Can Learningrx require franchisees to make payments electronically?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Unless otherwise stated, Franchisee must pay interest at the rate of one percent (1%) per month or the maximum interest rate allowed by applicable law, whichever is less, for any late payments due under this Agreement or for any payments returned to Franchisee due to insufficient funds.
Franchisee must pay any damages, expenses through appeal, collection costs, and reasonable attorneys' fees Franchisor incurs in connection with Franchisee's failure to make any required payments or in connection with any payments returned to Franchisee due to insufficient funds, plus a fine in accordance with the relevant provisions of the Operations Manual.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
The 2025 Learningrx Franchise Disclosure Document does not explicitly state whether Learningrx can mandate franchisees to make payments electronically. However, the document does state that franchisees cannot deduct credit card or debit card processing fees from gross revenue. It also specifies that cash income reports from accounting software, without deductions for collection method fees, are used to calculate royalty amounts.
Furthermore, the FDD indicates that late payments under the agreement incur interest at a rate of 1% per month, or the maximum rate allowed by law, and that the franchisee is responsible for damages, expenses, collection costs, and attorney's fees associated with payment failures or insufficient funds. These stipulations suggest that Learningrx has a vested interest in ensuring timely and reliable payment methods from its franchisees.
While the FDD does not directly address the permissibility of mandated electronic payments, the provisions regarding payment methods, late fees, and the handling of revenue calculations imply that Learningrx may prefer or encourage electronic payment methods to streamline financial transactions and reduce administrative overhead.
Prospective franchisees should seek clarification from Learningrx regarding acceptable payment methods and whether electronic payments are preferred or required. Understanding the franchisor's expectations and policies regarding payment procedures is crucial for maintaining a healthy financial relationship and avoiding potential penalties or disruptions.