LearningRx Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
LearningRx is a brain-training franchise offering one-on-one cognitive skills programs for students and adults. Franchisees run the centers, administering assessments, delivering training sessions, and managing trainers and enrollment.
FranchiseVerdict summary · 2026
A LearningRx franchise requires a total initial investment of $150K – $220K, including a $30K – $45K franchise fee and an ongoing 8.0% royalty[2]. Per the 2025 FDD, average unit revenue was $346K[2]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $150K – $220K
- 44th pct Education
- Avg gross sales
- $346K
- 13th pct Education
- Royalty
- 8.0%
- 37th pct Education
- Units
- 43
- 52nd pct Education
- SBA charge-off
- N/A
Quick verdict · Education · color = vs category peers
Green = favorable by >10% vs Education avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $150K – $220K including a $30K franchise fee, 8.0% ongoing royalty.
- RETURNSAverage unit revenue of $346K/year (median $315K), with an estimated 20% cash-on-cash return (based on Net Operating Income (Charges)).
- RISKVerdict B (Above average), verdict score 56/100 (higher is better).
- DECLINESystem contracting at -6.7% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- LearningRx Franchise Corporation
- Parent company
- LearningRx, Inc.
- CEO title
- Chief Executive Officer
- Kim Hanson
- Incorporated in
- CO
- HQ
- 6385 Corporate Drive, Suite 101, Colorado Springs, Colorado 80919
- Auditor
- Abacus CPAs, LLC
- Audited financials
- Franchisor revenue
- $1.8M
- vs $1.6M prior year
Overview
About
- CEO
- Kim Hanson
- Headquarters
- CO
- Founded
- 2003
- FDD year
- 2025
- States available
- 21
Can you afford it, and what does the money buy?
Entry cost runs 72% below the typical education franchise.
Source: FDD 2025 · Items 5–7
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $30K | $30K |
| Working capital (3–6 mo) | $40K | $60K |
| Equipment, build-out, other | $80K | $130K |
| Total initial investment | $150K | $220K |
Source: LearningRx 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $150K – $220K
- Middle of category vs category
- Liquid capital req'd
- $40K – $60K
- Middle of category vs category
- Franchise fee
- $30K – $45K
- Top 40% of category vs category
- Royalty
- 8.0%
- tiered · typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 11.0%
- vs 9–13% typical
- Payback period
- 4.9 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 8.0% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Technology fee | $2K |
| Training fee | $10K |
| Transfer fee | $10K |
| Renewal fee | $5K |
| Inventory (initial) | $2K – $3K |
| Total fee load | 11.0% of rev |
What do units actually make?
Average unit sales run 57% below the education norm.
Source: FDD 2025 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$42K
12.0% margin
Unlevered ROIC
18%
EBITDA / total invested capital
Payback
5.7 yrs
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
FDD-reported earnings vs. model
The FDD reports $68K as Net Operating Income (Charges). Our model estimates $42K SLEBITDA from the same revenue using category-average cost assumptions. These numbers differ because Net Operating Income (Charges) deducts different expense categories than our model.
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one LearningRx unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
18%
Below the 30–60% attractive-franchise band
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 LearningRx units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$346K
on $1.7M purchase
Total debt
$1.4M
SBA $0.9M + senior + seller note
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
Financial Performance
- Avg gross sales
- $346K
- Per unit, per year
- Median gross sales
- $315K
- Avg net operating income (charges)
- $68K
- Reported as Net Operating Income (Charges) in FDD Item 19
- Cash-on-cash
- 20.2%
- Based on Net Operating Income (Charges) / investment midpoint
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross revenue
- Sample size
- 40
- vs category median 17 · large
- Range (low → high)
- $26K→$962K
- Cohort dispersion (min → max)
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2025
- The FDD edition these figures were read from
- Transparency
- 3 / 10
- vs category median 4 / 10 · below
Compared against 204 Education brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $346K/year in gross sales. Revenue-to-investment ratio: 1.9x.
Fee burden
Total ongoing fee load of 11.0% (near the Education average).
Disclosure
Transparency score 3/10 — moderate disclosure depth. Average and range data are available but detailed cohort breakdowns may be limited.
Operator retention
System contracting at -6.7% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Education averages
How LearningRx Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 43
- Opened
- 3
- Last reporting year
- Closed
- 6
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 14.3%
- Company-owned
- 1
- Corporate units in the system
- % franchised
- 98%
- vs corporate-owned
- Net growth (3-yr)
- -6.7%
- Net unit change over 3 years
- 3-yr CAGR
- -6.7%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 3
- Closed (3yr)
- 6
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 2
- Reacquired (3yr)
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 22 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 9 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 9
- Loan volume
- $1.1M
- Median loan
- $130K
- 50th percentile
- Charge-off rate
- N/A
- limited sample (9 loans) — rate not shown below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 7
- Defaults
- N/A
Explore lender portfolios on Bank Reports or regional data on State Reports.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
LearningRx presents meaningful risk due to unresolved FTC litigation shadow, opaque unit economics, stagnant system size, and inherent skepticism toward cognitive training claims in a post-FTC-settlement market.
Litigation (Item 3)
Commonwealth of Virginia vs. LearningRx Franchise Corporation, Consent Order SEC-2009-00071 (2009) - LearningRx offered one franchise in Virginia prior to completing registration; settled with $1,800 reimbursement and rescission offer to franchisee
Largest disclosed settlement: $1,800
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Abacus CPAs, LLC
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
Score breakdown · what drove the 56 / 100 verdict
- 01MINORFTC settlement (2016) regarding unsubstantiated brain training claims creates liability and reputational risk; core marketing claims were challenged
- 02MINORSmall unit count (47 locations) with unknown growth trajectory suggests stagnation or contraction; minimal scale for system support
- 03MINORAverage revenue of $333,848 barely covers royalties (8% = $26,708/yr) plus franchise fees amortization, leaving thin margins for owner income
- 04MINORPrior regulatory violation (Virginia 2009) indicates compliance issues; pattern of regulatory friction (Virginia + FTC)
- 05MINORBrain training industry faces scientific scrutiny and declining consumer confidence post-FTC action; market headwinds beyond franchisee control
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 11.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory population | 200,000 |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 50 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 1 |
| Mandatory arbitration | Yes |
| Arbitration location | Denver, Colorado |
| Jury trial waiver | Yes |
| Governing law | CO |
| Litigation count | 1 |
View Item 3 litigation summary
Commonwealth of Virginia vs. LearningRx Franchise Corporation, Consent Order SEC-2009-00071 (2009) - LearningRx offered one franchise in Virginia prior to completing registration; settled with $1,800 reimbursement and rescission offer to franchisee
Items 10, 11
Training & Operations
- Classroom training
- 38 hrs
- On-the-job training
- 30 hrs
- Training location
- Colorado Springs, Colorado (corporate headquarters); OJT at franchisee location
- Ongoing training
- Optional
- Time to open
- 6 mo
- From signing to launch
- Site selection
- franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- proprietary customer relationship management software
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: proprietary customer relationship management software
Item 20 · call current owners
Franchisee Contacts
52 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
LearningRx · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a LearningRx franchise?
The total investment to open a LearningRx franchise ranges from $150K – $220K, with an initial franchise fee of $30K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do LearningRx franchise owners earn?
According to Item 19 of the LearningRx FDD, the average gross sales per unit is $346K. The median is $315K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the LearningRx FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the LearningRx FDD and qualifies whose outlets they describe.
What is LearningRx's franchise failure rate?
SBA 7(a) loan charge-off data is not available for LearningRx (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many LearningRx franchise locations are there?
As of their most recent FDD filing, LearningRx has 43 total units in the United States, including 42 franchised units and 1 company-owned units. 3 new units were opened in the latest reporting year.
Is LearningRx a good franchise to buy?
FranchiseVerdict rates LearningRx as a B-grade franchise with a verdict score of 56 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
If you represent LearningRx, you can request corrections or provide updated information.
Other Education franchises
Compare similar franchise opportunities in the Education category
Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.