Under what conditions related to advertising expenditure requirements can a Learningrx franchisee lose their territory or have their Franchise Agreement terminated?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
mpaign. Franchisee is required to pay for an Initial Marketing Campaign of between Fifteen thousand and 00/100 Dollars ($15,000.00) and Thirty thousand and 00/100 Dollars ($30,000.00), depending on the size of the Territory and as indicated in Attachment I for an initial sales and marketing opening campaign with Franchisors approved marketing consultant for media, print, and marketing materials and products, and brand management.
- 9.4 Local Advertising. Franchisee is required to promote the franchise and advertise on a local basis. Franchisee will be required to spend the greater of Two thousand Dollars ($2,000.00) for a Micro Franchise and Three thousand and 00/100 Dollars ($3,000.00) for a Standard Franchise or five percent (5%) of Gross Revenues per month on local advertising and promotion. Franchisee's entire Local Advertising minimum required amount must be paid to independent third parties. Franchisee's failure to spend the Local Advertising amount required may result in the reduction or elimination of the Franchisee's Territory or the termination of this Agreement, in Franchisor's sole discretion.
- 9.5 Boost Marketing Program. Franchisee must spend up to Three thousand and 00/100 Dollars ($3,000.00) per year for Boost marketing activities such as web directories, reputation management and other Boost marketing activities, initiated by and paid to Franchisor. This amount is in addition to any other advertising requirement. Any amount that Franchisee spends on the Boost Marketing Program will count towards Franchisee's local advertising requirements.
- 9.6 Center Marketing Program. After the first year, the Center Marketing Program ("Center Marking Program"), will be required of a Center that generates less than Three hundred th
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, a franchisee's failure to meet local advertising expenditure requirements can lead to the loss of their territory or termination of the Franchise Agreement. Specifically, Learningrx requires franchisees to spend a minimum amount on local advertising and promotion each month. This amount is the greater of $2,000 for a Micro Franchise or $3,000 for a Standard Franchise, or 5% of Gross Revenues.
The FDD specifies that the entire local advertising minimum must be paid to independent third parties. This means that franchisees cannot fulfill this requirement through in-house advertising efforts or by paying affiliated entities. This condition ensures that advertising funds are genuinely invested in reaching local customers through external channels.
Learningrx retains sole discretion in deciding whether to reduce or eliminate a franchisee's territory or terminate the agreement due to failure to meet the local advertising spending requirements. This clause gives Learningrx significant power to enforce its advertising standards, and prospective franchisees should carefully consider their ability to meet these financial obligations. Additionally, after the first year, franchisees may be required to participate in the Center Marketing Program if they do not meet minimum revenue requirements and fail to meet minimum marketing requirements, and amounts spent on this program count towards local advertising requirements.