Is the KUMON Franchise a Great Business to Own?

Kumon franchise owners operate an after-school center that provides math and reading programs using the Kumon Method of learning.   Is the Kumon franchise a great business to own?  What should those considering this investment know about Kumon and its franchise opportunity?  See what others are saying and share your opinions below.

KUMON(UnhappyFranchisee.Com)  Kumon franchise marketing claims that Kumon is the world’s leading afterschool learning program, with more than 25,000 global units.

According to the 2015 Kumon Franchise Disclosure Document (FDD), “The total investment necessary to begin operation of a Kumon Center franchise ranges from $64,073 to $134,100. This includes the $1,000 franchise fee” that you must pay to Kumon.

A recent Kumon press release states:

In an ever-growing market of after-school learning programs, Kumon continues to lead the industry. As the world’s largest education franchisor, Kumon recently joined a select group of franchises highlighted as the 2015 “Best of the Best” in their industry categories by Entrepreneur Magazine…

This is the 17th year Kumon has ranked number one in its category on the “Best of the Best” list, which includes holding this standing for 14 consecutive years.

Is a Kumon franchise a great business to own?  Are Kumon franchisees successful… and happy?  What are the potential pros and cons of owning a Kumon franchise?

We invite those familiar with the Kumon franchise program (franchisees, instructors, franchise or corporate employees, parents, educators) to share their opinions – positive and negative – with a comment below.

Anonymous comments are welcome; however, please use a valid email address (won’t be publicly visible).

Kumon Franchise Advantages – Opinions Invited

What benefits can those investing in a Kumon  franchise expect?

Low Start-up Cost is one advantage, according to the company’s promotional material:

Potential franchise owners will find that Kumon has the lowest start-up franchise and materials fee in the supplemental learning industry — along with a number of financial incentives for franchisees. These include a grand opening marketing subsidy, assistance with leasehold improvements, and purchase of learning center furniture and exterior primary signage — a total of $19,000 in financial support related to startup costs.

A History of Success is an advantage claimed by Larry Lambert, VP of franchise recruitment at Kumon North America, who was quoted in a recent press release:

With a franchising history spanning more than 55 years, Kumon has provided thousands of entrepreneurs with the opportunity to truly impact their communities through education.

A Growing Market Kumon claims is another:

“the education franchise industry continues to grow with annual revenues reportedly at $40 billion, those with an entrepreneurial spirit and interest in helping children succeed are discovering a lucrative business as Kumon franchise owners. The private tutoring service market is projected to reach $196.3 billion by 2020, according to a recent comprehensive report by Global Industry Analysts, Inc.  Kumon franchisees have the benefit of improving their local communities while making a sound business decision.”

What are some other benefits of owning a Kumon franchise? Share a comment below.

Kumon Franchise Disadvantages – Why the High Franchise Turnover?

Item 20 of the 2015 Kumon Franchise Disclosure Document (FDD) reveals a potential red flag regarding the Kumon franchise opportunity.

In the years 2012, 2013 and 2014, there were a total of 375 franchise agreements.  More than 1 in 5 Kumon of those franchise agreements were either terminated, or ended in closure or transfer to a new franchise owner.

Kumon Franchise Turnover Locations

2012

Locations

2013

Locations

2014

Total

Agreements

Closed or

Transferred

Turnover

Rate

1481 1466 1452 1827 375 20.52%
Centers Terminated 222
Non-renewals 46
Ceased Operations – other reasons 13
Transferred to new owners* 94

* In some cases, a transfer could mean a franchise was sold at a profit, but it often means that an owner exited the system at a loss.

Why are some franchisees being terminated, closing or leaving the system?

What are some of the challenges of the Kumon franchisees are grappling with?

What is causing a relatively high percentage of Kumon franchisees to exit the system before completing the term of their franchise agreement?

Tutoring Franchises Average a High 25.52% Turnover Rate

Unfortunately, it appears that the entire tutoring services and supplemental education segment of the franchise industry is suffering from high franchisee turnover.

The ten largest franchises in this segment average 25.52% turnover with several (Tutor Doctor, Sylvan, & Club Z) exceeding 30%

Tutoring Franchise Turnover Rates*

Franchise
Turnover Rate 2012-2015 Franchise Turnover Rate 2012-2015
Kumon 20.52% Eye Level 22.6%
Sylvan 31.17% Tutor Doctor 31.8%
Club Z
30.71% LearningRx 26.95%
Mathnasium 17% JEI Learning
20.23%
Huntington 28.9% The Tutoring Center 25.33%

Are tutoring franchises – in general – not thriving in today’s marketplace?

Should prospective franchisees stay away from education franchises in general?

Share your opinion below.

Data Sources for Kumon and other tutoring franchises are the 2015 Franchise Disclosure Documents, or FDDS, of the respective companies.

ALSO READ:

TUTORING FRANCHISE Posts (Coming soon)

TUTORING FRANCHISE GUIDE (Coming soon)

FRANCHISE DISCUSSIONS by Company

 

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TAGS: Kumon, Kumon franchise, Kumon franchise opportunity, Kumon franchise complaints, Tutoring franchise, Tutoring franchise opportunity, Tutoring franchise complaints, Education franchise, Education franchise opportunity, Education franchise complaints, unhappy franchisee

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