The Pros and Cons of Buying a Franchise Business in the Education Sector
The education industry is booming. Industry revenues in the United States alone have been estimated at $77.1 billion in 2020.
However, it’s not so simple for entrepreneurs who are looking to become business owners in this space. It’s much more complex than offering guidance in math and reading. Startups in the education industry face many challenges. If you don’t have the best product, you may not succeed.
Starting a business in the education industry can be complicated and time-consuming. However, with the right strategy and hard work, it’s not impossible to start an education-related business in your area.
So, if you have a passion for education, and have the skills for home tutoring professionally, how can you start your own business offering tutoring services and profit from a rapid growth sector that also benefits from great recession proofing?
The education franchise business opportunity
The education franchise business is one of the most exciting opportunities in the industry. The opportunity exists to serve multiple generations in multiple franchise locations:
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There is a huge market of people who are looking for a way to earn more, have a flexible schedule, and work remotely: and all these elements require further education.
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Many retirees, looking to fill their time and tick off their bucket lists, want to learn new skills or even gain the degree they never had the opportunity to take when they were younger.
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Of course, the main sector within the education industry is home tutoring and online tuition for school children and students. Parents want their offspring to progress in the world, and education is a top priority.
Perhaps the most lucrative of these franchise opportunities is the market for tutoring school children.
Pros and cons of starting an education business franchise
Education franchises are a great way to start a business in the sector. However, to evaluate the franchise opportunity, it is important for franchisees to have a good understanding of the advantages and disadvantages of owning an education franchise.
Education franchise pros
Investing in an education franchise can provide a lot of advantages for the business owner and their customer base. These advantages include:
Parents often look for educational and reliable brands when selecting education options for their children. There are a lot of factors to consider for a brand to be successful in the education sector. These include quality, affordability, prestige, location, and availability.
Parents will take advice from their friends and their children’s schools, and this advice is usually to go with a respected brand. Companies like Sylvan Learning, Huntington Learning Center, Tutor Doctor, Tutoring Club, and Celebree Schools are all top franchises in this sector – and they have spent many years building their brand and reputation.
Franchises work because they offer a proven business model to operate under. This saves time for both the founders and the franchisee: you don’t have to worry about trying out new concepts with the risk of failure.
Education franchises are considered one of the most promising business opportunities in today’s economy, operating in a huge market that is growing rapidly. There are plentiful opportunities to combine your passion, business acumen, and franchisor backing to offer your services to parents and others.
Education franchises provide a variety of support and learning resources for both teachers and students. This includes a wide range of resources such as different types of courses, books, online materials for you to share with students, and tools and training programs for teachers.
The franchisor will also help with marketing, and many also provide business training if you are new to the world of franchising.
All education franchise businesses share the same goal. Whether it is an online school, a virtual school, or a brick-and-mortar school, they all have one thing in common: to provide students with a quality education.
The business of education is highly regulated. And regulators love to change their rules regularly. As an independent tutor, this can be a nightmare. As a franchisee, your franchisor should keep you in the loop, make sure you have the right permissions, and help with all the paperwork needed.
Education franchise cons
Buying a franchise can be a great investment if it suits your needs and goals. However, buying an education franchise is not the best option for everyone. There are downsides that you should be aware of. The main disadvantages to buying an education franchise are:
As a franchisee, you must operate to the franchisor’s guidelines. You’ll need to use their materials, their teaching routines, and their marketing. You must always use their brand name, and any products that you sell must be the franchisor’s products.
For most franchisees, these restrictions don’t cause problems. After all, you have bought the franchise because of the brand and its success in the education market. Why wouldn’t you follow the tried and tested processes that the brand has developed over many years?
But if you are more creative and crave total autonomy over what you do and how you do it, then the lack of flexibility could be problematic for you.
Franchisors are increasingly wary of franchisees who don’t follow the franchisor’s guidelines, and this can lead to the termination of the franchise agreement.
Franchise fees are required to be paid by franchisees. Royalty fees are usually a percentage of the revenue that the company generates from its products and services. In addition, your initial investment will include the initial fee to buy the franchise.
Some franchises are still cheaper than others, but if you want to avoid costly fees, it is important to do your research before signing on with a company. See our article, ‘Common franchise fees you need to know’ for more information.
The United States has some of the strictest employment and training regulations in the world – especially when operating a business whose end users are children. The ways that franchised schools must adhere to these regulations are often overlooked by entrepreneurs who would rather focus on running their businesses.
However, although franchisees must adhere to these regulations, they still have a lot of flexibility when it comes to staffing and training students. But they must ensure that they operate within the law, in a similar way to how they must operate within the franchisor’s working practices.
Is an education business franchise for you?
Education businesses provide opportunities for entrepreneurs and professionals who want to invest in a profitable business that aligns with their passion. Investment in an education franchise can be a sound business decision. There are many advantages to be gained, but you must mitigate the disadvantages.
It is always important to understand what you’re getting into before deciding whether a franchise is right for you or not.
If you’re considering becoming an education franchisee, take our franchise assessment to find out if you have what it takes.