Eight franchise brands run a tutoring service. Here they are beside the independent version of the same business, with each brand’s fees as it publishes them and worked out in dollars. A brand can bring customers an independent has to earn one by one. The question is whether it brings in more than it costs.
Typical for a tutoring service: $150k to $1.2M in sales, and the owner keeps 20% to 35% after paying for its own marketing. Change either to your own numbers.
How the two sides are counted
Sales. A brand’s name brings customers an independent wins one at a time, so each brand is worked out at the sales it reports where we have them, and at yours where we don’t.
Marketing. On your own you pay for all of it, about 3% of sales here (the SBA’s usual range for ongoing marketing). The ad fund does part of that job, so it is counted once, not twice.
Survival. New franchised businesses were about 5 to 6 points more likely to make it through their first two years in Census data, and about half of all new businesses close within five years. It is not in the dollars; each brand’s details give the sources.
Your own tutoring service and each brand, side by side
The independent version
Your own tutoring service
Built and run under your own name
Cost to open
$39k to $179k
Annual sales
$420ktypical
Franchise fee
None
Royalty + ad fund
Noneall marketing is yours
$117,600
The owner keeps in a year, after about $13k of marketing
Taking new owners
Best Brains Learning Centers
After-school learning center
Total investment
$30k to $134k
Avg. annual sales
Ask the brand
Franchise fee
Not listed
Royalty + ad fund
14% of sales
$59k
The owner keeps in a year at $420k in sales (your sales), after $59k to the brand
$59k less a year than on your own
Taking new owners
Club Z! Tutoring
In-home and online tutoring
Total investment
$38k to $50k
Avg. annual sales
Ask the brand
Franchise fee
$28k
Royalty + ad fund
6% to 8% of sales
$84k to $92k
The owner keeps in a year at $420k in sales (your sales), after $25k to $34k to the brand
$25k to $34k less a year than on your own
Taking new owners
The Tutoring Center
Tutoring center
Total investment
$87k to $169k
Avg. annual sales
Ask the brand
Franchise fee
$32k
Royalty + ad fund
In the details
$100k
The owner keeps in a year at $420k in sales (your sales), after $18k to the brand
$18k less a year than on your own
Taking new owners
Tutor Doctor
In-home and online tutoring
Total investment
$94k to $221k
Avg. annual sales
Ask the brand
Franchise fee
$55k
Royalty + ad fund
8% of sales
$84k
The owner keeps in a year at $420k in sales (your sales), after $34k to the brand
$34k less a year than on your own
Taking new owners
Kumon
Math and reading tutoring
Total investment
$102k to $234k
Avg. annual sales
Undisclosed
Franchise fee
$2k
Royalty + ad fund
In the details
The fee is not a simple share of sales, so it is not worked out in dollars. The details show it as the brand words it.
Taking new owners
Sylvan Learning
Tutoring and test prep
Total investment
$118k to $288k
Avg. annual sales
Franchise fee
$47k
Royalty + ad fund
11% + 5% of sales
$63k
The owner keeps in a year at $420k in sales (your sales), after $67k to the brand
$55k less a year than on your own
Taking new owners
Mathnasium
Math tutoring
Total investment
$127k to $166k
Avg. annual sales
Franchise fee
$49k
Royalty + ad fund
10% + 2% of sales
$76k
The owner keeps in a year at $420k in sales (your sales), after $50k to the brand
$42k less a year than on your own
Taking new owners
Huntington Learning Center
Tutoring and test prep
Total investment
$178k to $326k
Avg. annual sales
Franchise fee
$42k
Royalty + ad fund
9.5% + 2% of sales
$78k
The owner keeps in a year at $420k in sales (your sales), after $48k to the brand
$40k less a year than on your own
Free account
See all 8 tutoring service brands side by side
Every brand’s investment and fees, and what the owner keeps against running your own
The yearly sales the first 3 report, and a plus to add brands to your comparison and benchmark them in your account
Members see the sales every franchisor reports, for every brand
Free, no card. A new account accepts the Terms and the Privacy Policy. smbnest is a self-assessment tool and never takes a cut of your deal or a fee from a franchisor.
Before you sign: what to read in the disclosure document
Every franchisor must give you its Franchise Disclosure Document at least 14 days before you sign or pay. These are the parts that answer the questions above.
Items 5 to 7, the fees and the investment. The franchise fee, every other fee (technology, training, transfer, renewal), and the full opening budget, including working capital.
Item 19, what owners earn. Whether the brand states owner sales or earnings at all, and for which units. Put its figures in the boxes above in place of the typical ones.
Item 20, units opened, closed and sold. How many owners left in each of the last three years, and a list of current and former owners you can call.
Item 12, the territory. Whether you get a protected area, and what the brand can open or sell inside it.
Item 21, the franchisor’s own finances. Whether the company behind the brand is in good health.
smbnest is a self-assessment tool, not individualized advice. Fees are as each brand publishes them on its franchising page and in its disclosure document, reviewed in the month shown, and change; the figures in dollars are worked out at the sales you enter and are not a forecast. We never take a cut of your deal or a fee from a franchisor. Before you sign, speak with a franchise attorney and a qualified financial adviser, and call owners from the disclosure document.
Your guidesmbnest
The guide is an automated assistant. Answers come from this business’s model, its sources and your plan; they are general information, not legal, tax or financial advice. Talk to a person