Kumon Franchise in 2024: Costs, Fee & FDD
Thinking of investing in a Kumon franchise? Discover why Kumon’s established brand, proven educational method, and extensive support system make it a compelling choice for franchisees in the education sector.
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Kumon is a well-established, globally recognized education franchise with a proven track record of enhancing students’ academic abilities. Its extensive support system and commitment to quality make it a strong contender for potential franchisees looking to invest in the education sector.
Kumon was founded by Toru Kumon, a Japanese math teacher, in 1958. The story began when Kumon developed a series of math worksheets to help his son, who was struggling with math in school. These worksheets emphasized self-learning and incremental progress, laying the foundation for what would become the Kumon Method. Today, Kumon is one of the world’s largest and most established education franchises, known for its significant impact on improving students’ academic performance globally.
Kumon offers after-school math and reading programs designed to help children from preschool through high school develop essential skills. The core service is the Kumon Method, which focuses on self-learning, allowing students to progress at their own pace. Ancillary services include parent consultations and progress assessments. Kumon’s core market comprises parents seeking supplementary education for their children to enhance academic performance and build strong foundational skills. The method is particularly popular among parents who value consistent, long-term educational improvement.
Kumon has a substantial global presence, with over 25,000 centers in more than 50 countries. In the United States alone, there are around 2,000 centers, serving tens of thousands of students daily. This widespread network demonstrates Kumon’s ability to cater to diverse educational needs across various cultures and educational systems. The daily customer base is immense, with millions of students worldwide participating in Kumon programs, reinforcing its reputation as a leader in the supplementary education industry.
Kumon offers a robust support system for its franchisees, starting with comprehensive initial training that covers the Kumon Method, business operations, and marketing strategies. Ongoing support includes regular training sessions, access to proprietary educational materials, and continuous performance evaluations to ensure franchisees can deliver high-quality education consistently. Additionally, Kumon provides marketing support to help franchisees attract and retain students. The strong support network and well-established brand reputation make Kumon an attractive investment for those passionate about education.
Kumon Franchise Insights
- Kumon’s unique self-learning method empowers students to take control of their own education, fostering independence and critical thinking skills from an early age.
- Franchisees benefit from Kumon’s strong brand recognition and extensive global network, with over 25,000 centers worldwide, ensuring a well-established market presence and support system.
- Kumon offers a relatively low initial investment compared to other education franchises, making it an attractive option for entrepreneurs passionate about education.
Kumon Franchise Key indicators
Growth YOY (%)
2%
vs industry 0%
Total U.S. Franchised Units
1,659
3-year Failure Rate
6%
vs industry 10%
How much does it cost to open a Kumon franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Kumon franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening a Kumon franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Kumon below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial franchise fee | $2,000 | $2,000 |
| Initial purchase of materials | $2,000 | $2,000 |
| Architect design | $0 | $10,000 |
| Leasehold improvements | $30,000 | $60,000 |
| Security deposit, if required | $0 | $26,500 |
| Rent | $3,000 | $7,000 |
| Furniture, equipment, Primary sign & supplies | $5,000 | $15,000 |
| Notebook computer at Kumon center | $500 | $2,000 |
| Professional fees | $1,000 | $3,000 |
| Liability insurance | $480 | $480 |
| Business license, name registration | $100 | $200 |
| Kumon lead management system suite | $200 | $550 |
| Recommended reading list | $2,600 | $2,600 |
| Fingerprinting, criminal background check | $18 | $60 |
| Payroll cost for assistants | $10,725 | $12,870 |
| Additional funds | $16,160 | $21,660 |
| Total | $73,783 | $165,920 |
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
To open a Kumon franchise, you will need to meet specific financial requirements. If you are planning on financing your Kumon investment, you will likely need at least 20% of the total investment amount in the form of equity (cash). The full investment amount includes various costs such as the franchise fee, training, and initial setup expenses. Additionally, you must have a net worth of at least $150,000 and liquid assets of $70,000. These requirements ensure that you have the necessary financial stability to support and grow your Kumon center effectively.
How much does a Kumon franchise owner make?
Calculating the salary of a Kumon franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Kumon franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
Revenue & Gross Sales
Unfortunately, Kumon does not disclose franchisee revenue or gross sales in its Item 19 if of its FDD, which typically is not a good sign. However, based on our analysis and research we estimate that Kumon franchises have an average gross sales of $300,000. Their franchises likely have varying results as performance of franchise locations in the tutoring industry is quite variable.
Which key factors impacted the average revenue performance of Kumon franchisees?
The performance of U.S. Kumon franchisees’ median gross sales revenue in recent years has likely been influenced by several factors. First, the increasing demand for supplementary education as parents seek to enhance their children’s academic performance has bolstered enrollment numbers. Additionally, the shift to online and hybrid learning models during the COVID-19 pandemic prompted a need for consistent educational support, which Kumon centers could provide. Furthermore, Kumon’s established brand reputation and the proven efficacy of its self-learning method have continued to attract new students and retain existing ones. However, economic challenges, such as rising operational costs and market competition, may have tempered revenue growth
Kumon Franchise Operational Costs
When considering opening a Kumon franchise, several key ongoing operational costs should be taken into account:
- Rent and Utilities Leasing a commercial space and covering utilities are significant ongoing expenses, with costs varying based on location and size of the center (Kumon).
- Staff Salaries Hiring and compensating assistants or tutors to help manage the center and provide instruction to students.
- Supplies and Materials Regular purchases of educational materials, worksheets, and other instructional resources necessary for the Kumon method (Kumon).
- Training and Professional Development Continuous training and development for franchisees and staff to stay updated on Kumon methodologies and business practices.
These costs are crucial to maintaining the quality and effectiveness of the Kumon educational experience and ensuring the center operates smoothly and efficiently.
Kumon Franchise Fees
Owning a Kumon franchise is different from owning an independent, non-franchised business. All franchises tend to charge ongoing fees that franchisees are required to pay to operate. Kumon requires their franchisees to pay the below fees:
- Royalty Fee initial enrollment fee of $30 multiplied by the number of new students plus $40.50 times the number of full-payment students enrolled, and $20.25 times the number of partially exempt and/or prorated tuition students for each Subject-Franchise plus $36 times the number of full-paying students enrolled, and $18 times the number of partially exempt and/or prorated tuition students for each Subject-Franchise.
- Advertising and Marketing Fees Typically franchisees are required to contribute to both national and local advertising funds. However Kumon does not charge any marketing fees at this time.
- Additional Fees There are additional fees for training programs, technology, and other items provided by Kumon that may be applied.
These ongoing fees are essential to consider when planning the financial aspects of owning and operating a Kumon franchise. They cover the costs of brand support, advertising, and ongoing operational assistance provided by Kumon.
Kumon Franchise Earnings
The earnings of a Kumon franchise owner can vary significantly based on a variety of factors including location, sales volume, operational efficiency, and cost management. However, on average, successful Kumon franchise owners can earn a significant income.
Kumon franchisees have an estimated average gross sales of $300,000. Based off of the average gross sales, we can estimate a Kumon franchisee makes $45,000 in estimated earnings (EBITDA) per year, assuming that the franchisee is an owner-operator in the location. This means that you can consider the average salary of a Kumon franchise owner to be roughly $45,000, plus any additional salary from acting as a manager or tutor, before interest, taxes, depreciation, and amortization (EBITDA).
If the franchisee is semi-absentee, then earnings will be significantly lower based off of the costs of having a hired manager.
How to Open a Kumon Franchise
Becoming a Kumon franchisee is a rigorous process that involves financial scrutiny, extensive training, and thorough evaluation. However, it offers the potential for a lucrative business opportunity backed by a globally recognized brand and comprehensive support system.
- Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the Kumon franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
- Initial Interview After submitting the inquiry, a Franchise Recruitment Manager will contact you to conduct an initial interview. This conversation helps determine your suitability and allows you to ask preliminary questions about the franchise.
- Application Submission If the initial interview is successful, you’ll be invited to complete a formal application. This includes providing proof of your financial qualifications, such as your net worth and liquid assets.
- Review of Franchise Disclosure Document (FDD) Once your application is approved, you’ll receive the Franchise Disclosure Document (FDD). This legal document provides detailed information about the Kumon franchise, including fees, obligations, and financial performance. You’ll need to review this document thoroughly.
- Background Checks As part of the approval process, you’ll undergo credit and background checks, including an FBI criminal records check.
- In-depth Interviews You’ll have a more detailed interview with a Kumon General Manager. This step assesses your commitment and understanding of the franchise model.
- Franchisee Training Upon successful completion of the interviews and background checks, you will participate in the Kumon Instructor Development Program. This includes two four-day training sessions over two months at Kumon University in Ridgefield Park, New Jersey, and visits to existing Kumon centers for hands-on experience.
- Site Selection and Approval During your training, you’ll work on selecting a suitable location for your Kumon center. Kumon will assist with site approval and help finalize the lease for your chosen location.
- Signing the Franchise Agreement Once you complete the first session of training and your site is approved, you’ll sign the Franchise Agreement, making you an official Kumon franchisee.
- Center Setup Begin setting up your center, including ordering necessary materials, hiring staff, and setting up your learning environment. Kumon provides ongoing support to ensure your center meets their standards.
- Grand Opening After completing all the preparations, you will officially open your Kumon center. Continuous support and additional training will be provided to help you succeed in your new venture.
By following these steps, you’ll be well-prepared to start and operate your Kumon franchise, ensuring you have the knowledge and resources to provide quality educational services.
Pros & Cons
Pros
Established Brand and Reputation: Kumon is a globally recognized brand with over 60 years of experience in the education sector. Its proven track record and established reputation can attract a steady stream of students
Proven Educational Method: The Kumon Method emphasizes self-learning and incremental progress, which has been shown to significantly improve students’ math and reading skills. This method appeals to parents who want a reliable, results-driven program for their children
Comprehensive Training and Support: Kumon provides extensive initial training and ongoing support, including marketing assistance and continuous professional development. This ensures that franchisees are well-equipped to run their centers effectively
Relatively Low Initial Investment: Compared to other education franchises, Kumon offers a lower initial investment, making it an accessible option for many potential franchisees.
Cons
Intensive Time Commitment: Running a Kumon center requires a full-time commitment, typically averaging 40 to 80 hours per week. Franchisees must be actively involved in the day-to-day operations, which can be demanding.
Market Competition: The supplementary education market is highly competitive, with numerous alternatives available to parents. Franchisees need to invest in marketing and differentiation to attract and retain students.
Economic Sensitivity: Franchise performance can be sensitive to economic downturns, as educational services are discretionary expenses for many families. Economic challenges can affect enrollment numbers and revenue.
Potential for Slow Return on Investment: Due to the high operational costs and competitive market, it may take several years for a Kumon center to become profitable. Franchisees need to be prepared for a long-term investment before seeing significant returns.
