Envisioning the reach and growth of the supplementary education sector has ignited the thrust to provide more professional courses between the leading players. Let us find out why this sector is always on the boom
Overview of the market
Envisioning the reach and growth of the supplementary education sector has ignited the thrust to provide more professional courses between the leading players. Tutoring, the largest segment in parallel education is expected to grow at a CAGR of 15% from $11 billion in 2014 to $16 billion in 2017, while test preparation will grow from $2 billion to $4 billion at a CAGR of 25% during the same period. Both tutoring and test preparation segments demonstrate students' willingness to pay for quality education.
Why the route to franchise?
Franchising enables quick and fast expansion for a brand, leading to better business volumes and revenues. It is the only option to invest in a risk free model, as the competition to provide result driven education is the USP for most of the institutes and drives them to do better to survive in the industry.
Himanshu Jain, Sen. V.P, Career Launcher: “Franchising helps to explore social connects and reputation of the franchisee in the respective city, thereby creating a sense of trust and confidence in the customer (students in our case). The local partner will have better access to schools and colleges than someone from the corporate office.”
What Franchisors Seek?
Suyog Penkar, C.F.O, Vidyalankar: “We have created a name for ourselves and have transformed into an entity for providing extraordinary results. Keeping the targets in mind, we desire that the franchisee should be from an educational business background, so that he/she can use their network to increase the business.”
Himanshu Jain: “We partner with an individual not only because of the investment that the franchisee brings, but more importantly for the intellectual and ethical value that he would bring to the organisation’s eco-system, which is much more valuable than any monetary investment.”
Majorly, all of the leading institutes have a standardized design which is altered as per the size and location of the institute. The basic and the foremost requirement is a location which should be well connected with all of the modes of transportation.
Himanshu Jain: “Anything varying between 1300 to 2000 sq ft of carpet area is required to open a Career Launcher institute.
Suyog Penkar: “The carpet area required for a single classroom is 670 sq ft and for two classrooms it is 1000 sq ft.”
Himanshu Jain: “It will vary between Rs 3 – 20 lakhs depending upon various factors such as the centre location, student capacity, duration and the types of courses to be offered by the centre.
Suyog Penkar:”The investment needed to open a vidyalankar institute differs between 15- 20 lakhs depending upon the location selected.”
Breaking Even for the Franchisees
The timeframe for a franchisee to achieve the breakeven for a supplemental education provider is totally dependable upon the duration of the course and the number of students enrolled.
Suyog Penkar:” Vidyalankar’s most of the courses are for two years and one can expect the return on investment in more than a year.”
Why the Big Players
Capturing a business in India is moreover capturing the psyche of a consumer and surviving in this industry for such a long time, brands like Career Launcher and Vidyalankar has an in depth knowledge about stability, scalability and growth of the business.
Suyog Penkar:”At vidyalankar, we do not just sell the brand name but we pass on the trust that every partner has gained through joining hands with us, and we are proud to say that over 50,000 students avail to our services every year.”
Holding Hands with Franchisees
Himanshu Jain: “We conduct regular training programmes at zero cost to the franchisee. There are structured formal and non-structured informal training programmes. We have a full-fledged high caliber and experienced franchise support team who works shoulder to shoulder on all various aspects like site selection, lease agreement, infrastructure, design of outlet, marketing, staff hiring and training, curriculum design and teaching etc.”
Suyog Penkar:”We not only provide requisite marketing support through tools like brochures, leaflets, posters, flex audio visual aids etc, but has also formed a core support core which caters to all of the issues regarding academics, faculty management, test and performances, parental counselling.
Following the Foot steps
Brands ventured into franchising have distinguished support programmes fairly incorporated in the fundamentals of the organization. It is very necessary for the franchisee to understand the philosophy of any brand before investing in it.
Himanshu Jain:”We look for young and energetic professionals with a passion for entrepreneurship and education. If a franchisee do not love education, then he/she will hate being with us. If the franchisee is not bubbling with entrepreneurial energy and restlessness, this is not the place to be in.”
Choosing the Right Franchisor
Investing in the supplementary education industry can be a very tricky task, but if evaluated the key paradigms, the process can surely provide you a profitable outcome. Evaluate the number of students enrolled per month, visit the existing institutes, discuss about the support programmes provided by the franchisors, compare the franchisee units to evaluate the ‘ROI’ and other elements, etc.
Additionally there are a few pointers that one should keep in mind before taking up on a franchise:
The Expansion Message
Suyog Penkar: “We are expanding in Western India and the nearby regions. We are planning to open 100 more centers in the next 5 years to reach the students of Tier II & III cities in India.”
Himanshu Jain:” We are open to appoint franchisees in any city for the products / programs which are not being currently offered in that city. However, we aim to open at least 30 franchisee based institutes by the end of 2016, since we have enough of company owned institutes and have covered the major location we are planning to have only franchisees.