In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the Best in Class Education Center franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Best in Class Education Center franchise, based on Item 7 of the company’s 2017 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Best in Class Education Center franchise, based on Items 5 and 6 of the company’s 2017 FDD

• Section IV – Presentation and analysis of Best in Class Education Center’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:

• 2016 average, highest, and lowest total revenues for the 14 franchised Best in Class Education Centers that (i) have been in operation for a period of at least 2 years as of January 1, 2017 (i.e., opened by January 1, 2015); (ii) have operated for the entire 2015 and 2016 calendar years; and (iii) were not a “satellite location”

• 2016 average, highest, and lowest total revenues for the 6 affiliate-owned Best in Class Education Centers that (i) have been in operation for a period of at least 2 years as of January 1, 2017 (i.e., opened by January 1, 2015); and (ii) have operated for the entire 2015 and 2016 calendar years (4 of these outlets are satellite locations)

Section I – Background Information

13 Things You Need to Know About the Best in Class Education Center Franchise

Opens 50th Location

1.  In early September 2017, Best in Class Education Center celebrated a milestone with the opening of its 50th location. At the time, the company had already opened six new centers so far in 2017 in the states of Michigan, Florida, Ohio, and California. The 50th Best in Class Education Center was opened in Mill Creek, Washington, which is the company’s home state.

2.  Hao Lam, founder and CEO of Best in Class Education Center, said, “My wife Lisa and I opened our first Best in Class center in 1995 in the heart of Seattle, and since then, the business has grown rapidly through franchise partners who have the same passion for education that we do. We have worked extremely hard and feel like this is a true accomplishment to hit this special milestone. We’ve helped hundreds of students around the country so far and look forward to supporting even more students in Seattle’s neighboring town of Mill Creek.”

3.  Lam added that the company had plans to finalize 10 more franchise agreements by the end of 2017.

4.  To continue the company’s record growth, Best in Class has made it easier for passionate educators and licensed childcare professionals to start a franchise through its teacher incentive program. Through the program, current and former educators have their initial franchise fees reduced by $3,000 for each of the first three centers opened, and the royalty fees for the first three months a center is open are waived.

5.  Lam added, “As we continue growing beyond 50 units, we look forward to also continuing to impact the lives of more families throughout the country. With the backing of our committed multi-unit owners, a strong infrastructure, and the brightest corporate team in place, 2017 is sure to be the best year yet for Best in Class.”

Plans to Open Seven New Centers in First Quarter of 2018

6.  At the beginning of 2018, Hao Lam, CEO and founder of Best in Class Education Center, talked about the company’s successful year in 2017 and its future plans for 2018. The brand closed out 2017 with deals for 12 new locations – seven new franchisees joined the company and five existing franchisees have decided to grow their portfolios with an additional territory. Lam said, “Our franchisees continue to grow with Best in Class because they enjoy what they do, their business is growing, and they believe in the future of the brand.”

7.  Another factor motivating the brand’s franchisees to grow is the flexibility of the franchise model, including the satellite program, which allows franchisees to expand without signing another lease. Best in Class Education Center tested the satellite program for four years before rolling it out to franchisees. Last year, two existing franchisees decided to implement the satellite program.

8.  The brand will open seven new locations in Q1 of 2018 in Texas, California, New Jersey, and Florida and projects that Best in Class Education Center will open a total of 15 new centers by the end of 2018.

Continues Midwest Expansion With First Location in Michigan

9.  2017 was a record year for Best in Class Education Center. The brand expanded into several new markets including the Midwest with its first location in Michigan. In June, Best in Class opened a new center in Farmington, Michigan, which is owned and operated by Srinivas Challagundla. He had heard about Best in Class from friends in Seattle and Texas and decided to pursue his dream of owning his own supplemental education business.

10.  Sharon Peterson, director of franchise sales at Best in Class Education Center, said, “There’s a real need for our one-of-a-kind, customizable education services in the Midwest and across the country, and Challagundla is exactly what we were looking for in a partner.”

Company History

11.  Best in Class Education Center was founded in 1995 by Hao and Lisa Lam in Seattle, Washington. The Lams came to Canada in the late 1980s after fleeing Vietnam’s communist government. Hao worked hard to put himself through school at the University of British Columbia. He often tutored classmates and knew that educating others was his passion.

12.  Since the first center opened in 1995, Best in Class has been growing steadily. The Lams began franchising the concept in 2011 and today, there are over 50 locations across the United States. Best in Class is currently looking for franchisees in the U.S., Canada, and Central America.

Entrepreneur’s Franchise 500

13.  Best in Class Education Center has appeared twice on Entrepreneur’s annual Franchise 500 list since the brand began franchising in 2011. It ranked at No. 248 in 2018 and No. 453 in 2017.

Section II – Estimated Costs

• Please click here for detailed estimates of Best in Class Education Center franchise costs, based on Item 7 of the company’s 2017 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Best in Class Education Center’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis

• The following presents certain financial performance information for the 2016 calendar year for each Best in Class Education Center that met certain qualifying criteria (referred to as a “Qualifying Center”).

• In order to be a Qualifying Center, the Best in Class Education Center must: (i) have been in operation for a period of at least 2 years as of January 1, 2017 (i.e., opened by January 1, 2015); (ii) have operated for the entire 2015 and 2016 calendar years; and (iii) not be a “satellite location.” (Ambrosio’s note: In another section of Best in Class Education Center’s Item 19, the franchisor states that 4 of the 6 affiliate-owned Qualifying Centers are satellite locations.)

• “Satellite locations” are materially different from traditional Best in Class Education Centers. For example, satellite locations are rented on an hourly basis (including from community centers, Boys and Girls Club, and in one instance, a Swerve Driving School) and do not have the signage, furniture, or equipment utilized at a traditional Best in Class Education Center.

• Qualifying Centers include Best in Class Education Centers operated by Hao Lam, the franchisor’s Manager and Chairman, as well as Best in Class Education Centers operated by third-party franchisees.

• On January 1, 2017, there were: (i) 33 Best in Class Education Centers operated by third-party  franchisees, and 14 of these centers are Qualifying Centers; and (ii) 11 Best in Class Education Centers operated by Hao Lam, and 6 of these centers are Qualifying Centers (4 of these outlets are satellite locations).

• The financial performance representations below include data from all Qualifying Centers.

Part 1 – Affiliate-Owned Qualifying Centers

• The financial information presented below is for the 2016 calendar year for Qualifying Centers operated by Hao Lam.

Highest Total Revenues