Who manages the Marketing Development Fund for Learningrx franchises?
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, the Marketing Development Fund is managed by Learningrx itself. The document states that Learningrx agrees to operate the Marketing Development Fund for the benefit of its franchisees. This fund is used for various marketing and development expenses, such as creating marketing and sales tools, maintaining websites, and conducting digital marketing campaigns.
Learningrx has the discretion to accumulate these funds, carry over balances to subsequent years, and even loan money to the fund if it operates at a deficit. They can also use the fund to reimburse themselves for administrative expenses incurred while managing it. While franchisees contribute to the fund, Learningrx emphasizes that expenditures may not be directly proportionate to individual contributions or provide a direct benefit to each specific franchisee.
This arrangement means that while franchisees are required to contribute to the Marketing Development Fund, Learningrx has significant control over how the money is spent. Franchisees should be aware that Learningrx's decisions regarding the fund's use are made at their sole discretion, and they do not have a fiduciary duty to the franchisees in managing the fund. An annual financial statement of the Marketing Development Fund will be available to franchisees upon reasonable request within 120 days of the close of Learningrx's fiscal year.