FDD Talk Daily (Children’s Franchises): TeachPro Proformas for Annual Income, Expenses, and Profit Based Upon the Oklahoma City Economy

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 TeachPro’s Item 19 Financial Performance Representations (2012 FDD)

• TeachPro, an Oklahoma corporation, offers and promotes franchises in a network of in-home and in-school tutoring classes. Franchisees tutor reading and math for students in pre-kindergarten through grade 12. The program includes Algebra I and II.

• You must first purchase an in-home franchise before being able to obtain the right to offer TeachPro’s in-school programs. As an in-school program franchisee, you are free to offer in-school programs at any school location that does not interfere with the franchise rights of other TeachPro franchisees. If you are an in-home franchisee, you may operate only at the location(s) approved in the Franchise Agreement.

• The Initial Franchise Fee for an in-home franchise is $5,000 to $12,500 if you are an educator with a current, non-provisional teaching certification issued by any state. The Initial Franchise Fee if you do not have such a certification is $7,500 to $15,000. The Initial Franchise Fee for an in-school program franchise is $500 per school district.

• You are expected to purchase a Curriculum Package in addition to your Initial Franchise Fee. The current cost of the Curriculum Package is $1,250 plus freight (approximately $400) for grades Pre-K to 12 which is required for all in-home tutoring franchises and covers elementary, middle school, and high school settings. These prices may change without notice.

• Depending upon whether you are a certified teacher, the total investment necessary to begin operation of a TeachPro in-home franchise is $12,850 to $48,400. The total investment necessary to begin operation of a TeachPro in-school franchise is $500 to $9,650. This is only an estimate. This includes the Initial Franchise Fee that must be paid to the franchisor.

Material Assumptions for Tables

• The following proforma tables reflect the anticipated performance of TeachPro franchises based upon the experience of the company’s affiliate and its owners and officers in the Oklahoma City, Oklahoma market. Since the company does not yet have any franchisees, there are not any franchisee or prospective franchisee characteristics or factors that differ materially from the data the tables are based upon.

TeachPro Franchisee Proforma Assumptions for Oklahoma City, OK

• 90 minutes is the length of all student tutoring sessions.
• 45 sessions is the average number of sessions per student.
• 90 minutes is the time allotted per initial test and parent signup.
• Tutors are treated as employees so their pay is fully burdened.
• 48 weeks is the maximum tutoring time per year for a TeachPro franchise.

• This series of proformas are for the Oklahoma City, Oklahoma metropolitan area. Each one shows a franchise at a different level of sales activity and various possible stages of development. Each is based upon the Oklahoma City economy with the assumption that Oklahoma City is one of the lowest cost markets in the United States. You should make adjustments to meet the economic conditions, population, and economic demographics of your franchise territory and market area.