Industry Insight

2020 Franchise Industry Snapshot: Education Franchises

Too Long; Didn’t Read

  • Average initial investment: $79,377 - $149,538
  • Average Franchise fee: 28,595
  • Average Royalty: 10.25%
The Oakscale team took a look at the top 10 most popular education franchises in America and broke down the numbers.

Tutoring has been around for centuries helping students better understand subject matter and succeed in school. While many tutors operate independently, franchise companies have emerged with proprietary methods for better educating students, and they own a huge percentage of the market share. If you’re a parent that is short on time, it may be more efficient to choose a trusted franchise that has helped thousands or millions of students succeed than it is to pick an individual tutor and hope their methods are effective for your child. 

So we took a look at 10 of the most popular tutoring franchises based on franchise count and ranking in Entrepreneurs Franchise 500 and broke down the numbers:


2020 Education Franchises : Initial Investment

Filling in the lower end of the investment chart is Club Z which, unique to the other concepts in our chart, does not require real estate and the costs associated (rent, leasehold improvements, etc). We cover this in our Franchise Basics Guide to franchise costs. With an investment range of just $33,900 to $52,850, the majority of the Club Z investment is the Franchise Fee, which is inline with their model that does not have real estate requirements and educates students at their homes. The remaining concepts typically require real estate. Kumon comes in with the lowest overall investment for a concept with real estate due to an aggressively low franchise fee of just $1,000! Huntington Learning Center has the highest initial investment of the other concepts, this can be attributed to their real estate buildout which at $35,124 - $129,314 is dramatically more expensive than other concepts listed.

Initial Investment Overview

Average Investment Range

$79,377 - $149,538

Highest Investment Range*

$127,060 - $292,940

Lowest Investment Range**

$33,900 - $52,850

*Huntington Learning Centers

**Club Z 


2020 Education Franchises : Franchise Fees


The highest and lowest franchise fees are separated by more than $48,000! Kumon charges only a $1,000 fee while Mathnasium and Tutor Doctor charge a fee just shy of $50,000. To better understand these fees, you’ll want to read our Franchise Basics article that covers franchise fees, but in short, you’ll want to make sure you’re getting value out of your franchise fee. Just because a fee is significantly less expensive than another does not necessarily make it a better investment. 

Franchise Fee Overview

Average Franchise Fee

$28,595

Median Franchise Fee

$30,000

Highest Franchise Fee*

$49,700

Lowest Franchise Fee **

$1,000

*Tutor Doctor

**Kumon

Note: The Royalty data below is broken down into two categories as some franchises charge a percentage of gross sales and others charge a per student (or per subject) fee. Excluded from both average royalty categories was The Tutoring Center which charges a flat fee of $1,000 per month. 


2020 Education Franchises : Royalties

Royalties on Revenue
Average Royalty (%)

10.25%

Highest Royalty (%)*

16%

Lowest Royalty (%)**

6-8%

*Sylvan Learning Centers

**Club Z


Royalties Per Student
Average Royalty

$32 per student/subject

Highest Royalty*

$34-$38 per student

Lowest Royalty**

$23-$33 per subject

*Kumon

**JEI

The majority of franchises charge a simple percentage of your gross sales (revenue), but as you can see, some tutoring franchises charge flat fees per student enrolled at your center. The highest percentage royalty is Sylvan Learning Centers coming in at 16%. In order to understand how that compares with the highest royalty per student, you’d need to understand the typical fee that is charged to students. Kumon’s highest royalty fee is $38 per student. If a franchisee charges $380 per student, then this is only 10%, but a quick Google search will tell you that Kumon typically charges between $80 and $100 per student per subject. Even at the highest price point, that’s about 38%. That steep royalty may be one of the reasons the Kumon franchise fee is only $1,000. Read up on royalties in our Franchise Basics article.

2020 Education Franchises : Franchised Units


Average # of U.S. Franchises

433

Median # of U.S. Franchises

314

Largest U.S. Franchise System*

1,537 Franchises

Smallest U.S. Franchise System**

28 Franchises

While GradePower was the smallest franchise system on our list, there are most likely smaller systems out there that we did not include. However, we do know that the two largest tutoring franchise systems are Kumon (more than 1,500 U.S. franchises) and Mathnasium (just under 1,000 U.S. franchises). How’d they get so big? Kumon started early, beginning their franchise program in 1958! Mathnasium only started franchising in 2003 but was one of the first tutoring franchises to offer only one subject, math. 


It begs the question: Is it better to have a lot of good widgets to sell? Or just one widget that is the absolute best?

The size of a system can be a confidence booster for prospective franchisees because they know that many others have already bought in. But don’t sleep on a franchise just because it hasn’t boomed. There are some serious advantages to getting in early to a franchise that hasn’t experienced massive growth just yet. We detail those advantages here and here


2020 Education Franchises : Training Hours


Average Training Hours Provided

106 hours

Median Training Hours Provided

84 hours

Most Training Hours Provided*

217 hours

Least Training Hours Provided**

28 hours

*Huntington Learning Centers

**Club Z

Training hours can be quantified but not qualified. After all, I think we’d all rather have one day of intense, valuable training than a full week of mediocre training. Since we haven’t been to each of (or any of) these franchises’ trainings for new franchisees, the only analysis we can really provide is that Kumon and Huntington Learning Centers provide more than 200 hours, while Tutor Doctor and Club Z provide less than 50 each. 


So, that’s a quick snapshot of the tutoring franchise category. As always, you’ll want to better understand why the franchise fees and royalties are what they are. Lower fees and royalties do not necessarily equal better opportunities.  To fully understand each franchise opportunity, you’ll want to follow our guidelines for researching franchises. Good luck!


The 10 Tutoring Franchises Included in this Analysis: Mathnasium Learning Centers, Kumon, Huntington Learning Centers, Sylvan Learning Centers, Tutor Doctor, Eye Level, JEI, Club Z, GradePower, and The Tutoring Center. 


*Disclaimer: The data published was aggregated from each brand’s page as seen on the Entrepreneur 500 Franchise list. The accuracy of this data is reliant on the accuracy of the Entrepreneur.com information collected. If you are interested in buying one of the brand’s mentioned in this post, you should verify all fees and data provided above directly with the franchisor during the course of your due diligence.