What specifications must a Learningrx Satellite Location comply with?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Grant of License. So long as the Franchise Agreement between Franchisor and Franchisee remains in good standing, Franchisor grants to Franchisee and Franchisee accepts from Franchisor, a non-exclusive right and obligation to use the System and Marks to open and operate one Satellite Location, in accordance with the terms of the Franchise Agreement. The Satellite Location must comply with all specifications set forth in Franchisor's current Operations Manual.
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Satellite Location Site.
The site (“Site”) of Franchisee's Satellite Location may be within the Territory granted to Franchisee under the Franchise Agreement, or it may be outside of the Territory granted to Franchisee under the Franchise Agreement, provided that site is not within an existing franchisee's territory granted pursuant to a valid franchise agreement.
Franchisee acknowledges and agreements that Franchisee will not receive an exclusive or protected territory for its Satellite Location.
Franchisor reserves the right to grant a territory to another franchisee which includes the Site at any time.
Royalty Fee.
The Gross Revenues for the Satellite Location shall be added to the Gross Revenues of Franchisee's Center to determine the Royalties owed to Franchisor each month.
Therefore, Franchisee must pay to Franchisor one (1) monthly royalty for both the Center granted to it under the Franchise Agreement and the Satellite Location granted to it under this Addendum, of the greater of either (i) eight percent (8%) of the combined Gross Revenues for its Center and its Satellite Location, or (ii) the Minimum Monthly Royalty, as defined in the Franchise Agreement.
Renewal.
Franchisor is under no obligation to renew this Addendum after the Initial Term.
Franchisee does not have any right to unilaterally renew this Addendum.
Franchisor may elect to grant Franchisee the right to extend this Addendum for additional three hundred, sixty-five (365) day periods (each a "Successor Term") after the expiration of the current term.
If Franchisee exercises its right to a Successor Term, it must pay Franchisor an additional Satellite Location Fee before the first day of that Successor Term.
Satellite Transition.
Franchisee agrees that if Franchisor licenses the right to own and operate a LearningRx Center to another franchisee, and grants to that franchisee a territory that encompasses Franchisee's Site, Franchisee must shut down its Satellite Location on or before
the date that the new franchisee opens its LearningRx Training Center. Further, Franchisee must transfer all of Franchisee's customers to the new franchisee on or before the new franchisee is prepared to open its LearningRx Training Center. Together, these events will be referred to in the Addendum as Franchisee's "Satellite Transition." Franchisee will have no right to compensation in the event of a Satellite Transition and will have no right to be reimbursed any portion of the Satellite Location Fee.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, a Learningrx Satellite Location must adhere to the specifications outlined in the current Operations Manual. The franchisee is granted a non-exclusive right and obligation to use the Learningrx system and marks to operate the Satellite Location, provided they comply with these specifications. This means that franchisees need to be diligent in following the guidelines and standards set by Learningrx to maintain their franchise agreement in good standing.
Furthermore, the franchisee acknowledges that they will not receive an exclusive or protected territory for their Satellite Location. Learningrx retains the right to grant a territory to another franchisee, even if it includes the Satellite Location's site. This lack of territorial protection is a significant risk for franchisees, as it could lead to increased competition and reduced revenue if Learningrx licenses a nearby Learningrx Training Center to another franchisee.
The Gross Revenues for the Satellite Location are combined with the Gross Revenues of the franchisee's main Learningrx center to calculate the monthly royalties owed to Learningrx. The franchisee must pay a monthly royalty of the greater of either 8% of the combined Gross Revenues or the Minimum Monthly Royalty as defined in the Franchise Agreement. This combined royalty structure means the financial performance of the Satellite Location directly impacts the royalty payments for the main Learningrx center, and vice versa.
Learningrx is under no obligation to renew the Satellite Addendum after its initial term, and the franchisee has no unilateral right to renew it. If Learningrx elects to grant a Successor Term, the franchisee must pay an additional Satellite Location Fee before the new term begins. Additionally, if Learningrx licenses another franchisee the right to operate a Learningrx Center in a territory that encompasses the Satellite Location's site, the franchisee must shut down the Satellite Location and transfer all customers to the new franchisee without compensation. This "Satellite Transition" clause represents a significant risk, as the franchisee could lose their Satellite Location and customer base without reimbursement of the Satellite Location Fee.