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Apr, 02 2015

Pre-plan your profits

Running a preschool effectively plus lucratively is no child's play. But, with leading preschool chains offering opportunity galore, the investors' 'FUTURE' lives in preschool business.

With growing competition and demand, now every parent wants to admit their child in the best possible preschool. This trend has surely given a boost to the preschool industry. The preschool industry is expected to grow at a CAGR of 30 per cent for the next two years. Let's peep into the reality of the preschool industry, and its growth and challenges in terms of franchising.

As per experts, India has around 30,000+ preschools and without a doubt, the preschool business is thriving in India. Penetration rate is expected to rise at a tremendous rate during the forthcoming years, due to the rapid growth of preschools in tier II and III cities in the country. Kidzee started in 2004 and now has a network of around 1500 centres spread across 550 cities. Within almost a decade of its existence, Kidzee has nurtured more than 4 lakh children throughout India. Abhinav Upadhyay, Head  Marketing and Innovation, Zee learn Limited says: “Indian Education Sector is projected to show a 15 per cent YoY growth, from Rs. 3,41,180 crore (FY12) to Rs. 6,02,410 crore (FY15) (US$ 97.03 billion). Out of the main segments in the education industry, preschool segment shows the fastest growth. The preschool business is expected to touch Rs 13,300 crore by 2015-16, out of which branded preschools are expected to contribute about Rs 4,500 crore. This growth is a result of the rise in nuclear families and increase in disposable incomes that have led to greater demand for quality preschools even in small towns and non-metros. However, the preschool industry is still in its nascent stage in India with only 2.7 per cent penetration against the 163 million children in the age group of 0-6 years. There has been a strong growth of preschools in India over the last decade but only less than 20 per cent of Indian preschool market belongs to the organised sector.”

Bangalore based Little Elly preschool started franchising in 2007 and now plans to expand into tier II cities of Karnataka, Tamil Nadu, Andhra Pradesh and Maharashtra.  Franchising since 2003, EuroKids started with two preschools and today, it has a strong network of 900+ franchisees spread across 319 towns and cities in India. Amit Singh, Strategic  Business Unit Head, Euro-Kids says: “Technology in education is one of the biggest upcoming trends in preschools in India. We view technology to be an effective tool to aid the process of learning, and should be used in a controlled manner in preschools. Also, awareness and initiatives for ensuring a secure environment in all preschools should be one of the top priorities.”

Upadhyay of Zee Learn further says: “Players in the organised segment make the conscious effort to introduce various methods for the child to be engaged in multiple activities and expose them to a variety of platforms in a way that makes both the child and the parent happy. With the centre up and running, the operational issues begin to kick in, not just hiring but also the proper training for teachers, maids, security guard and mainly the centre head / counselor. For those who want to successfully run a preschool or enter the education segment to experiment - the franchise model in preschool provides the perfect launch pad.”

Another brand, Bachpan a play school started franchising in the year 2004 when there were already many established players in the market. Bangalore based brand, Hello Kids started franchising in 2009 and currently has 325+ centres pan-India. Its Directors Pritam Kumar Agrawal and Sunita Jain are proud of their no royalty fee model. SHEMROCK started franchising in 1991 and now has over 330 preschools with 95+ K-12 SHEMFORD schools. SHEMROCK plans to expand to a mix of cities pan-India.  Amol Arora, Vice Chairman and MD, SHEMROCK and SHEMFORD group of schools says: “Earlier the perception was that everyone can open a preschool and that made easy inflow of many non serious players which surely upset the industry. Strong government regulations are required here as the industry now needs only prominent and serious players the parents and investors can trust completely.” Kangaroo Kids most franchises are parent led and the biggest measure of success are the mothers of children who attend the school and return as franchisees.


Preschool industry is growing by leaps and bounds but surely there are certain challenges franchisors have to face. Most franchisors agree to the fact that top three challenges for the preschool industry are non-availability of trained teachers, high real estate cost and vague government rules and regulations. Singh of EuroKids comments: “There is a lack of regulatory mechanism for this segment. This augments the mushrooming of a lot of unorganised players. The vastness of the country limits reach. We are addressing this issue with robust operations and academic training team across the country to ensure sufficient support for smooth operations of all EuroKids preschools.” Another challenge is spreading awareness amongst parents for the need of preschool education especially in tier III towns. A combined strategy of local communication and events along with extensive marketing communication is greatly helping EuroKids tackle this issue. Lack of good quality teachers is another big test for the sector. Most preschool brands leave no stones unturned to train their teachers to maintain the optimum standards required.  At Kidzee, the Kindergarten (K.G.) curriculum ensures smooth transition to formal schooling with meaningful and progressive learning experiences. Pallavi Rao Chaturvedi, Founder of Brainy Bear Pre-School & Activity Club and Director of AISECT comments: “We have been noticing that getting admission in nursery schools is getting tougher and competitive day by day. Therefore, receiving formal education during the formative years before admission to kindergarten schools becomes necessary to stimulate the child's mental development process and enhance the learning capabilities.” On the same lines, Ajay Gupta, Director- Operations, Bachpan a play school opines: “Lack of awareness on preschool education is the major challenge. A major part of the population acknowledges the significance of education however still most of the people mostly in rural areas are not aware on preschool/ early childhood education.”


Lina Ashar, Founder, Kangaroo Kids Education Ltd comments: “Real estate cost and professionally trained educators are a challenge but to tackle it, we have a three month long training course including periodic refreshers.”

Vittal Bhandary, Director, Little Elly says: Preschool education in India has gained immense importance over the past years due to increased awareness and affordability among parents. Further, increasing competition in education is prompting parents to plan their children's future from early childhood. Many preschools today lack availability of trained teachers. At Little Elly we provide career opportunities to people who are ready to impart knowledge and educate the new generation through our Initial Teachers Training (ITT) Program.” Agreeing to the same Arora of SHEMROCK adds: “We make sure that the teachers have the same values like our brand. We conduct five day training for them in Delhi and also conduct regular online training sessions because every class, every teacher and every need is different.”


Powered by AISECT, Brainy Bear Preschool and Activity Club helps children in districts and smaller towns in getting the right preschool education. This special and affordable preschool chain is following two formats  an urban centric model where the centre would be technology driven with a lot of focus on English language content and a less technology driven model for district level places where the centres would offer the same quality of learning techniques as the urban centric model but with an increased use of Hindi language content.  The brand has two flagship centres in Bhopal, one franchise centre in Sonipat and one recently inaugurated in Gurdaspur.



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