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Kumon franchise cost, success rates and more in our video

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00:00 Introduction
00:15 Kumon Franchise Presentation
00:30 Kumon Franchise Disclosure Document 2020
01:16 Initial Franchise Fee
02:07 Franchise Costs to Start-Up
02:56 Red Flags at Kumon FDD
03:41 Income Statements
04:10 Conclusion

#Kumon #VettedBiz #Franchising #Franchise #FDDReview kumon

The franchisee will operate an after-school center that provides math and reading programs using the Kumon Method of learning (“Kumon Center”). Children are given the opportunity to attend Kumon Centers twice each week throughout the year for approximately 20–30 minutes per subject and complete daily assignments at home on non-Center days.

In 1954, Toru Kumon developed the Kumon Method in Japan. Mr. Kumon was a Japanese high school math teacher and created a supplemental math program for his son, who was struggling with second grade math. Mr. Kumon’s method was so successful that his son reached calculus by the sixth grade. This then turned into an international business and currently Mr. Tanabe was appointed President and has been a member of Kumon’s Board of Directors in October 2013.

As of December 31, 2019, approximately 4,200,000 students were studying the Kumon Method in approximately 25,000 after-school Centers in 58 countries. In North America, there were approximately 405,000 students studying it. We operated 21 company-owned Kumon Centers, and there were 1,547 franchised Kumon Centers.

Initial Franchise Fee for Kumon Centers
$1,000
Franchise Cost:
The total investment ranges from $74,428 – $156,590

Additional Cost Breakdown:
Training Agreement Deposit Fee: $500
Expenses while training: $5,150 – $8,880
Initial Franchise Fee: $1,000
Initial Purchase of Materials: $1,000
Architect Design: $0 – $10,000
Leasehold Improvements: $31,500 – $60,000
Security Deposit: $0 – $15,000
Rent: $2,500 – $5,000
Furniture, Equipment, Primary Sign & Supplies: $3,400 – $12,000
Notebook Computer: $400 – $2,000
Professional Fees: $1,000 – $3,000
Liability Insurance: $480
Business License, Name Registration: $100 – $200
Lead Management Telephone System: $480 – $600
Recommended Reading List: $2,550
Payroll Cost for Assistants (3 months): $7,350 – $8,820
New Center Marketing: $4,000 – $8,000
Additional Funds: $13,500 – $18,000

Ongoing Franchise Costs and Fees:
Royalty Structures:

$15 x the # of new students

$34 x the # of full paying students

$19.13 x the # of partially paying students

Sales Figures:

There were 1,547 franchised Kumon Centers across North America. While it does not disclose actual revenues made by new centers, they offer statistics for new Kumon Centers.

Key Highlights from Sales Figures:
As seen in the third column, there is an average of 81 students enrolling after 12 months. We are unable to deduce the revenue from just the number of students enrolled because the pricing varies depending on a couple of factors such as the amount of subjects a student takes and whether they are enrolled with a partial payment or full payment plan.

Income Statement Key Insights:
The franchisor Kumon North America Inc has very solid financials and is seen in their net income of over $27.5 million for the year ending in 2019. This is small increase from 2018, but from 2017 to 2018 they saw almost 100% growth in net income.

Competitions for Kumon Centers:
There will be competition from educational services offered on the Internet, tutoring institutes, tutoring centers, learning centers, test-prep centers, cram schools, individual tutors, self-tutoring programs, and other Centers. Some franchises that Kumon competes with are Club Z!, Mathnasium, and Tutoring Club.

Conclusion:
The Kumon Franchise offers a great opportunity to start a fulfilling business and join a well-respected company that has proven results year after year.

While this may be the business for you, make sure to also check out other businesses offered on Vetted Biz and in the education industry.

Analysis Provided by: Brooks Gammill Vetted Biz Intern

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