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LearningRx Franchise Costs, Fees & Profits

LearningRx Franchise Costs, Fees & Profits (2024)

Here’s what you need to know if you’re interested in opening a LearningRx franchise.

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KEY FRANCHISEE INFORMATION

Here are the most important stats to know for franchisees.

NUMBER OF LOCATIONS

46

INITIAL INVESTMENT

$153,000 – $223,000 

ROYALTY FEE

8.00%
revenue

REVENUE PER YEAR

$352,000

LearningRx is a franchise with a unique approach to cognitive enhancement, focusing on brain training rather than traditional tutoring. It was founded by Dr. Ken Gibson in August 2002 in Colorado Springs, Colorado. Dr. Gibson was inspired to start LearningRx due to his struggles with reading as a child, which he later understood to be related to cognitive skills weaknesses.

The franchise distinguishes itself from the competition by emphasizing one-on-one brain training, which aims to enhance key cognitive skills necessary for learning and performance, such as attention, memory, and reading abilities.

This approach is based on the science of neuroplasticity, which asserts that the brain can change and adapt at any age. LearningRx’s programs are designed to not just treat the symptoms of learning challenges but to identify and strengthen the underlying cognitive skills causing those challenges.

Number of locations

TOTAL UNITS
46
FRANCHISED UNITS
45

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Initial investment

INITIAL INVESTMENT
$153,000 $223,000 
Type of ExpenditureAmount
Initial Franchise Fee$30,000 – $45,000
Initial Training & Materials Fee$10,000
Marketing Launch Fee$18,000 – $30,000
Travel and Living Expenses While Training$3,000
Security Deposit, First Month’s Rent or Real Estate & Improvements$22,000 – $30,000
Furniture & Fixtures$15,000 – $25,000
Signage$5,000
Miscellaneous Opening Costs$2,000 – $3,000
Opening Inventory$2,000 – $3,000
Insurance Policies*$2,000 – $3,000
Computer Equipment & Proprietary Software$4,000 – $6,000
Additional Funds (initial three months)$40,000 – $60,000
Total$153,000 – $223,000

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Franchise fees & Royalties

INITIAL FRANCHISE FEE
$30,000 to $45,000
ROYALTY FEE
8.00%

Initial Franchise Fee

The initial franchise fee varies depending on the size of the territory: $30,000 for a micro franchise, which includes territories with less than 100,000 people, and $45,000 for a standard franchise, covering territories with 100,000 to 200,000 people. This fee is due upon signing the franchise agreement and is non-refundable.

Initial Training and Materials Fee

A fee of $10,000 is required for initial training and materials. This fee is due at the time the franchise agreement is signed and is fully earned upon payment, with no refunds under any circumstances.

Marketing Launch Fee

Franchisees are required to pay a marketing launch fee ranging from $18,000 to $30,000, depending on the territory size. This fee is due at the same time as the initial franchise fee and covers the initial sales and marketing campaign.

Royalty Fee

The royalty fee is 8% of gross revenues, with adjustments to 7.5% for revenues above $500,000 per year and 7% for revenues above $750,000 per year. The fee is due monthly based on the previous month’s gross revenues.

Marketing Development Fund (MDF) Fee

A monthly fee of 3% of gross revenues is required for the Marketing Development Fund, up to a maximum of $15,000 per calendar year per center. This fee is due monthly alongside the royalty fee.

Cooperative Advertising Requirement

During the first 6 months of operations, franchisees must spend the greater of 3% of gross revenues per month or 2/3 of the lowest amount paid by another center, up to a maximum of $3,000 per month. After 6 months, the requirement is 3% of gross revenues each month, capped at $3,000 per month.

Additional Fees

Franchisees may also incur additional fees such as the boost marketing program fee (up to $3,000 per year), center marketing program fee (up to $2,000 per month), ongoing purchase of student/trainer kits (estimated at $3,000 to $5,000 per year), transfer fee ($5,000 to $10,000), satellite location fee ($5,000 per year), and technology fee ($1,800 to $2,400 per year). Other fees include audit costs, interest on late payments, renewal franchise fee, fines for violations, and fees for seminars, conventions, and conferences.

Profits

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How to apply

1. Introduction

  • Research LearningRx to understand its unique brain training programs.
  • Consider how this franchise aligns with your business goals and values.

2. Qualification

  • Assess your financial and professional readiness.
  • Ensure you meet the initial investment requirements, including the franchise fee and other startup costs.

3. FDD Review (Franchise Disclosure Document)

  • Carefully review the FDD provided by LearningRx for detailed information on the franchise opportunity.
  • Pay close attention to financial obligations, franchisor support, and operational guidelines.

4. Due Diligence

  • Conduct thorough research and due diligence.
  • Consider consulting with current franchisees and industry experts to gain insights.

5. Discovery Day

  • Attend a Discovery Day to meet the franchisor team, understand the company culture, and clarify any questions.
  • Use this opportunity to get a feel for the LearningRx franchise system.

6. Franchise Agreement

  • Upon mutual agreement, sign the franchise agreement to formalize your commitment.
  • Prepare to embark on the franchisor-provided training programs and set up your LearningRx center.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.

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