Franchising helps education centres to expand quickly. It is also a great source of income for highly sought academies because the brand is well known. However, franchisors are cautious about who represents the business because they don’t want to risk giving the franchise to someone that will ruin their reputation.
If you have multiple franchise opportunities, these considerations will help you determine your best option.
Contract Duration
Franchises usually have a contract duration beyond which the franchiser can request an extension or terminate the contract. Sometimes the contract duration is pegged on the franchise fees. If the cost is low, the contract duration will likely be low. On the other hand, if the fees are higher, it is likely because the contract lasts longer.
However, sometimes the fees are high because the brand is quite popular, and the returns will likely be higher. So, you need to consider the capital investment against the contract duration and return on investment.
Hidden Expenses
It is easy to give in and invest in a learning franchise when the fees look attractive. However, without looking at the hidden cost, it is easy to find yourself in a financial mess, especially when you don’t have sufficient capital to cover the expenses until the school takes off and becomes profitable.
Marketing is one of the most critical costs to consider when investing in an education business franchise. Even though the brand is well known, the location will be new, and you’ll need to market it, just as you would a new school.
Proximity To Other Schools Bearing The Same Name
Often, franchisors have a list of possible locations for learning franchises. In rare cases, applicants are requested to pick an independent location subject to scrutiny. If approved, the franchise will proceed with its plans to establish the new school in the area.
Sometimes the franchisor rejects the location. This may be for various reasons, including another franchise nearby. Franchisors appreciate that their franchises will compete with other schools. However, they try to minimize competition between schools bearing the same names.
If you wish to establish a school at a high-end mall, the request may be rejected if a similar franchise is 100m away.
The Brand’s Reputation
Investing in a franchise is costly, so you should pick one likely to have high returns. One way to guarantee this is by looking at a brand’s reputation. Most brands are careful when choosing franchises because when one messes up, the entire brand suffers.
This is especially important in education business franchises because once parents lose faith in the brand, they readily move their children to another school, and the brand will suffer for years.
Like any other business, you must perform due diligence before settling for a learning franchise. The benefits far outweigh the costs. However, one wrong move may delay your franchise’s success. It will also cost you more to make up for avoidable shortcomings.
Picking an education business franchise that provides ongoing support is crucial to the success of your business.