KIDDIE ACADEMY Franchisees Under Fire

(UnhappyFranchisee.com) Sexual Assault.  Infant Neglect. Dangerously Unsanitary Conditions.  You name it, Kiddie Academy franchise owners are under fire for it.

(Also read: KIDDIE ACADEMY Franchise Complaints)

Franchisee-of-the-year charged with sexual assault of a child

In 2008, Louis Himber was recognized as a Kiddie Academy Franchisee of the Year. Now he’s been charged with sexual assault on a child over a six year period.

In 2008, the Derry News story read:  “The owners of Kiddie Academy of Windham… was honored by the premier child care providing company with the Franchisee of the Year award for exceeding Kiddie Academy standards and maintaining awareness of best practices in the early education and child care industry.   The ownership group for Kiddie Academy of Windham consists of Kevin Himber, Lou Himber and Karen Flaherty Himber, Dan and Beverly Kennedy and Dale and Carole Tipple.”

The Windham Kiddy Academy is back in the news.  The August 13, 2011 edition of the Eagle Tribune reads:

Louis Himber, 44, formerly of Londonderry and a co-owner of Kiddie Academy daycare center in Windham, was recently indicted on seven charges by a Rockingham Superior Court grand jury.

The child, who is now 13, was sexually assaulted in Londonderry on multiple occasions between March 2004 and March 2011, according to the indictments. Himber faces five counts of aggravated felonious sexual assault, a felony punishable by 10 to 30 years in prison for each count.

Himber also was indicted on a simple assault charge for punching the child in the arm, a misdemeanor, and a second-degree assault charge for trying to strangle the victim’s mother, the indictments said. Those alleged incidents occurred this year.

Himber’s attorney, Mark Howard, and Kiddie Academy spokeswoman Wendy Odell Magus both maintain that franchisee Himber is solely an "investor" in the business and never worked there. They claim no children at the center were ever in danger.  However, a court order specifically bars Himber from going to the daycare.

This tragedy is one more blow to the reputation of the Kiddy Academy daycare franchise chain. 

5 month old infant dies under care of Kiddie Academy Staten Island

According to a CBS story, on March 25, 2011 5 month-old Jeremy Davlias was dropped off at the Staten Island Kiddie Academy.  The workers there called 911 when they noticed Jeremy was having trouble breathing, but it was too late.  Little Jeremy was dead by the time he reached the hospital.

CBS states that the parents blame Kiddie Academy:

The Davlias said they believe Jeremy would not have died if the facility had done its job.

“I think Jeremy would’ve still been here with us, absolutely,” Oscar said. “There is no question in my mind that he still would’ve been here with us.”

So do the Davlias’ attorney:

“Some of the things that went on here are simply beyond comprehension,” the family’s attorney, Marc Albert, said. “How did nobody take a look at this kid for three hours and ten minutes, especially when they knew he was sick?”

Parents claim the unsanitary conditions at the South Hills, WV Kiddy Academy caused their child to contract mycoplasma.

In January, 2011,  The South Hills, WV Kiddie Academy was shut down for unsanitary conditions.  Parents Kristina Russell and Christopher Aldrich filed a lawsuit claiming Kiddie Academy,  claiming their infant has suffered from mycoplasma, an organism contracted by fecal matter coming into contact with the mouth.

According to the lawsuit, Russell and Aldrich’s child was two years old when he began attending Kiddie Academy in March 2010. The lawsuit claims that Kiddie Academy’s "unsafe and unsanitary conditions," include mold growth in the ceiling, on walls and around the kitchen sink; rodent droppings in multiple locations that included kitchen cabinets and utensil drawers, gnats in the kitchen, food rinsed in a kitchen sink that was not washed nor sanitized; staff members washing their hands after diaper changes in sinks where baby bottles were washed; no hand washing sinks near the diaper changing tables; dirty, stagnant water in the mop bucket and dirty diapers stored in open containers.”

The lawsuit claims that, as a result of these conditions, Russell and Aldrich’s child suffered "serious and permanent neurological injuries, including temporary blindness with a severe visual deficit."  The family is seeking the $500,000 in medical expenses they’ve incurred, as well as punitive damages, attorney fees and interest.

ARE YOU FAMILIAR WITH KIDDIE ACADEMY?  WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Email Unhappy Franchisee at UnhappyFranchisee[at]gmail.com.

KIDDIE ACADEMY Franchise Complaints

(UnhappyFranchisee.com)  Kiddie Academy is a Maryland-based daycare franchise founded in 1981 by George and Pauline Miller.  Kiddie Academy provides its franchisees with curriculum and helps them obtain all the licenses and permits necessary to build and operate their franchise daycare business.

According to Entrepreneur, Kiddie Academy rose 103 franchise and 4 company-owned centers in 2010, but then fell to 90 franchise locations and 2 company-owned centers in 2011. A recent company press release states that “Kiddie Academy Domestic Franchising… has over 95 academies located in 24 states, including two company-owned locations. Approximately 70 additional academies are in development, with 15 to 20 new locations slated to open each year.”

Kiddie Academy Boasts of its Extreme Franchise Support

According to the Kiddie Academy website, “Kiddie Academy^® has achieved market leadership by working closely with each of our franchisees to promote the progress and growth of each academy. We make sure that our franchisees have the tools and guidance they need to run their businesses efficiently, so that they can have time for the other priorities in their lives, as well.”

In a personal message on its franchise website, Kiddie Academy President and CEO Michael Miller states that Kiddie Academy was founded on the philosophy that the franchisor will support each franchise location as if it were their own.

Franchise Lawsuits and a Franchise Warning

Despite the upbeat growth projections, Kiddie Academy has suffered a unit decline of greater than 11%, from 107 locations to 95 locations, in the past year.  In recent years, there have been multiple lawsuits involving Kiddie Academy and its franchisees. 

Additionally, a strongly worded warning to stay away from the Kiddie Academy franchise recently appeared on Rip-Off Report:

Kiddie Academy Kiddie Academy Franchising Rip off, beware of giving them any MONEY!!! Don’t fulfill their promises!!! Go with any other child care franchise!! Abingdon , Maryland

Joerg — St. Louis Missouri United States of America

Submitted: Tuesday, August 09, 2011

Beware of giving these guys your hard earned money.

They don’t fulfill promises or even contracts.

Read the fine print.

Distrust these guys.

Go with any other child care franchise if you want to really make an investment.

Go with any other child care franchise if you don’t want to lose your money.

Beware of the CEO, Beware of the sales men.

Ask to meet EVERYBODY that will be interacting with you (from start to end) and you’ll really see what they are all about.

A rebuttal post followed:

Ask Our Franchisees

AUTHOR: Kiddie Academy Domestic Franchising – Abingdon (United States of America)

SUBMITTED: Friday, August 12, 2011

POSTED: Friday, August 12, 2011

It is unfortunate that you had a dissatisfying experience. I welcome you to contact me directly so we can try and resolve your concerns. With a 30 year track record of helping build successful child care facilities across the country, we are proud of the integrity of our company, the quality of our people and value of our business opportunity.

Consistently heralded by our franchisees for our commitment to their success, Kiddie Academy has demonstrated our willingness to work with franchisees in achieving their desire for business ownership. Hear directly from our franchisees by visiting www.kiddieacademyfranchising.com. Our franchisees’ feedback speaks for itself and for the Kiddie Academy business.

So, we ask our readers, franchisees, employees and those familiar with the Kiddie Academy franchise:

Is the Kiddie Academy Franchise a Scam and rip-off to be avoided at all costs?

OR

Is the Kiddie Academy a growing franchise organization with a franchisor dedicated to the success of each location?

ARE YOU FAMILIAR WITH KIDDIE ACADEMY?  SHARE A COMMENT BELOW.

Email Unhappy Franchisee at UnhappyFranchisee[at]gmail.com.

PRIMROSE SCHOOLS: Franchise Owner Charged With Rape

Primrose Schools childcare franchise now has its very own Franchisee from Hell.

According to FOX19 news in Lebanon, Ohio, the Maineville, OH Primrose Schools childcare franchise is being shut down after the owner was charged with the rape of a 13-year-old.

The alleged 13-year-old victim was not a student of Primrose Schools.

According to the news report:

John Foster, 36, was arrested last Wednesday. He was arraigned on Thursday morning and is being held in the Warren County Jail on a $500,000 bond.

Foster is a franchise owner of the Primrose School in Maineville. He and his wife opened the school in 2008. Police say at this point, they have no reported incidents involving Primrose students.

According to court documents, Foster engaged in sexual conduct with a girl under 13 from 1999 until 2003.

Foster has been ordered to stay away from the victim and all children under the age of 18…

According to the President of Primrose, Jo Kirchner, the license of the franchisee has been officially terminated.

Because of the ongoing investigation, Primrose schools felt it was in the best interest of the students and their parents to shut down the school. The students will be able to attend school at one of the three other Primrose locations.

The decision to close the school came after a meeting Thursday night with the parents of the students that attend the school and the owners of the other locations.

Foster and his wife co-own the private daycare and preschool franchise.

The Foster’s Primrose Schools franchise location offered daycare and kindergarten and had announced plans to add one first-grade class this fall.

About Primrose Schools (from the Primrose Schools website): 

“In 2008, Primrose Schools entered into a strategic equity partnership with Roark Capital Group, an Atlanta-based private equity firm. Primrose was their first investment to be made in the educational category. The capital from this partnership will allow Primrose Schools to continue to invest in infrastructure, innovation, and our franchise system to maintain continual improvement for the Primrose brand at all levels and raise consumer recognition across the country.

“In 2010, Primrose Schools unveiled our new Primrose School of Education, where we conduct regular training for school staff members and franchise owners. From our beginnings in a single school to the opening of our downtown Atlanta location in 2010, Primrose Schools has grown to more than 220 schools in 15 states.”

ARE YOU FAMILIAR WITH JOHN FOSTER, PRIMROSE SCHOOLS OR ITS FRANCHISE OWNERS?  SHOULD DAYCARE FRANCHISE OWNERS BE MORE CAREFULLY SCREENED? SHARE A COMMENT BELOW.

Email us at UnhappyFranchisee[at]gmail.com.

KUMON Announces Aggressive Northeast Franchise Push

Kumon franchise owners in the Northeast United States have complained that the company is overselling and oversaturating their markets, creating encroachment issues and hardship for Kumon franchise owners.  

Their concerns and complaints are the subject of several posts on UnhappyFranchisee.com:

KUMON Franchise Owner Complains of Overexpansion

KUMON: “Why I Sold My Kumon Franchise”

KUMON: NJ Franchise Owner Shares Concerns

KUMON: Franchisee Association Pushes for Change

Despite their franchisees’ protestations, Kumon has announced an aggressive franchise sales effort specifically targeting the Northeast.  The full company press release appears below. 

*   *   *   *   *   *   *   *  *   *

Kumon Franchise Expands in Northeast

Boston, Philadelphia, New York — Fast-Growing Markets for Entrepreneurs in Education
Press Release Source: Kumon On Tuesday October 12, 2010, 8:30 am EDT

TEANECK, N.J.–(BUSINESS WIRE)– Kumon, the world’s largest after-school enrichment program, identifies Boston, Philadelphia and New York City as top priority markets and launches aggressive expansion plans to meet the growing demand for supplemental education services in these cities. In the past five years, Kumon student enrollment increased by 39 percent in Boston, 34 percent in New York City and 32 percent in Philadelphia. Kumon offers attractive business incentives to new franchisees in these priority markets.

“We are seeking franchise candidates who have an entrepreneurial drive and the desire to work in the rewarding field of education,” said Joseph Nativo, chief financial officer, Kumon North America. “We offer franchisees business incentives up to $27,500 and quality-of-life flexibility. Our $2,000 franchise and materials fee is the lowest in the industry.”

The tutoring business is growing at a rate of more than five percent a year according to the Education Industry Association, making it a viable business for entrepreneurs seeking personal, professional and financial satisfaction. Since opening the first U.S. Kumon Center in Larchmont, N.Y., in 1974, Kumon is a highly desirable career opportunity for entrepreneurs. New openings of Kumon Centers increased by 80 percent this year and Kumon plans to sign an additional 50 franchise agreements by the end of the year, expanding its current 1,334-franchise community.

“Despite the economic slowdown, parents continue to invest in education and their children’s academic success is their top priority,” said Savio Rebelo, senior vice president, Kumon North America. “These cities have a high number of potential customers with an increased interest in supplemental education services and we have choice openings to fill to meet the demand.”

Supplemental education continues to be the fastest-growing franchise industry, and Entrepreneur magazine’s annual Top 500 ranking of franchises ranked Kumon as the No. 1 franchise in the United States for the ninth consecutive year. The ranking is considered the best and most comprehensive franchise ranking based on objective, quantifiable measures of franchise success.

Individuals seeking a lucrative source of additional income and successful business professionals in search of satisfying second careers working with children can submit applications online at www.kumonfranchise.com to open a center in the greater Boston area, Philadelphia or in one of the five boroughs of New York City: Manhattan, Queens, Brooklyn, the Bronx and Staten Island.

About Kumon Math and Reading Centers:

Kumon [Koo-mon] is an after-school math and reading enrichment program that unlocks the potential of children so they can achieve more on their own. Founded in Japan in 1958, the learning method uses an individualized approach that helps children develop a solid command of math and reading skills. Through daily practice and mastery of materials, students increase confidence, improve concentration and develop better study skills. Kumon has 26,000 centers in 46 countries and more than 4 million students studying worldwide. The company’s North American headquarters is in Teaneck, N.J. Visit www.kumon.com or call 800-ABC-MATH.

*   *   *   *   *   *   *   *  *   *

ARE YOU FAMILIAR WITH THE KUMON TUTORING FRANCHISE?  WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Company responses, clarifications or rebuttals welcome.  Contact the author/site admin at UnhappyFranchisee[at]gmail.com.

KUMON: “Why I Sold My Kumon Franchise”

According to the Kumon tutoring services franchise website, “One of the largest and most established franchise businesses in the world, Kumon has nearly 250,000 students enrolled at more than 1,500 individually owned and operated Math & Reading Centers in U.S. and Canada alone.”

As we reported in the post  KUMON Franchise Owner Complains of Overexpansion, some franchise owners of Kumon North America are increasingly disturbed by what they see as burdensome new regulations,  encroachment and intentional oversaturation by their parent company.

David Joseph, an outspoken owner who has posted his concerns on UnhappyFranchisee.com as well as his own blog, recently decided to sell his franchise and leave the Kumon system.

He explains why below:

LITTLE SUNSHINE’S PLAYHOUSE: Stormclouds, Franchise Lawsuits

Little Sunshine’s Playhouse & Preschool franchise website welcomes visitors with a fairy tale:

“Once upon a time there was a happy place where children played in a kingdom of creative encouragement.  Where Little Sunshine, Riley B and all their friends across the land grew by leaps and bounds in their magical home away from home.”

However, the Little Sunshine’s Playhouse fairy tale franchise has turned into a nightmare for both the fledgling franchisor and its early franchisees.  The franchisor alleges two of her first franchisees refused to pay royalties and renamed their day care centers, but continue to use her trade dress.  She is suing them for trademark infringement.

The franchisees accuse the Little Sunshine’s Playhouse franchisor of not providing agreed services and abandoning them by moving to Hawaii.

Little Sunshine’s Enterprises Inc. complaint against its franchisees

In “Little Sunshine’s franchisees split off” the Missouri’s Springfield Business Journal reports:

Springfield daycare franchisor Little Sunshine’s Enterprises Inc. has filed federal trademark-infringement lawsuits against two former franchisees, and the defendants have responded with counterclaims.

Two suits in U.S. District Court for the Western District of Missouri name Springfield entities Paschke Enterprises LLC and Brodersen Wyrsch LLC as defendants, and seek a combined $200,000 for alleged trademark infringement by the franchisees, which have since dropped the Little Sunshine’s name by court order.

“They initiated a cooperative royalty strike,” said Little Sunshine’s Enterprises owner Rochette Dahler, claiming the franchisees in August stopped paying her company’s 6 percent royalty fee, which amounted to $2,500 to $4,500 per month.

Paschke Enterprises operates Storybook Children’s Academy in south Springfield, and Brodersen Wyrsch operates Pinnacle Children’s Academy in Rogers, Ark.

Rochette Dahler personally operates two Little Sunshine’s Playhouse centers and franchisee Joyce Harrington runs the third location. Dahler founded the concept in 2002 and began selling franchises in 2005.

Franchisees’ complaints against Little Sunshine’s Enterprises Inc. & Rochette Dahler

The counterclaim filed by Paschke Enterprises makes several claims against Dahler:

That “…Dahler was not available to assist with the operation of the facilities, that she moved to Hawaii and was not available to provide support, and that she made false representations regarding Paschke Enterprises’ Cardinal Street location.”

That Dahler “misrepresented the number of children that would be enrolled in both locations as 80, when in fact the maximum licensed capacity was 72.”
That Dahler “misrepresented income generated from certain government programs, including subsidies for low-income families, food reimbursements and grants, which were all unavailable at the Cardinal location.”

That Little Sunshine’s Enterprises “failed to live up to the franchise agreement terms by failing to send an experienced school administrator to the Cardinal location for a week before and two weeks after it opened; failing to assist with grant writing; and failing to make Little Sunshine’s corporate staff accessible.”

According to the Springfield Business Journal article, the counterclaim alleges that the Cardinal location “has never made profit and has experienced substantial losses since beginning operation.”

Ain’t no sunshine when she’s gone…

Franchisee Paschke claims to have invested $435,000 in the once-franchised daycare location and has eight years remaining on a $10,500 monthly lease.  However, her ex-franchisor and bitter courtroom enemy Dahler said she has signed a contract to purchase the land and building occupied by Paschke Enterprise’s day care from the landlord Tillman.

Hell hath no fury like a preschool teacher – or franchisor – scorned.

ARE YOU FAMILIAR WITH THE LITTLE SUNSHINE’S PLAYHOUSE & PRESCHOOL FRANCHISE?  SHARE A COMMENT BELOW!

STEPS Tutoring TCYOnline Franchise Complaint

According to its website, Steps by TCYOnline offers a unique online tutoring opportunity featuring an exclusive territory and a licensing fee of just $2499. 

According to the website, “Students and tutors are logged in at their respective computers and tutoring is done through highly advanced Whiteboard technology. Both can text- chat and talk and listen to each other naturally through VOIP (Voice Over Internet Protocol).”

Sounds like a great idea.  However, commenter Alex ( District of Columbia), posting on RipoffReport, states investing in TCY is just a great way to lose money:

TCYonline aka TCY aka STEPS math tutoring. Offering 24/7 online math tutoring in the U.S. You buy a territory of 100,000 households and you do all the marketing. Expect negative cash flow.

Last Fall (2009) they asked franchisees to pay $5000 each into a "national marketing pool". Luckily no one did. Turns out TCY had no plan on how to spend the money and had not done any test marketing or pilot studies to show RIO. After their failure to convinece franchisees to send them $5000, TCY canceled the campaign. They were not going to spend one cent of their money. They like playing with yours. TCY promised to do a pilot study of online marketing (basically google ad words) and show franchisees the results so they could decide whether to participate in the marketing pool. TCY did not do that. 

TCY promised to share leads from the campaign (which never happened) from unassigned territories with their affiliates to help them out since they expected affiliates to pay for 100% of the cost. But then TCY changed their minds about sharing leads and then canceled the campaign when affiliates got disgusted with their attempted $5000 money grab.

Investing in TCY is a great way to lose money.

Basically, TCY gives ZERO support to franchisees. Not a good investment. If you are interested in tutoring, at the minimum go with a company that has a marketing plan that they can articulate to you, some level of marketing support, and has at least one employee based in the US. TCY has ZERO employees based in the US. They don’t really know what they’re doing in the U.S. market.

Good luck and buyer beware!

ARE YOU FAMILIAR WITH STEPS TUTORING OR TCYONLINE?  WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

KUMON: NJ Franchise Owner Shares Concerns

Kumon educational franchise owner David Joseph originally posted the following as a comment on the post KUMON Franchise Owner Complains of Overexpansion.  We’ve moved it here because of length, the quality of the content and the importance of the franchise issues Mr. Joseph raises.  Please feel free to share your opinions below.

Comments from David Joseph, NJ Kumon Franchise Owner

Hello, My name is David Joseph and I own a minority share in a center located in NJ. I’m putting up this post to make my views plain and clear to everyone. My statements here are mine and mine alone. I’m concerned about Kumon’s strategy. I’m not concerned about issues involving associations, products, services, or contracts. I also don’t care about rants and insults that are now popping up on this page.

I’m concerned about Kumon’s strategy because I’m seeing encroachment and cannibalization. Although I’m not affected by encroachment, I directly and indirectly know people that are, as I believe we all do. For owners that are not directly affected now, you may be affected in a few months or a few years because of Kumon’s strategy and implementation plan.

For those who don’t own a center, think of encroachment and cannibalization as a pay cut or a layoff. I use this analogy because you lose money and, in the worst case, you can lose your job.

Kumon’s strategy is to build brand awareness through expansion. In essence make Kumon a household name because there will, so to speak, be a Kumon on every corner.

When I think of educational companies with great brand awareness, I think of Sylvan. However, I don’t see a Sylvan on every corner. In North America, there are approximately 1100 Sylvan centers. Kumon has approximately 1500 centers in North America. Yet the average person is more familiar with Sylvan than they are with Kumon.

Sylvan’s brand awareness was developed through heavy TV advertisement. TV ads and spots can cost a lot of money. The money used for advertisement directly affects Sylvan’s bottom line because that money comes directly out of the corporate budget. Sylvan corporate took a financial risk because they invested corporate money into advertising. I’m not sure what Sylvan’s return on investment was but I feel safe to say they achieved their brand awareness goal.

Kumon’s brand awareness strategy is based on increasing the number of centers. Speaking strictly from a corporate viewpoint, it is a brilliant strategy in terms of capital and return on investment. The majority of the money needed to expand comes from owners buying new center locations. New centers may end up encroaching on existing centers but from the corporate viewpoint that is OK. Corporate believes that there will be an overall increase in enrollment. Again, strictly from a corporate viewpoint, there is a lot of upside with minimal financial risk. The risk, from a corporate view, is generating vocal owners. These vocal owners will limit Kumon’s ability to attract new franchisees.
In order for Kumon to justify expansion, they must justify that the market can handle more centers. That is why I questioned and will continue to question the assumptions used to justify expansion. For current owners, take the time to understand your local market in terms of the number of potential students, family income of the students attending your center(s), where they live, etc and estimate what your market penetration rate is. Your concerns and challenges will be dismissed by corporate if you do not come with hard facts. You will also be more confident when you raise issues.

From the franchisee view, expansion can be positive or negative. It is positive if you are operating in an unsaturated market. However, it is especially dangerous if you have large center(s) or if your center(s) are in a saturated market(s). There are centers in NJ that have lost 100+ subjects because a new center opened up in close proximity. Although those centers are very large, loosing 100+ subjects is a huge hit on the profitability of those centers. This is why some owners, especially in NJ, are very concerned about Kumon’s expansion strategy. For owners that operate in less saturated markets, please understand that if left unchecked, expansion will turn from a positive to a negative very quickly.

I put posts on twitter that eventually resulted in postings on unhappyfranchisee.com. I did not hide my name so that Kumon corporate can find me. Eventually corporate contacted me and we had a heated discussion. To be honest, I was too heated to articulate the reasons I chose to post on twitter so here goes:

1) I wanted to demonstrate how much attention only 1 owner can generate and therefore the true risk of Kumon’s strategy.
2) I wanted to be a voice for those who are concerned about expansion and could not get their voice heard.
3) I wanted to give potential franchisees information on some unstated/understated risks of owning a Kumon center.
4) I wanted to demonstrate the effectiveness of utilizing a low cost alternative media channels.

On point 4, let me be more specific. I don’t have a lot of followers on twitter, yet I managed to reach a very broad audience. How did I do it? I spent a few hours finding my target audience. In this case it was Kumon franchising personal, certain franchising experts, and a few owners that actually used twitter. I crafted messages that spoke to different segments and the rest is history. My point here is that my upfront time was figuring out my goals, figuring out who I should target, and crafting messages to get the results I wanted. It only took a few hours over a weekend to generate the buzz.

Now think about Kumon’s customers. Imagine if Kumon corporate invested the resources into understanding customers segments and helping franchisees reach those segments. That is why I challenged Kumon to gain a better understanding of their customers and develop customer segments. I sincerely believe it is a better investment to gain an in-depth understanding of customers and reach people that will truly value Kumon’s offer rather than simply saturating a market.

In addition, the cost to build brand awareness has dropped dramatically. It is not necessary to spend a lot of money on traditional media to reach a targeted audience. Kumon is a word of mouth business and right now word of mouth can be multiplied 1000 fold by utilizing social media. I’m not saying that every Kumon owner needs to get on twitter. I believe it is actually more effective for Kumon corporate to invest their resources into developing a social media plan. Kumon corporate already knows there is something to it because a lot of Kumon’s franchising team already utilizes twitter to attract potential franchisees.

Take aways:

Kumon owners – Don’t just talk about how you lost business to a new center because corporate does not see that as big picture issue. Think in terms of corporate goals, strategies and assumptions used to justify corporate goals and strategies. There are a lot of assumptions that can be challenged. Do your homework and your challenges will carry more weight. If you decide to use public online outlets, do not get yourself dragged into taunts and fights. It’s a waste of your time. Utilize public forums to draw attention to your concerns about Kumon’s expansion strategy. Its not just about you, it’s about everyone that owns a Kumon center.

Kumon Corporate – The expansion strategy has a lot of financial upside but it is very risky if continue to alienate owners. More and more owners will utilize public forums to express their opinions about expansion. NJ is only one market. Imagine if owners in other markets start doing the same thing. Imagine the affect on franchisee recruitment.

The cost of building brand awareness is a lot lower now than just a few years ago due to alternative media channels. If the goal is to build brand awareness, social medial is an effective low cost tool to reach target customers and build brand awareness.

Potential franchisees – If you found this post, you have received insight that most of the current owners did not have at the time they purchased a franchise. It is an interesting time at Kumon. There is a lot of potential but there is also a lot of risk depending on how Kumon moves forward with their strategy. There are some good posts that can help you make a more informed decision. Work with your franchising people but also seek out information from current owners. Ask current owners the benefits and downsides of owning a franchise. Ask their opinion about Kumon’s strategy. I’m sure there are enough owners out there that will give you their honest opinion. Also, if expansion is limited, you can feel safer about your investment.

Final Thoughts: I’m very passionate about business and Kumon. I believe Kumon offers a good service but my opinion is that Kumon’s expansion strategy will escalate franchise franchisee conflict. Escalated conflict will limit both franchisor and franchisee in reaching their goals.

If you’d like to talk to me directly, please find me on twitter. I’m happy to address any questions or concerns.

Sincerely,
David Joseph

WHAT DO YOU THINK? SHARE A COMMENT BELOW. LOGO: Kumon

KUMON: Franchisee Association Pushes for Change

Burger King owners aren’t the only franchisees pushing for change.

Kumon franchise owners have voiced concerns here (as well as on Facebook and Twitter) that the international education franchisor is prioritizing systemwide expansion over the success of its franchise owners.  While the group was not responsible for the initial comments, the President of the International Association of Kumon Franchisees has acknowledged that these comments have resulted from “very challenging and high-stress” internal tensions within the Kumon franchise community.

In an earlier post about the Kumon franchise complaints, Concerned Owner complained that Kumon’s reliance on incomplete demographic data has led the corporation to “overestimate their market potential” and to create an “unjustified expansion plan.”  Concerned Owner contends that franchise owners, especially in saturated markets such as New York, New Jersey & Connecticut, are being packed in to the point of competing with one another and cannibalizing sales.

Commenter Joe Cack added that while the franchise owners are being forced into discounting to remain competitive, the franchisor is reaping a whopping 30% royalty off top line sales, regardless of franchisee profitability.

Nicole, the president of the International Association of Kumon Franchisees, added this statement to the post:

The concerns expressed here come out of a very challenging and high-stress situation which we as the International Association of Kumon Franchisees are doing our utmost to address.

We are in constant negotiations with the high-level employees of Kumon North America on many topics to do with our franchise, and, while we know it will be a long process to address all the issues, we are encouraged that considerable progress is being made in real consultation on many fronts.

The great strength of franchisees in New Jersey is that they are working together in very constructive ways on things like profitability studies to analyse how to improve their businesses, marketing studies to grow their centres better and other initiatives to address their situation.

They have the highest representation of association membership (over 80%) and have demonstrated in a recent meeting with the CEO of Kumon North America a very admirable professionalism and creativity in moving the Kumon Vision forward.

I am proud to support these franchisees and others throughout North America in their efforts to use their considerable skills and areas of expertise to develop and maintain their Kumon franchises and to have a positive impact on the Kumon North American system as a whole.

Best wishes,

Nicole,
President, International Association of Kumon Franchisees.

Franchise owners organize into independent franchisee associations in order to present their opinions, requests and sometimes demands to their franchisor.  If franchisees don’t feel their concerns are being taken seriously or adequately addressed, they will often take to voicing them on the Internet.  If franchisee concerns are further ignored, the dispute can even result in litigation and a public relations debacle, as seen by the recent Burger King dispute.

It will be interesting to see whether international franchisor Kumon and its U.S. franchisees can work out their differences amicably.

ARE YOU FAMILIAR WITH KUMON?  WHAT DO YOU THINK? SHARE A COMMENT BELOW.

logo:  Kumon

KUMON Franchise Owner Complains of Overexpansion

According to the Kumon franchise website, Kumon is “an after-school math and reading program that employs a unique learning method designed to help each child develop the skills needed to perform to his or her full potential.”

With an international network of independently owned and operated franchises, Kumon claims it the largest and most established program of its kind in the world.  States the website:  “Kumon has nearly 250,000 students enrolled at more than 1,500 individually owned and operated Math & Reading Centers in U.S. and Canada alone.”

One would think that having brand dominance of the supplemental education market would be a benefit for Kumon franchise owners… unless continued expansion results in cannibalization of sales between competing franchisees.  We received an email from “concerned owner” who worries that, among other things, Kumon is overexpanding at the expense of existing owners.

Concerned Owner writes:

Many Kumon franchise owners are concerned about recent expansion of Kumon in seemingly saturated areas.  The corporation is using generic criteria to evaluate potential market areas, namely family income and a specific number of children in K-8.  The generic criteria is not adjusted based on disposable income, cost of living, and who actually contributes to average family income.  The exclusion of important market data has led the corporation to overestimate their market potential and an unjustified expansion plan.

Kumon corporate also does not have a good understanding of their customer.  Kumon offer a good value but they do not know the segment of customer that respond to the value.  Instead, they are trying a shot gun approach to increase brand awareness.  They are trying to sell expansion as an investment in brand awareness but awareness is no substitute to a targeted message to the customer segment that responds to a companies value prop.  Again, this lack of market knowledge and poorly thought out increase in brand awareness leads to over expansion.

In more saturated areas, such as the tri-state NY, NJ, CT area, the corporation is just trying to open up centers in close proximity to some of their largest centers.  The corporation does not seem to care that an owner can lose 20 to 30% of their revenue because the corporation hopes to net an additional 5 to 10% growth between the 2 centers.  Kumon corporate does not put in capital for the center, that responsibility is on the franchisee.  Because the franchisee puts up the capital, Kumon does not share in the risk of the current and new owner.  For the current owner, its a loss because they are losing on their top line.  For the new owner, they will not get an adequate payback on their investment (build out, furniture, advertisement, etc).  Kumon corporate does not care because they can get an extra 5 to 10% without risking anything.

The poor market data, cavalier attitude towards existing/potential franchisee owners, and no risk sharing between franchiser and franchisee leads me to believe that a Kumon franchise may no longer be a wise investment.

Most franchisors have an expansion strategy based on market saturation.  Their goal is to dominate viable markets with the greatest possible presence in order to create strong brand recognition, to squeeze out competitors and to maximize systemwide revenue.  Overexpansion can result in franchise encroachment, perhaps the greatest source of franchise litigation and unhappy franchisees.

What do you think?  Is Kumon Math & Reading franchise doing what it needs to do to create a strong system, or is it overexpanding to the detriment of its franchise owners?

ARE YOU FAMILIAR WITH THE KUMON FRANCHISE?  WHAT DO YOU THINK?  SHARE A COMMENT BELOW.