Learningrx Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$148,000 - $220,000
Franchise Fee
$30,000
Min Cash Required
$20,000
Total US Locations
47
Business Summary
LearningRx Training Center operates businesses that provide learning enhancement, cognitive training (also known as brain training), and math and reading courses using programs and products designed by LearningRx.
Corporate History
LearningRx Franchise Corporation was incorporated in Colorado in January 2003 and began offering LearningRx Center franchises in February 2003. LearningRx Franchise Corporation's parent company has operated a similar company-owned center in Colorado Springs since August 2002.
Financial Overview
Investment Range
$148,000 - $220,000
Franchise Fee (Low)
$30,000
Franchise Fee (High)
$45,000
Minimum Cash Required
$20,000
Royalty %
8%
Marketing %
3%
Equipment Costs (Low)
$21,000
Equipment Costs (High)
$34,000
Working Capital
$50,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
LearningRx Franchise Corporation's financial statements show a strong financial position with increasing cash and cash equivalents and healthy working capital. The company reported a significant increase in net income from $7,181 in 2023 to $169,308 in 2024. The independent auditors have not identified any substantial doubt about LearningRx Franchise Corporation's ability to continue as a going concern.
Financing Details
LearningRx Franchise Corporation does not offer any direct or indirect financing to franchisees and does not guarantee any notes, leases, or obligations.
Performance Metrics
Total US Locations
47
Franchised Units
46
Corporate Units
1
Avg Square Footage
900
Franchising Since
2003
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
2
Litigation Summary
LearningRx Franchise Corporation has two disclosed litigation cases. In 2009, LearningRx Franchise Corporation settled with the Commonwealth of Virginia for offering a franchise without completing registration, which involved a rescission offer to the consumer and an $1,800 reimbursement for administrative costs. In 2016, the Federal Trade Commission (FTC) filed an action against LearningRx Franchise Corporation and Ken Gibson, alleging unsubstantiated claims about the benefits of its brain training programs. LearningRx disputed these allegations but settled to avoid litigation. The settlement required specific types of scientific evidence, including randomized controlled trials, for certain claims, and involved a $200,000 settlement payment, with the remainder of a $4,000,000 judgment suspended. LearningRx has since completed over 20 studies, including randomized controlled trials, to comply with new FTC regulations.
Bankruptcy History
LearningRx Franchise Corporation has no bankruptcy history to disclose.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew, LearningRx franchisees must be in good standing, ensure all payments are current, and pay a renewal franchise fee. The renewal fee varies based on the franchise type (Micro or Standard) and previous calendar year's gross revenue performance. Franchisees will also need to sign a new franchise agreement, which may have materially different terms and conditions from their original contract, although the territory boundaries will remain the same.
Training & Support Program
Franchisor Assistance
LearningRx Franchise Corporation provides extensive assistance to its franchisees. Before opening, LearningRx helps with designating the territory, approving the chosen location, and offering limited advice on site selection and lease negotiation. It also provides digital access to its comprehensive Operations Manual and approves the center's design plans. Franchisees also receive initial training, lasting approximately 40 hours over 5 days, for up to four people at the corporate headquarters (or virtually). This training includes 2-3 days of on-site assistance at the franchisee's location during the opening phase. Ongoing support includes research on new products and services, continuous advisory services by phone, inclusion of the center's information on the LearningRx website, and potentially an information database and centralized purchasing system. LearningRx also organizes mandatory regional or national conferences and provides sales training for centers that fall below certain consultation closure rates. Additionally, LearningRx supplies advertising and promotional materials.
Initial Training Hours
68
Training Location
Corporate headquarters in Colorado Springs, CO
Ongoing Support
LearningRx Franchise Corporation provides ongoing support to its franchisees through research into new products, services, and business methods. It offers continuous advisory services by telephone during normal business hours and may conduct field visits. Franchisees' centers are listed on the LearningRx website, and an information database and centralized purchasing system may be provided. LearningRx holds periodic mandatory regional or national conferences for franchisees and offers sales training to centers that do not meet specific consultation closure rates. Additionally, the franchisor supplies advertising and promotional materials.
Franchise Requirements
Ideal Candidate Profile
LearningRx Franchise Corporation seeks qualified individuals to operate a LearningRx Training Center. Franchisees or a designated onsite manager, who have completed the training program, must directly supervise and participate in the day-to-day operation of the center. Franchisees are also expected to maintain minimum sales performance levels. The franchisor retains the sole discretion to determine who is qualified.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
Hands-On
Territory Type
Non-Exclusive
Territory Size Requirements
LearningRx Training Center territories are defined by population size. A Micro Franchise covers an area with less than 100,000 people, while a Standard Franchise includes 100,000 to 200,000 people. These territories may be delineated using boundary streets, highways, counties, or zip codes.
Staffing Notes
LearningRx Training Center requires either the franchisee or a designated onsite manager to directly supervise and participate in the day-to-day operations. Franchisees must maintain a competent, conscientious, and trained staff, ensuring good customer relations, prompt, courteous, and knowledgeable service, and adherence to all minimum standards set by LearningRx. All employees must undergo background checks at least once every three years, as specified in the Operations Manual. Initial training for the franchisee, a manager, and up to two additional employees is provided.