You Do The Math
This story appears in the July 1999 issue of Entrepreneur. Subscribe »
The collision was horrific. In high school, mathematics had been easy for me--I could just sit for an hour and stare aimlessly while the instructor scrawled his cryptic chalk symbols. But when my lack of preparation met with my first college math exam, the twisted metal of my mind created a big fat F.
A tutor changed my world. The driving force behind Kumon Math and Reading Centers is the idea that every student should have such an opportunity. The centers are designed to help students of all ages understand the seemingly incomprehensible.
From my observations, the Kumon system, which originated in Japan, is a series of tests structured to create incremental success so every student feels like an achiever. These math and reading masters have created a learning structure based on constant repetition and measured growth. Students set their own pace, review their past work and then test again.
Becoming a franchisee is an interesting process. It starts normally enough with the completion of an application. Then candidates sign a training agreement and spend a strenuous seven days at a regional training center.
Trainees take proficiency tests and are assigned homework. If you don't pass the exams, you'll see Kumon training methods up close and personal until you do. The homework requires many hours and is so intensive, even your kids will feel sorry for you.
Your studies will also consist of creating a business plan. If your site is approved, you'll pay only $800 for the rights to open a Kumon Center, plus $200 for the training kit.
Over the next 12 months or so, you'll be immersed in your temporary license training period (TLP). In addition to continued tests, you'll have to pass business benchmarks and attend instructor meetings. You'll also be required to pay a higher royalty fee of $31.50 per student per month during the TLP. To get past this stage, you must have 30 full-paying math students and 20 full-paying reading students at the end of your first year of business.
It appears to me Kumon is more concerned with educating children than making money. It offers no protected territories and reserves the right to place both franchises and company-owned centers wherever it wishes. Furthermore, you're not allowed to operate more than two locations.
Although educating America's youth is a laudable enough goal, let's do some math for the more hedonistic among us. Recommended tuition for a full-time student is about $75 per month plus a one-time registration fee of $30. Assuming you have 50 students by the twelfth month of operation--enough to get past your TLP--your gross revenues for the month would be $3,750, excluding registration fees. The franchisee I interviewed had 165 students, totaling $12,375 per month. Once you pass the TLP, you'll be required to pay the franchisor $28 per student per month. That leaves a gross profit of $2,350 with 50 students--$7,755 with 165 students. Subtract rent for about 1,000 square feet of space; marketing costs; and payroll for the local students who work for you after school. The result? Kumon can provide you with an income potentially better than that earned by the teachers you'll be supplementing. The franchisor is conscientious about assisting in your growth and will even help franchisees with rent for up to a 12-month period during the first 36 months of operation.
Kumon--the top-ranked miscellaneous training systems franchise and No. 23 overall in Entreprenuer's 1999 Franchise 500®--is a low-cost opportunity that's been refined during its more than 40 years in business. The franchisor offers marketing and financial support, and boasted 2,617 franchise locations in North America as of March 1999.
Todd Maddocks is a franchise attorney and small-business consultant. You can reach him at TMaddocks@aol.com
Contact Source
Kumon Math and Reading Centers, (800) ABC-MATH
