The pre-school industry in India is growing at a CAGR of 38%
Parents all around the world seek quality education for their children. With the changes happening across the social and economic structure of India, it has intensified the need for early education.
KopalMaheshwari, Founder and Chairperson, Little Einsteins, said, “Parents now understand the need for early childhood education and the importance of these formative years. Earlier most children, especially in India, would be homeschooled but now parents are keen in sending their children to the preschools not just for social interaction but also to ensure that their child gets holistic development in these tender years.”
A preschool franchise business can be a good choice if you have an interest in stimulating young minds, a nurturing spirit and plenty of energy.
“The pre-school is a growing industry with huge demands. In India alone, it has grown at a CAGR of 38% and worldwide we have seen a trend of 18% growth,” commented, Kopal.
Factors Propelling the Growth
The pre-school market has risen to a growth of nearly 36% in India alone. There has been substantial growth of around 18% of private preschools in EU countries even though education is majorly a government sector.
“I strongly feel content and pedagogy is the key factor for preschool growth. Starting a pre-school is not rocket science, and so it’s all about the method of making learning a lifelong journey for the children and providing a nurturing environment with a holistic development in mind. Franchising rather than company-owned centres helps in quick growth but it has to be a workable practical partnership between the franchisor and franchisee,” said, Kopal.
Another factor driving the growth of pre-school franchises is the rising demand from tier II and tier III cities. With growing awareness among parents in tier II and tier III cities, the penetration rate IN the pre-school segment is expected to rise to 25%. The pre-school market in the smaller cities is growing at a whopping 120% per annum, which is much higher than the growth in cities.
There is a huge focus on employability and entrepreneurship skill development, both in India and the international market. The realisation that most of the current jobs will not exist in future and the importance of technology, has also made everyone realise that education should include STEM subjects. Thus, there has been an increase in demand for pre-schools who are a pioneer in introducing coding for preschoolers and ensuring that all the 21st-century skills are incorporated in its curriculum.
Franchising has been the trend of the hour, and pre-school franchises have been gaining tremendous popularity owing to an increase in demand for reputable brands, higher disposable incomes, etc. For a pre-school franchise, you would require a moderate investment with high-profit revenue.
For example, Bubbles, (India’s first pre-school chain based on the Finnish way of learning), works on the FOFO model, i.e. franchise owned franchise operated. It requires a startup investment of INR 14.5-16.5 lakhs for a unit franchise. The anticipated return on investment would range from 99-177%.
Little Einsteins requires a total investment of INR 10 lakhs, with area requirement of minimum 2000 sq. ft. with some outdoor play area. The profit margin is around 50% with a return on investment of up to 44%.