What is included in the definition of 'Gross Revenue' for a Learningrx franchise?
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. Cash income reports from the accounting software, without any deductions for any fees due to collection method, are used to calculate the royalty amounts due each month.
- 1.7 "Operations Manual" means Franchisor's Operations Manual and other written or digital materials, including information posted on Franchisor's Website and information sent to or accessed by Franchisee in print or electronic form, Operations Manuals, written procedures, memoranda and their supplements loaned to Franchisee by Franchisor.
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 of all receipts derived from services or products sold at the Learningrx center. This includes receipts evidenced by various forms of payment such as cash, credit, checks, gift certificates, scrip, coupons, services, property, bartering, or other means of exchange. This comprehensive definition ensures that all revenue streams are accounted for when calculating royalties and other fees owed to Learningrx.
However, the definition of 'Gross Revenue' does allow for a few specific exclusions. Franchisees can exclude sales tax receipts that they are legally obligated to collect from customers and actually remit to the government. Promotional or discount coupons, refunds, and other courtesy discounts are also excluded, but only to the extent that the franchisee realizes no revenue from them. Additionally, the value of services or products provided to employees free of charge, or any portion not paid for by an employee, can be excluded from Gross Revenue.
It is important to note that Learningrx franchisees are specifically prohibited from deducting credit card or debit card processing fees from Gross Revenue. This means that the royalty calculation is based on the total revenue before any deductions for these processing fees. The FDD specifies that cash income reports from the accounting software, without any deductions for any fees due to collection method, are used to calculate the royalty amounts due each month.
For franchisees operating a Satellite Location, the definition of Gross Revenue also includes the total of all receipts derived from services or products sold at the Satellite Location. The Gross Revenues for the Satellite Location are added to the Gross Revenues of the Learningrx Center to determine the Royalties owed to Learningrx each month. This combined revenue is then used to calculate the monthly royalty fee, which is the greater of either 8% of the combined Gross Revenues or the Minimum Monthly Royalty as defined in the Franchise Agreement.