What happens if the Learningrx Marketing Development Fund operates at a deficit?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Learningrx's 2025 Franchise Disclosure Document, Learningrx agrees to operate the Marketing Development Fund (MDF) for the benefit of its franchisees. The franchisor can accumulate funds, carrying the balance over to subsequent years for specified purposes.
If the Marketing Development Fund operates at a deficit or needs additional funds, Learningrx reserves the right to loan funds to the MDF. The terms of this loan are determined by Learningrx at its sole discretion. This means that Learningrx has the authority to decide the interest rate, repayment schedule, and other conditions of the loan.
Learningrx may also use the Marketing Development Fund to reimburse itself for administrative expenses incurred while administering the fund. Within 120 days of the close of Learningrx's fiscal year, an unaudited annual financial statement of the MDF will be prepared and made available to franchisees upon reasonable request. This provides franchisees with some transparency into how the fund is managed and spent.