Owning an education franchise

We tend not to think of educators as entrepreneurs, instead seeing teaching as a life of service and sacrifice. But some educators are able to do well by doing good, either by starting their own education-related businesses or by owning and operating education franchises.

Education franchises come in several varieties, from child care facilities to adult learning centers to organizations that offer tutoring in a wide range of subjects. These businesses are part of a large market for educational services in this country: some 58,113 education franchises operated in the United States in 2008, according to the Educational Franchise Industry Report 2011.  The report was produced by Franchise Help, the world's largest independent information resource company for those considering franchising. 

The report is optimistic about the prospects for education franchise owners, noting that over the next five years, the educational services field is projected to grow at 5 percent per year. Education franchises are likely to see net profits averaging between 2 and 10 percent, with most revenue coming from tuition and program fees. However, franchisees may face competition from online schools, which are likely to grow. And it may prove challenging to find qualified teachers (who are, after all, the backbone of any educational undertaking).

So before leaping in, it's worth performing a careful analysis of the market in which you plan to operate. Will it be possible to attract enough qualified staff? Is there a substantial population of parents with the disposable income to spend on tutoring? Is there a demand for daytime child care of the type you hope to provide? 

In addition, before putting down the often substantial amount of startup cash required, it's important to closely examine the contractual obligations, assess all costs and fees involved, and comb through information related to the company's financial health: bankruptcy filings, litigation, financial statements, etc. And it's a good idea to talk to as many current and former owners that you can. They are uniquely qualified to tell you about the franchise's benefits and pitfalls.

You also need to find a franchise that will help you meet your financial goals while also accommodating your lifestyle. Some franchises, such as those that connect tutors with students, can be run from a home office and on a flexible schedule. For example, owners of Club Z! In-Home Tutoring Services recruit and manage tutors who go into students' homes . The business therefore has very low overhead (and comparatively low costs: franchise fees between $19,750 and $44,750, with a total investment of $27,650 to $56,600, according to the Entrepreneur Magazine online ).

Day care centers, learning centers or other franchises where students and teachers meet in a classroom setting require an investment in real estate, and therefore the commitment and costs are greater. Sylvan Learning Centers, which offers personalized instruction at 882 locations, requires franchise fees between $42,000 and $48,000, with a total investment ranging from $179,569 to $305,590.

In general, a background in teaching is not required to buy an education franchise. A talent for business management and a desire to be part of the educational process can prove excellent qualifications. However, teachers, school administrators, day care workers or others in the education field may find their experience helpful as they leap into the daily management of an education franchise.