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Apr, 03 2016

A READY CHECKLIST FOR A K12 EDUPRENEUR

WITH rage of urbanisation sprawling across the length and breadth of the country, private schools have long crossed over the city limits and penetrated into tier 3-4 cities and are betting high on the franchise route.

Why should you take up a franchise?

Franchise is a clear differentiator between branded school and a mom-n-pop school. This gives the brand a synergy for scaling up, whilst expertise of investors at local levels enable swift yet steady expansion.

Abhinav Upadyay, Head, Marketting and Innovation, Zee Learn Ltd: “It boosts the process of knowledge and resource sharing where our best curriculum join hands with local expert visionaries, thus making it the most effective and relevant model for education.

What franchisors look for?

Franchisees should be able to be one with the ethos and philosophy of the brand to be able to deliver the brand experience.

Meenal Arora, Founder Director SHEMFORD Futuristic Schools: “You have to have patience, dedication, intention to serve and financial stability to sustain the business.”

Sreevats Jaipuria, Vice President, Seth M.R. Jaipuria Schools: “The investor must recognize that K-12 is not an asset-light model and perhaps little more regulated. There is greater responsibility.”

Investment criteria

Meenal Arora: “In a tier two city, the total cost of setting up a K12 format is approximately Rs.5 crore which can be deployed at various phases up to five years.”

Abhinav Upadyay: “Apart from the land requirement of 2-3 acres of land at a suitable location, the initial investment involves the construction cost of min 90,000 sq ft over three phases.”

Breakeven - It all depends on how you deploy your investment

Aggressive players can start the school with 7th standard which involves high investment. However, a school can also start with 2nd grade for investors who want to achieve stability within the first two years.

Meenal Arora,: “You should be able to breakeven faster with 150 kids till grade 2nd while with 300 kids till grade seven, you might take longer. However, having till class 12 will accelerate the admission but such schools may not breakeven before five years.”

Maximize on the Location

City investors can do with small land however as you move inward you should have more land and invest in facilities and infrastructure to counter the disadvantage of the distance.

Quality Assured

The franchisor keeps a close eye on the school activity. Brands have a ready checklist for the school design, teachers, laboratory et al.

Meenal Arora: “We have software which facilitates sharing of the entire curriculum among the parents and teachers. This cost effective audit process enables us to see who is accessing it. School audits and parents feedback are a regular feature. We anticipate what may go wrong as well as put processes to check and ensure that things do not go wrong.”

Traits that make you falter

Right assessment of a prospective investor is crucial. Other factors include bad choice of location and non-competitive fee structure. A very strong financial backup is an absolute necessity. You should evaluate factors such as admissions and drop outs. Low admission rates can be attributed to wrong choice of location or fee structure. However, drop outs are clear indicative of low teachers' quality or the administrative dysfunction.

Before signing up

Compare between different brands. Evaluate what all the fee to the franchisor entail, cost involved in buying the books, conducting staff training et al. Ask the existing franchisee that after what you know about the brand now, if you go back in time, would you have signed up with them.

Moving Ahead

Meenal Arora: “In the last 12-13 years, there has been no allotment of school land in Delhi. Nor can you convert an agricultural land. The city infrastructure is scaling up to provide better connectivity to the existing popular school. The Chennai government has implemented fee control. There should be more players in this segment. Private money and expertise is required for this sector to come up.”

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