Education Sep, 15 2011

From home tuitions to coaching boom

Coaching institutes today have emerged from being a home based tutorial concept to an organised industry. Franchising has played a significant role in this transformation, thereby making coaching institutes franchising as lucrative business opportunity. E

By Neha Gohil
Feature Writer
From home tuitions to coaching boom

Indian parents today are believed to spend maximum share of their incomes on the education of their children. Considering this increased consciousness among Indians for education lot of segments like play ways or pre-schools, schools, vocational education, new age education concepts like learning dance, dramas, languages, abacus, and so on have evolved in the education industry. Coaching institutes concept is also one these segments and has gained lot of prominence during the past one or two decades.

Factors for growth

Highlighting one of the factors Gautam Puri, Vice Chairman, Career Launcher Educate Ltd says: “Due to the growing gap between what is taught in the schools/colleges and what is asked in entrance examinations, coaching centres have become an integral part for students across the country. As long as this gap remains coaching and training centres will continue to bridge the gap and will be profitable.” Some of the other factors are:

  • Competition: Escalating competition has made coaching centres an inevitable part of an education.
  • Working parents: Both the parents being working can afford to par personal attention to their children.
  • Prepare professionals: These coaching institutes prepare students to excel in entrance exams for professional courses.
  • Personalised training: Coaching classes help students to attain personal attention from the teachers as compared to schools.

Franchising in coaching institutes

Earlier Coaching centres were mainly restrained to unorganised home-based tuitions. However, today as result of increased and high aspirations of the students as well as parents a lot of organised players have taken a lead in the industry. These coaching institutes prepare students for board exams, competitive entrance exams for engineering, medical, MBA, IIT, AIEEE or CAT and what not.

To make themselves available across the nation, most of the organised players have taken franchise route, thus providing a lucrative opportunity to aspiring entrepreneurs from the similar field. An entrepreneur generally starts from a small coaching centre and once that is a success they take franchise route. Franchising is the best way to expand as it is very difficult for an entrepreneur to maintain the sub-branches of his brand across the country independently. Puri shares: “We wanted to rope in and empower as many entrepreneurs as possible and franchise route was an excellent way to do so.”

Education is a localised business. The educator needs to know the area and its customers well to be able to generate maximum results. Also it is difficult to recruit good faculty, which is possible only with the help of local franchisees. Randhir Kumar, CEO, BoardMarks Education shares: “Franchise partners help us to concentrate more on the academic front and the franchisee would take care of the work pertaining to the establishment of the centre at a particular place.”

The significant players who have opted for franchise route for expansion of their brand include:

Career Launcher: Has established itself in the field of test preparation, presently having centres in more than 175 cities of India with more than 225 learning centres. CL has a total number of 110 franchise centres, which the brand continuously aims to scale up. It also has international presence in Dubai and Abu Dhabi offering various education services.

Aakash Institutes: With 23 years of experience in coaching the brand has emerged as a key player in the field. It runs over 45 franchise institutes across India. It has come a long way in grasping the opportunities which exist in education and training. Aakash imparts coaching to medical aspirants across in India.

Bulls Eye: Bulls Eye established in 1996 in Pune has evolved into a premier, nationwide institute and offers coaching for CAT, GRE and GMAT. Presently, the brand has centres in Pune, Chandigarh, Cuttack, Durgapur, Bilaspur, Jammu, Nasik, Ludhiana, Patiala, Yamunanagar, Ambala, Panchkula and Shimla.

TIME: Triumphant Institute of Management Education Pvt. Ltd (TIME) is a test-prep institute established in 1992 having 205 offices located in 108 cities pan India. The institute offers a wide range of programmes for national and state level entrance exams like, CAT, MAT, IIT-JEE and AIEEE and for international exams like GMAT, GRE, ILETS and TOEFL.

Few other key franchise players in the field are Arihant Institutes, Career Makers, Achievers Academy.

Investment required

To become a franchisee of a coaching brand the aspirants needs to have good teaching skills and patience to deal with students. Aspirants must be well qualified for providing quality education. As informed by Puri: “CL believes in building a relationship wherein risks and rewards are shared continuously by the two entities. Despite being the national leader in our field we have a low cost franchise model. The sole reason behind this is that we look for teachers as our franchisees and they cannot afford a costly model. So we have always kept our franchise fees low. For a CL Test Prep franchise, one needs to have around 2,000 sq.ft of space with an initial investment of INR Five lakh approximately.”

Word of caution

It is not necessary that a franchise would fetch fast profits to an investor. Franchisees need to do lot of hard work. A franchisee can not just rely on the teachers in the coaching centres for profitable results. Kumar, comments, “Half-knowledge on any particular subject/issue is disastrous. Our experience shows most of the franchisees are victims of lack of proper knowledge and understanding of this business. Added to this, lack of transparency and faith in the parent organisation add to the woes further. They can overcome the challenge by being transparent and patient in the initial stages with regards to generating revenue. Results are sure to show up once the franchisee establishes himself as a good centre.”

Road ahead

Coaching centres hold bright future for aspirants as people are increasingly becoming career conscious. Moreover with all the support and training being available from the franchisor’s end taking up a franchise of a coaching brand is surly a lucrative opportunity. As says Puri: “The future is very promising especially with the gap between the demand and supply worsening. There is a huge demand supply mismatch in terms of the number of applicants and the number of seats available. Till our education system is able to correct this, coaching and training centres will continue to play a major role.”

Related: Technology driven education providers

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