After charting a double-digit growth in the last few years, franchising in early education is bustling with opportunities, turning out to be a viable choice for edupreneurs to get started with.
THE last decade has witnessed a noticeable shift from neighbourhood day care centres and pre-schools run by housewives to branded players such as Roots to Wings, Shemrock, EuroKids, Kangaroo Kids, Edify Schools, Kidzee, Time Kids, I Play I Learn and Brainworks. These branded players have been experimental in bringing about a revolution in the early education industry.
Business potential
According to a Technopak report, the pre-school industry in India is likely to grow more than 25 per cent by 2012. The main drivers behind this growth are increasing disposable incomes, growing number of pre-schools opting for franchising to scale up operations and growing consciousness about the importance of early child education. The pre-school education, starting from the age group of 1½ - 4 years, is considered vital for stimulating a child's overall development. This ongoing trend has attained popularity, not only among the elites but also among the middle class income groups.
Although the idea of pre-school education is relatively new in India, the trend is fast catching up and seeing a robust proliferation of branded pre-school chains across untapped locations.
Franchising
Reaching on its own across the country is not a child's play for any investor, it requires a CAPEX push to set off expansion in motion. Factors such as low cost, high RoI, break even within two years of operations, conversion franchise (wherein neighbourhood pre-schools join hands with franchisors), lack of government regulations for new entrants and rising number of parents with transferable jobs has led to increased level of pre-school franchising.
Success can be achieved only if the franchisor selects the right manpower and takes subsequent steps towards retaining the franchisee and their faculty. Amol Arora, Managing Director, Shemrock & Shemford Group of Schools, clarifies, “For faculty members, we look for requisite mandatory degrees, care for children and spoken English skills. Yes, a number of pre-schools and schools have been converted to Shemrock and Shemford, respectively. They have to invest in the infrastructure to bring it to our standards. Plus, we look at the teachers and make changes, if required.”
Amit Singh, National Business Manager of EuroKids International Ltd, adds, “EuroKids expects from its prospective partner to have a keen interest in education services, a love for working with young kids and reasonable financial resources.” EuroKids also extends its franchise to the existing branded/non-branded pre-schools, subject to their adherence to the policies and procedures of EuroKids International Ltd.
As this market is highly competitive, it's important to put strategies in place to attract the target audience. In case of EuroKids, the company follows three-pronged marketing strategy - national, city-based and locational. “We tap print, electronic and digital media at the national level. At city level, we focus on print and outdoor media and at the local level, we predominantly conduct Below-the-Line (BTL) activities,” adds Singh. As per expert's take on the market of pre-schools, they believe that quality franchising with the right business model is the key to dominance over the fragmented industry.
Expansion
After grappling with high rents in metros and low returns, organised players are now quickly disseminating their brand's name to smaller cities. EuroKids is present in more than 280 cities and towns and cities in India. Singh informs, “We are targetting tier I and II cities in India.” Adds Arora, “We are looking at pan-India expansion besides SAARC and gulf countries, where there is good demand for Indian schools.”
Flip side
Running a pre-school/play school is not everyone's cup of tea. The major barriers that this recession proof industry deals with are high propensity in view of shortage of quality teachers and lease rents that eat away the productivity of the business. The franchisees fail in maintaining quality at their centres and that is the biggest threat/risk that the industry faces today. As per Singh, “The challenges that a franchisee faces are to have the right manpower in place to begin with, building the right infrastructure, choosing the right time to launch the project, the right communication that he should send to the audience of his locality and lastly, the relationship that she/he builds with the parents. Unless that happens, 'reference' would not be sufficiently built and if reference is not sufficiently built, the flow of students would always require the investment of marketing.” In case of Shemrock, Arora explains, “Our innovative school system is backed by more than 20 years of research and all this know-how is transferred to the franchisee through trainings, manuals and documents to ensure that parents' expectations are met.”
All these challenges can be easily tackled if franchisors provide requisite business support to the franchisees.
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