FDD Talk Daily (Children’s Franchises): Average Annual Sales of Franchised and Corporate-Owned Huntington Learning Centers

This special FDD Talk series will highlight the financial performance representations of over 20 Children’s franchises, with a cross-analysis of the featured franchises to be published at the end of the series.

Highlights of Huntington Learning Center’s Item 19 Financial Performance Representations (2012 FDD)

• You will provide tutoring principally to school-aged children at your Huntington Learning Center. These services consist of tutoring in reading, phonics, study skills, mathematics, and related areas; and 1-on-1 instruction to prepare for state and standardized entrance examinations, principally the SAT and ACT; and 1-on-1 instruction in junior high school, high school, and college math and science subjects.

• The total investment necessary to begin operation of a single Huntington Learning Center franchise is between $113,850 and $246,850 for a Standard Franchise and $192,950 and $437,750 for an Expanded Franchise. This includes between $14,650 and $34,050 for the Standard Franchise and between $50,650 and $91,900 for the Expanded Franchise that must be paid to the franchisor or its affiliate.

Average Annual Sales of Franchised and Corporate-Owned Huntington Learning Centers in 2011

• Many factors influence the revenue at a Huntington Learning Center, including the way the manager operates the business, the number of inquiries, conversion of these inquiries to enrolled students, program duration, and tuition rates, as well as other factors outside the business, like foot and car traffic, road structure, and demographic factors, including the number of school-age children located near the Center.

• Operation of the Center may be affected by factors like the curriculum used in the schools attended by students in the area, and the length of the school day and the length of the school year.

• The presence of direct and indirect competitors, including other Huntington Learning Centers, may affect your revenue.

• Factors that determine expenses at a Center include debt service; the number of teachers and other staff hired, and the length of their employment; the amount of compensation you pay yourself, as well as your staff; and the benefits offered. Other factors include premises rent and marketing expenditures.

• Many franchisees spend substantially more on marketing than required under the Franchise Agreement. In addition, your Advertising Cooperative Association can require money for cooperative advertising.

• The franchisor compiled the data for franchised Centers from the monthly income statements that franchisees submit, which they prepare according to a standardized method described in the Operations Manual. The franchisor has not audited nor in any other manner substantiated the truthfulness, accuracy, and completeness of any information supplied.

• The franchisor compiled the data for corporate-owned Centers according to a standardized method described in the Operations Manual.

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