NURTURING THE NEXT GENERATION

Many of us consider primary education as the most important part of education that a child should get. However, it is the preschool that plays a vital role in a child’s life. Preschool education not only prepares a kid for school but for his or her entire life. Preschools inculcate basic life skills in a global educational environment that help in nurturing a love of learning which eventually goes a long way and contributes towards a child’s scholastic success. And, most importantly, they learn to socialize with other children, share and contribute.

India is witnessing a boom in the preschool industry. It is projected to grow at a CAGR of 23% during 2017 to 2022. The current market size of preschool or early childhood education industry is estimated to be Rs 14,000 crore and is expected to reach Rs 16,000 crore by the year 2020.More than 70% of the preschool market is still unorganised and comprises neighbouring non-branded preschools. Only 30% of the market is organised and dominated by the branded preschools. “With growing awareness there is a huge shift from an unorganised sector to an organised branded preschool industry,” opines Mukul Tyagi, the founder of ICON Nurturing Innocence.

In fact, there is a huge demand and supply gap when it comes to quality preschool. As such, the industry offers a big opportunity to invest. “We see a huge scope for ourselves. At ICON Nurturing Innocence, we have added 35+ branches in our very first year of franchise operation. We plan to reach 150+ branches by the year 2020,” Tyagi reveals. Preschool franchise is always profitable for a franchisee as well as the franchisor. It is a win-win situation for both the parties. “The word franchise itself means the replication of a successful model wherein a franchisee doesn’t need to invest time and money on research and development, technical knowhow, curriculum and system development, etc. At ICON, we provide complete support to our franchises through a 360-degree support system,” elaborates Tyagi.

Brand USPs

The major strengths of ICON include a unique curriculum, 14 years’ experience in preschool, education partners with vast experience and a team of young entrepreneurs. Talking about the competition in the industry, Tyagi says, “We have signed more than 30 franchises in a span of less than one year and have our own standards which have put us ahead of any other player in the market.” Currently, ICON is focusing on Delhi and NCR. The preschool is present in eight or nine states. Now ICON has started to explore outside India as well. “We are in talks with people from almost every part of the country. Right now, our discussions are going on with Bangladesh, Nepal, Ghana and Britain. As mentioned earlier, we have planned to reach 150+ branches by the year 2020 with international expansion as well,” states Tyagi.

INTERVIEW

Supporting the Franchisees

In this interview, Mukul Tyagi, the founder of ICON Nurturing Innocence, replies to questions about how a franchisee stands to benefit from partnering with the company

What will the franchisee territory be and how will it be protected?

We value our relationship with our business partners and so we give them proper space to do the business. The territory normally varies 2-3 km of driving distance from one brand to the others. It also depends on density of the location or city.

What are the royalty and marketing fees?

These charges vary from one location to another and depend on the economic status of the city or the locality. In general, the package ranges from Rs 1.5-5.0 lakhs for a unit franchisee and Rs 15-30 lakhs for a master franchisee. Outside India, a unit franchisee will be charged between Rs 5-15 lakhs. There is no marketing fee as such in our case; we only charge a franchisee fee and then royalty. The royalty is charged at 15% on collection under certain heads.

What are the margins in this business?

In the preschool business the expenses are almost static in most of the cases after breakeven is achieved. The margin may go up to 50-60% which usually grows at a certain extent year-on-year.

What support do you offer beyond the initial training?

First of all, there is no limitation on the training aspect. Whenever any franchisee needs training on some particular topic or subject he or she will get it after consultation with the coordinator along with their franchisees. We monitor the performance and progress of the branch on a daily basis through ERP and also through our in-house designed mechanism. We interact with the franchisees immediately and support them until the situation is back to normal or routine. We have a much organised setup for franchisee operations and the person responsible for that particular branch submits reports on a regular basis. In the worst case scenario where the franchisee is not progressing in terms of number of admissions, etc., we take over the operations with the mutual consent of the franchisee and hand it back once it reaches normality.

Franchising Facts