Sylvan Learning: $427K Average Sales vs. $100K-$226K Franchise Cost

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

Section I – Estimated initial investment (franchise costs) for a Sylvan Learning franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Sylvan Learning franchise, based on Items 5 and 6 of the company’s 2024 FDD

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Section III – Number of franchised and company-owned Sylvan Learning outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Sylvan Learning franchise opportunity

Section V – Presentation and analysis of Sylvan Learning’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

2023 average, median, high, and low gross revenue, by quartile, for the 307 Sylvan Learning licensed territories that operated continuously during the 24 calendar months of 2022 and 2023 under the same or similar form of joint Sylvan and SylvanSync License Agreement which is referenced by and included in the 2024 Disclosure Document

Section VI – Key ratios, comparables, computations, and analyses for the Sylvan Learning franchise opportunity (exclusive content for Platinum subscribers)

Section I – Sylvan Learning Franchise Costs

Sylvan Learning franchise costs, based on Item 7 of the company’s 2024 FDD:

Initial License Fee: $36,900
Travel and Living Expenses While Attending Initial Training: $1,400 to $2,400
Initial Three Months’ Rent and Security Deposit: $4,000 to $15,500
Real Estate Improvements and Site Preparation: $15,000 to $75,000
Initial Inventory and Instructional Materials: $2,750 to $3,050
Specialized Furnishings: $6,000 to $15,000
Other Furniture and Miscellaneous Supplies: $3,400 to $4,500
Signage: $2,000 to $8,000
Marketing During Initial 3-Month Period When the Primary Center First Opens: $10,000
Computers and Other Hardware, Telephone, Internet Access, and Software: $7,500 to $13,930
FOA Annual Membership Fee for Initial Period: $330
Miscellaneous Supplies: $15 to $150
Hub Technology Platform: $342
Contact Center Participation: $1,480 to $2,930
QuickBooks or Equivalent Accounting Software: $135 to $600
Optional: Sylvan Edge: $0 to $3,210
Additional Funds – Three Months: $9,500 to $35,000
Total Estimated Sylvan Learning Franchise Costs: $100,752 to $226,842

Section II – Sylvan Learning’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

Sylvan Learning’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2024 FDD:

Initial License Fee: $36,900
Royalty: 16% of monthly gross revenues, with a total Minimum Annual Royalty of not less than $32,000
Territory Advertising Minimum for Local Advertising and Co-op Expenditures: 8% of monthly gross revenues, capped at a maximum of $40,000 per territory per calendar year

Section III – Number of Franchised and Company-Owned Sylvan Learning Outlets

Franchised

2021

Outlets at the Start of the Year: 466
Outlets at the End of the Year: 474
Net Change: +8

2022

Outlets at the Start of the Year: 474
Outlets at the End of the Year: 468
Net Change: -6

2023

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Outlets at the Start of the Year: 468
Outlets at the End of the Year: 474
Net Change: +6

Company-Owned

2021

Outlets at the Start of the Year: 6
Outlets at the End of the Year: 6
Net Change: 0

2022

Outlets at the Start of the Year: 6
Outlets at the End of the Year: 5
Net Change: -1

2023

Outlets at the Start of the Year: 5
Outlets at the End of the Year: 5
Net Change: 0

Section IV – News Updates on the Sylvan Learning Franchise

Unleashed Brands Acquires Sylvan Learning

Boxwood Partners Advises Sylvan Learning on Its Acquisition by Unleashed Brands, a Portfolio Company of Seidler Equity Partners

Sylvan Learning Center Announces One of Its Strongest Development Years Yet

Sylvan Learning Partners with Entrepreneurs Forever, Launches Sylvan MBA for Franchise Owners

Sylvan Learning Among 2023 Top Global Franchises by Entrepreneur

Sylvan Learning Ranked No. 174 on Entrepreneur’s 2024 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Sylvan Learning Franchise (Item 19, 2024 FDD)

With respect to the Sylvan System, as of December 31, 2023, Sylvan had 421 licensed territories in the United States, including a total of 459 Centers, which provided revenue reports to Sylvan.

Of these, 307 licensed territories operated continuously during the 24 calendar months of 2022 and 2023 under the same or similar form of joint Sylvan and SylvanSync License Agreement which is referenced by and included in the 2023 Disclosure Document.

This Item 19 does not include revenue from any licensed territory which operated during 2022 or 2023 pursuant to an earlier form of License Agreement which did not include the SylvanSync System offering; all 307 territories that are the subject of this Item 19 used SylvanSync in 2023.

This Item 19 also does not include revenue from any territories that closed or opened during 2022 or 2023, and therefore were not open for the full 24 months of 2022 and 2023.

The table below sets forth certain historic performance information for United States licensed territories that operated continuously throughout the 24 calendar months of 2022 and 2023 pursuant to a joint Sylvan and SylvanSync License Agreement. All such licensed territories are included in the following calculations.

The term “licensee” as used in this Item 19 refers to a person or entity that entered into a joint Sylvan and SylvanSync License Agreement.

The financial performance of company-owned territories is not included.

The figures included in this Item 19 have not been audited.

2023 Sylvan Territory Gross Revenues by Quartile

Top 25% of Territories by Gross Revenue

Number of Territories: 77
Average Gross Revenues: $815,079
Number and Percent That Met or Exceeded Average: 24 / 31%
Median Gross Revenues: $688,803
Highest Gross Revenues: $2,286,964
Lowest Gross Revenues: $527,644

Mid-Upper 25% of Territories by Gross Revenue

Number of Territories: 76
Average Gross Revenues: $432,048
Number and Percent That Met or Exceeded Average: 39 / 51%
Median Gross Revenues: $433,156
Highest Gross Revenues: $523,730
Lowest Gross Revenues: $341,766

Mid-Lower 25% of Territories by Gross Revenue

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Number of Territories: 77
Average Gross Revenues: $293,283
Number and Percent That Met or Exceeded Average: 41 / 53%
Median Gross Revenues: $294,502
Highest Gross Revenues: $339,622
Lowest Gross Revenues: $240,325

Bottom 25% of Territories by Gross Revenue

Number of Territories: 77
Average Gross Revenues: $169,133
Number and Percent That Met or Exceeded Average: 42 / 55%
Median Gross Revenues: $179,103
Highest Gross Revenues: $240,172
Lowest Gross Revenues: $40,616

Gross revenue numbers in this table include Sylvan System and SylvanSync System gross revenues as well as Sylvan EDGE gross revenues and Ace it! gross revenues, if any, for the given territory.

Not all franchisees delivered the Sylvan EDGE Program, which is optional. System-wide Sylvan EDGE Program gross revenues in 2023, as reported by franchisees, were $993,984.

Sylvan offered the Ace it! Program as a separate franchise opportunity from January 2006 until January 2016; Sylvan began to offer the Ace it! Program as an optional product license in 2016. Not all franchisees delivered the Ace it! Program, which is optional. System-wide Ace it! Program gross revenues in 2023, as reported by franchisees, were $5,632,957.

Of the 307 total territories included, 91% operated 1 Center within the territory, 8% operated two Centers, and 1% operated more than two Centers within the territory.

Some licensed territories operated Satellites in the territory as part of the Licensed Business during this period. Satellites are optional. Generally, licensed territories which operate one or more Satellites generate more revenue than those which operate only one Center. You are not required to operate any Satellite in your territory.

Sylvan offered substantially the same services to all of the 307 licensed territories included in the foregoing table, and substantially all of the licensed territories offered the same instructional services in reading, math, study skills, writing, and SAT/ACT test prep.

Section VI – Sylvan Learning Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️

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