regarding Satellite Locations, if applicable, as the combined revenue calculation can affect their royalty obligations.