(Ambrosio’s note: I woke up to discover a very interesting comment left for my post on Kumon Learning Centers. The letter from Nicole Smith, president of the International Association of Kumon Franchisees, deserves as much exposure as I can give it, so with her permission, I’ve decided to publish the entire letter in a separate blog post. Nicole and I have exchanged a few emails and I look forward to presenting more exclusive, insider information on Kumon with her help. Thank you, Nicole!)
I am the president of the International Association of Kumon Franchisees, which is the only association for Kumon franchisees in Canada and the US. This is one of the best overviews of Kumon that I have seen from an “outsider,” very objective and fair, and accurate in nearly every respect. Thank you for writing it.
I have a few comments.
1. You’re right about the good fit being essential. One aspect of Kumon that franchisees need to know before starting is that it is completely hands-on. The franchise agreement requires that the owner be on site for all class sessions (except for the inevitable occasions when he or she cannot attend, for reasons of illness or business travel for professional development, e.g.).
2. The franchise fee is $2,000. Also, few Kumon centers of a viable size require only 2 to 3 staff. I have run a successful center for years and sold it at the end of last year due to relocation, and at the same time opened a new Kumon center. I have about 50 subject-students (some students study both math and reading and thus count as two subject-students) at the time of writing, and have 4 staff coming in one day and 3 staff the other day. Average center size in North America is currently about 160 or 170 so it is much more common for there to be 6 or more staff in a center at a time. Staffing is a significant cost in terms of profitability, one of the primary ones along with royalties and (especially when in commercial space) rent.
Retail space is required of US franchisees. In Canada, new franchisees must in almost all cases also open in commercial spaces, though existing franchisees are grandfathered in, so still nearly half of Canadian centers operate in non-commercial spaces.
3. Social Media – when Kumon hired Mullen almost two years ago to assist them with marketing, Mullen began developing the Kumon website and started working on its online presence including the Facebook page, with a fan base currently of over 27,ooo, its Twitter feed followed by over 1,000, and active ongoing engagement with hundreds of mom bloggers. I met with a Mullen representative last week by teleconference and was impressed with how well-developed their strategy is.
4. Other technological innovations – Kumon North America has made significant strides in developing computer management systems for its franchisees. The current program, CMS Standard, permits franchisees and their staff to plan and record students’ work online, network with multiple computers and generate a number of reports facilitating communication of progress with parents, among other functionalities. Beta-testing of scan-in software is currently being done to assess feasibility for further center management tech support. There are other IT projects in process that are at earlier phases, but in summary, Kumon in North America has come a long way in this regard.
5. Final thoughts on profitability – this is one significant area for potential franchisees of Kumon to take a hard look at. There are franchisees who are making very good incomes at Kumon — many of these have student enrollments significantly above the average, i.e. 300 or more subject-students, and/or charge tuitions significantly above the “suggested tuition.” For start-ups — location, location, location. Some areas permit for rapid growth to 100 subject-students within the first year and 200 or more in the second or third year. Other areas, though, will require a lot of work to develop, and you need to come in with enough liquid cash to see you through until you are profitable, and have a very well-defined business plan.
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