Education Franchise: Huntington Learning Center Review (2021 FDD)
Written by: Patrick Findaro
Source Based on Business Listings, Vetted Biz requires Businesses for Sale to share financial information on sales and earnings through credible sources, including but not…: 2020 Huntington Learning Center Franchise A franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business… Disclosure Document (FDD)
What is Huntington Learning Center?
The Huntington Learning Center franchise offers an opportunity to own a franchise in the Education Industry. As a franchisee you will provide in-person tutoring and test prep services to school-aged students to be conducted at your brick-and-mortar facility.
Raymond J. Huntington founded the business in 1977 and has run the business since with his wife. They have developed the “Huntington System” which consists of uniform standards and procedures for the marketing and operation of a Franchised Business.
The Huntington Learning Center had 282 franchised locations open at the end of 2019.
Initial Franchise Fee Is a fee that franchisees pay to franchisors when signing an agreement, for establishing a franchise relationship, and getting some initial services. It is…
$28,000
Huntington Learning Center Franchise A franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business… Cost
The total investment necessary to begin operation of a Huntington Learning Center franchised business ranges from $133,458 to $276,669.
Financing:
New Franchisees can borrow up to $100,000 in opening their first Franchised Business, providing they meet our requirements. The “Lender”, who is Huntington Learning Corporation, would deduct a nonrefundable $4,200 loan facility fee from the loan amount.
Additional Cost Breakdown:
Additional Cost Breakdown
| Initial Franchise Fee | $28,000 |
| Travel, living expenses for initial training | $0 – $4,690 |
| Curricula and testing Materials | $19,247 – $19,847 |
| Furniture, Computers | $33,407 – $38,053 |
| Start-up Supplies | $4,000 – $8,000 |
| Advertising | $19,124 |
| Training & Technology Initial Fee | $6,000 |
| Training & Technology Fee | $380 (Monthly) |
| Architect Design | $0 – $5,500 |
| Security & Utility Deposits; license fees | $500 – $3,000 |
| Real Estate and Improvements | $0 – $77,000 |
| Exterior Sign | $500 – $7,500 |
| Interior Graphics | $2,175 – $5,875 |
| Professional Fees Professional fees are revenues or expenses of services from people specially trained in specific fields of arts and sciences. eg as doctors, architects, lawyers,… | $500 – $3,000 |
| Loan Facility Fee | $0 – $4,200 |
| Insurance | $1,625 – $6,500 |
| Additional Funds AFN = Projected increase in assets spontaneous increase in liabilities any increase in retained earnings Known as AFN or additional funds needed It is… (3 months) | $18,000 – $40,000 |
| Total Investment | $133,458 to $276,669. |
Ongoing Franchise Costs and Fees:
Royalty: 9.5% of Gross Revenue The total amount in dollars made in the business before expenses are deducted. See also Sales. per month ($2,000 minimum)
Contribution to the Huntington Ad Fund: 2% of Gross Revenue per month ($500 minimum)
Minimum Advertising Requirement: $57,000 per year
Other Fees (Accounting, Call Center, Internet and Software): ~$1,500 per month
Huntington Learning Center Sales The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue. Figures:
The following sales figures represent 212 of the 286 franchised locations.
Table 19-1 2019 Gross Revenue of the 212 Hunnington Learning Centers open all of 2019 under the same franchisee (the “Open Franchise Centers”)
| Average Gross Revenue | Number greater tan average | Percent greater than average | Lowest Gross Revenue | Highest Gross Revenue | Median Gross Revenue | Number greater than median | Percent greater than median | Lowest Gross Revenue | Highest Gross Revenue |
|---|---|---|---|---|---|---|---|---|---|
| $510,686 | 79 | 37% | $60,676 | $3,045,736 | $435,074 | 106 | 50% | $60,676 | $3,045,736 |
Key Highlights from Sales Figures:
Average Gross Revenue: $510,686
Highest Gross Revenue: $3,045,736
Lowest Gross Revenue: $60,676
Huntington Learning Center Income Statement One of the major financial statements focused on a business’s revenues and expenses in a particular period. It is also known as the profit…:
Huntington Learning Centers, Inc. Statements of Income Income, also known as earnings or profits, is money that a person or a business receives in return for working, providing a product or… and Retained Earnings Total earnings received by a business based on the U.S. Income Tax Return. The financial numbers of these earnings depend on the type of… Years Ended December 31,2019, 2018 and 2017
| 2019 | 2018 | 2017 | |
| Revenue | |||
| Initial franchise and option fees | 1,126,651 | 1,211,144 | 1,803,812 |
| Continuing franchise feesThe initial franchise fee is a fee that the franchisor charges you so you have the right to use its logo, brand name, products, and… | 17,393,163 | 15,965,234 | 14,596,457 |
| Equipment and materials | 575,270 | 424,799 | 374,664 |
| Totals | 19,095,114 | 17,601,177 | 16,774,933 |
| Costs and expenses | |||
| Franchise sales and administrative expenses | 9,720,171 | 9,061,985 | 8,802,615 |
| Advertising and promotion | 859,463 | 1,008,350 | 1,365,316 |
| Allocated general and administrative expenses | 4,112,177 | 5,642,381 | 4,978,047 |
| Totals | 14,661,811 | 15,712,716 | 15,145,978 |
| Income from operations | 4,433,303 | 1,888,461 | 1,628,955 |
| Interest A payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at… income | 29,454 | 25,059 | 32,656 |
| Net income | 4,462,757 | 1,913,490 | 1,661,611 |
| Retained earnings, beginning of year | 7,334,396 | 6,404,860 | 6,324,473 |
| Less: Cumulative effect of adopting new scouting standard | 1,010,041 | – | – |
| Less: Distributions | 1,148,742 | 983,954 | 1,581,224 |
| Retained earnings, end of year | 9,638,370 | 7,334,396 | 6,404,860 |
Income Statement Key Insights:
The company in 2019 posted a positive net income of 4.5 million. This is a large increase from 2018 and 2017 which saw net income of 1.9 million and 1.6 million respectively.
The company was able to earn more from their continuing franchise fees, while also lowering their advertising and administrative expenses.
Competition:
The market for tutoring and test prep is developing and is increasing in competition. You will compete with free, for-profit, and not-for-profit businesses that offer services that are the same as or similar to Huntington Services. Some competitors include Mathnasium, The Goddard School, and The Tutoring Center.
Conclusion:
Huntington Learning Center is a well-established that has been around since 1977 and has shown strong revenue figures from their franchisees. The company has 282 franchisee locations and has average revenue of over $500,000!
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.
