Under what conditions will a Learningrx franchisee be required to pay for an audit conducted by Learningrx?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.3 Audits. Franchisee must provide Franchisor or its agents access to Franchisee's Business and computer systems to examine or audit Franchisee's Business, at any reasonable time without notice. Franchisor will bear the cost of the audit, unless Franchisee fails to report as required or understates Gross Revenue by two percent (2%) or more for any reported time period, in which case Franchisee will pay the audit cost plus interest on understated costs of one percent (1%) per month. Franchisee must immediately pay to Franchisor all sums owed in addition to any other remedies p
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, Learningrx typically bears the cost of auditing a franchisee's business. However, a Learningrx franchisee will be responsible for covering the expenses of an audit under specific circumstances.
Specifically, the franchisee is required to pay for the audit if they fail to report financial information as mandated by Learningrx. Additionally, if the audit reveals that the franchisee has understated their Gross Revenue by two percent (2%) or more for any reported time period, they will be responsible for the audit costs.
In addition to covering the audit expenses, the Learningrx franchisee must also pay interest on the understated costs at a rate of one percent (1%) per month. The franchisee is obligated to remit all sums owed to Learningrx immediately, alongside any other applicable remedies.