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Feb, 02 2017

K12: Riding on a high growth

The K12 segment in India offers the largest and most attractive opportunity for investors in the coming years

The K-12 segment is valued at $52 billion with a market share of 52 percent, as per a report by manage­ment consulting firm Technopak. With more than 1.4 million schools and 260+ mil­lion students enrolled, the current K-12 school system in India is one of the largest in the world.

To cash in on the growing opportunity in the segment, many renowned preschool chains have diversi­fied into K-12 educa­tion and offer a lucrative franchise opportunity in this category.

However, the challenge is getting associated with the right kind of people, who want to make a difference to this country through education, believe industry experts.

Echoing similar views, SK Rathor, Founder & MD, Sanfort Group of Schools, says, “In franchise model, the success or failure of a brand depends upon the franchisee because he or she is the per­son who is carrying out the business in the assigned terri­tory.”

Amol Arora, Vice Chairman and Managing Director, Shemrock & Shem­ford Group of Schools, adds, “Creating and managing a K-12 school chain requires a lot of know-how of the education in­dustry which is limited to only a few players of the industry. It is a complex project.”

So, the key to becoming a part of this lucrative sector and overcoming the challenges it pose is aligning with the right brand.

Opportunity in tier II, III cities

The penetration of high-quality schools is still low in tier II and III cities, however, the demand for growth in these cities is expo­nential. The capital re­quired starting a K-12 school in tier II or a tier III city is very low as compared to that required in metros. Even the operational expenses are also very low so, the break-even will also come fast.

“This industry needs slightly different ap­proach, one need to have passion, dedica­tion and patience to wait for profits. As a franchisor, we need to evalu­ate the potential of a person before signing the agreement,” Rathor concludes. 

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