This post was updated on October 25, 2017 to reflect information from Sylvan Learning Center’s 2017 FDD (Item 7).
Detailed Estimates of Sylvan Learning Franchise Costs Based on Item 7 (Estimated Initial Investment) of Sylvan Learning’s 2017 Franchise Disclosure Document
1. Initial License Fee: $24,000
2. Travel and Living Expenses While Attending Training: $900 to $1,500
- The estimate for travel, food, and lodging for initial Sylvan training assumes one person with a travel cost of between $200 and $800 round-trip to and from Sylvan’s facilities in Hunt Valley, Maryland, $150 per day for lodging, and $25 per day for meals for 4 days during initial training.
- For each additional person to attend training, you would need to allow an additional $900 to $1,500 for expenses.
3. Initial Three Months’ Rent and Security Deposit: $3,750 to $15,000
- If you do not own adequate space, you must buy or lease space for your Center. Strip malls are the typical locations for Centers.
- Your Center must be a minimum of 1,000 square feet. Sylvan anticipates that, under the business model in the License Agreement, it will approve Center sizes of 1,000 to 2,000 square feet. Center size across the current Sylvan Network varies, with most Centers having between about 1,500 and 2,400 square feet.
- The amount of rent that you pay will vary greatly depending on your geographic location, the type of location in which your Center is located, the size of your Center, and general economic conditions, among other factors.
4. Real Estate Improvements and Site Preparation: $2,000 to $38,000
- The costs of improving your lease site for your Center are negotiated with the landlord as part of your negotiating your lease. If the landlord provides the improvements at its cost and those costs are financed as part of the lease, you will substantially reduce your initial costs, but your monthly rentals will likely be higher.
5. Initial Inventory of Sylvan Learning Materials: $2,800
- This amount may change from time to time throughout the year.
- The amounts do not include all shipping costs and taxes, which must be paid by you. Depending on your location and applicable state taxes, your shipping costs should be between approximately $200 and $500, and your taxes will vary.
- At the end of your first year of operations, you will be required to purchase additional Learning Materials for an additional cost.
6. Initial Instructional Materials From Third Parties: $150 to $200
- Sylvan will specify the initial instructional materials you obtain from third parties. You may source these from any third party, so long as the materials meet Sylvan’s specifications.
7. Specialized Furnishings: $5,300 to $10,000
- You must purchase certain specialized furnishings for your Center that meet Sylvan’s specifications. You may purchase these from any vendor that can produce furnishings that meet Sylvan’s specifications.
- You are responsible for shipping costs and the set-up and installation of the specialized furnishings.
8. Other Furniture and Miscellaneous Supplies: $3,000 to $4,000
9. Signage: $4,000 to $8,000
10. Marketing During Initial 3-Month Period When the Primary Center First Opens in Your Territory: $10,000
- Across the 3-month period beginning in the month before the Primary Center first opens for business in your Territory, you are required to spend a total of at least $10,000 on advertising and marketing approved by Sylvan to promote your Primary Center.
11. Computers, Workstations, Initial Supply of 10 Apple iPad Air or iPad Air 2 Tablet Computers, Copier, Printers, Facsimile, Telephone, Internet Access, and Software: $6,690 to $11,420
- The estimated costs indicated include the costs for three to five computer workstations with operating software at $600 to $1,000 each, 10 Apple iPad Air or iPad Air 2 tablet computers at $399 to $499 each, $50 to $500 for 10 covers/screen protector kits for the iPads, $700 total for a printer and copier (combined or separate), and one month of internet and telephony services at $150 to $230 per month.
- Sylvan provides certain of the equipment at no additional cost to you.
- Computers and other equipment may often be leased over several years. Equipment leases typically require you to pay approximately 10% of the “purchase” price at the outset. To the extent that you are able to lease your equipment, you will substantially reduce your initial costs.
12. FOA Annual Membership Fee for Initial Period: $660 if you are licensed to operate one Center
- All new franchisees must join the Sylvan Franchise Owners Association (“FOA”). The FOA is an independent franchisee organization that is administered by the Sylvan Franchise Owners Association, Inc.
13. Estimated Fee or Rent for Temporary Satellite: $250 to $3,000
- Sylvan does not recommend that you purchase dedicated space for Satellites. You may wish to lease space on a short-term or temporary basis.
14. Miscellaneous Supplies (Markers, Buckets, Pens, Pencils, Paper, Instructor Name Tags, Incentive Gifts for Motivational Program, etc.): $15 to $25 per class
- This amount is per 6-8 student sessions. Your expenses for miscellaneous supplies may differ depending on the number of students you enroll.
15. Portable SylvanSync Kit (for Transporting to Satellites) and Signage: $115 to $430
- This estimate assumes $75-$85 for one or two roller suitcases or other containers to transport materials to Satellite locations, and $45-$350 for portable signage for one Satellite location.
16. Additional Funds – Three Months: $7,350 to $30,850
- These expenses include business licenses, utility deposits, payroll costs, and required insurance. These figures do not include payroll for the owner.
- These figures are estimates and Sylvan cannot guarantee that you will not have additional expenses starting the business.
- Sylvan recommends that in addition to the capital you estimate you will need to reach a break-even point in your operations, you should have available sufficient capital as a contingency to fund the business for a full year.
17. Total: $70,980 to $159,885 (figures do not include additional rent)