After termination of the Learningrx franchise agreement, is the franchisee required to continue paying Royalty and Marketing Development Fund fees, and if so, on what basis?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.7 Post-termination payments. Franchisee is required to continue to pay Royalty and Marketing Development Fund fees based on Gross Revenues Franchisee collects on prepaid or ongoing monthly payments for use of Franchisor's training programs. In the event Franchisor agrees that Franchisee may continue to train students using Franchisor's Product after the Franchise Agreement is terminated, Franchisee may do so only until the client's prepaid or monthly payment for current program is complete. Notwithstanding the foregoing, once a client's then-current prepaid monthly program concludes, Franchisee will cease using Franchisor's Program for that client. If Franchisor grants this continuing right, Franchisee agrees that Franchisor's audit rights will survive termination of the Agreement.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, a franchisee may be required to continue paying Royalty and Marketing Development Fund fees even after the termination of the franchise agreement. Specifically, this obligation applies to Gross Revenues the franchisee collects on prepaid or ongoing monthly payments for the use of Learningrx's training programs.
If Learningrx agrees that the franchisee can continue training students using Learningrx's programs after termination, this is allowed only until the client's prepaid or monthly payment for the current program is complete. Once a client's current prepaid monthly program concludes, the franchisee must stop using Learningrx's program for that client.
Furthermore, if Learningrx grants the franchisee the right to continue training students post-termination, Learningrx's audit rights will survive the termination of the agreement. This means Learningrx retains the right to audit the franchisee's records to ensure compliance with the terms related to the continued use of their training programs and the associated revenue.