All Posts in Category: Education Franchises
Quick-service restaurants continue to dominate the franchising landscape. They make up over 20 percent of Entrepreneur’s 36th annual Franchise 500®. Yet, three other business sectors combined account for one-third of the companies on the 2014 list. Can one of the following fast-growing sectors overtake quick-service restaurants with the most franchise companies in 2015?
Maintenance service franchises account for 12.6 percent of the Franchise 500®. What makes these franchises so popular? For one, they have low start-up costs, most of which are for purchasing tools and supplies. Many maintenance franchises, (especially cleaning ones), can be operated out of the owner’s home. They’re ideal for people who dream of owning a business but have a limited budget on which to operate it. Residential cleaning and restoration services are increasingly popular. So are businesses that offer environmentally friendly solutions for cleaning, pest control and odor elimination.
Tied with the maintenance sector at 12.6 percent of the Franchise 500® is the personal care business sector. Fitness franchises have 21 companies on the list while senior-care companies have 23. Fitness studios are becoming more popular than the big-box gyms. Potential franchise owners find their lower costs more attractive than those for the big-box gyms. Start-up costs for one-third of the fitness franchises on the Fortune 500® are less than $100,000.
The highest ranked senior-care franchises have been around for at least 15 years. However, America’s aging population is motivating entrepreneurs to introduce new products and services in this sector. Home-accessibility equipment and patient advocacy are just two of the developing industries. People looking for a franchise opportunity in an emerging business should look into senior-care possibilities.
Parents love to invest in their children. Everything from preschools to tutoring services to other programs that supplement traditional education are increasing in popularity. That’s why children’s business franchises make up 8.2 percent of the companies on the Fortune 500®. One of the hottest segments in this sector is STEM (science, technology, engineering, and mathematics). Tutoring franchise Mathnasium showed impressive growth in 2014 and made it into the top 100 for the first time. Another popular franchise is Bricks 4 Kidz, a Lego engineering company that’s one of the youngest companies on the list.
So is it possible for one of the three fastest growing sectors to overtake quick-service restaurants as king of the franchises? If any of them can, it might be the personal care sector. Growth has slowed in the maintenance franchise sector due to high-profile lawsuits filed by franchisees, which are exposing some of the industry’s unsavory business practices. Children’s businesses are growing but still trail quick-service restaurants by more than 10 percent. The personal care has a lot of ground to cover to overtake quick-service restaurants, but innovative products and services and a growing need to support the country’s longer living population might give this sector the impetus it needs to become number one.
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By Annie McGreal
Nelson Mandela once said, “Our children are our greatest treasure. They are our future.” To invest in a child education franchise is to truly invest in the future of students- and your business. The tutoring and child education industry is expected to grow by at least 5 percent in the next few years, and these five franchises are setting the curve. Huntington Learning Centers, Inc. provides supplemental academic services and exam preparation. In 2014, the company ranked #311 on Entrepreneur magazine’s Franchise 500. There are currently locations in 38 states and the chain is looking to expand. The initial franchise fee is $22,000 and the total investment lies between $98,300-$198,200, according to their website. A net worth of $150,000 and $60,000 of available liquid cash is required, but no background in education is necessary to open a center. Huntington does, however, provide a training program for all new franchisees because absentee ownership is not allowed. There is an ongoing royalty fee of 9.5 percent, and the term of financial agreement is 10 years and renewable. Kumon Math and Reading Centers apply the Kumon method of a strong foundation in the basics to help children steadily increase their math and reading skills. With over 2,000 North American locations, Kumon also wants to increase their number of units worldwide. The company, which has been named the top tutoring service franchise by Entrepreneur magazine for thirteen straight years, has a franchise fee of $1,000 and an ongoing royalty fee of $32-36/student/mo. The minimum franchise lease term is five years and the total investment varies between $72,187 and $149,319. The financial requirements include a net worth of $150,000 and $70,000 of available liquid cash. Kumon does not require a teaching background, but encourages franchisees with some business experience and “a passion for and dedication to education and working with children.” Absentee ownership is not permitted, and like Huntington, Kumon provides a franchisee training/instructor development program. Sylvan Learning Centers is another personalized instructional service, and its new, online model called “Sylvan Satellites” was listed as one of the Franchise Times’ “20 To Watch” in January 2013. This online platform may help Sylvan to branch into more types of communities. The franchise fee falls between $42,000 and $48,000, with the total investment between $151,179 and $267,250. Sylvan’s ongoing royalty fee is 8-9 percent and the term of franchise agreement is renewable after 10 years. Training is provided, but franchisees must first have a net worth of $250,000 and $75, 000 of available liquid cash. All current franchisees are also owner/operators, and as a veteran incentive, there is a 10 percent discount on the franchise fee. Goddard Systems, Inc. is the franchisor of The Goddard School, an educational childcare facility. In 2014, it was named the top US childcare franchise by Entrepreneur magazine for the thirteenth year in a row. The number of schools has increased each year and the company is looking to grow beyond their current 410 franchise units. The initial franchise fee is $135,000 and the ongoing royalty fee is 7 percent. There is a required net worth of $650,000 and $150,000 of available liquid cash for a total investment of between $704,700 and $880,200. The financial agreement is a renewable 15-year term, and because 20 percent of all franchisees own more than one unit, veterans receive $20,000 off the franchise fee. Absentee ownership is not allowed at The Goddard School, a franchise for entrepreneurs who want to “go into business for themselves, not by themselves.” Mathnasium Learning Centers exclusively provide math instruction through the personalized “Mathnasium Method.” Since its establishment in 2002, this fast-growing franchise has expanded to more than 450 locations on four continents. According to their website, the franchise fee is around $40,000 and the total investment expense ranges from $99,250 to $139,000. For veterans, there is a 40 percent discount on the franchise fee. Mathnasium charges 10 percent for the ongoing royalty fee and the term of franchise agreement is five years and renewable. The financial requirements for franchisees are a net worth of $100,000 and $55,000 of available liquid cash.
By Erin Cizek