Mathnasium Franchise Cost & Profit for 2024
This article is based on its 2022 FDD
Mathnasium is a franchised Math Learning Center that children visit at least twice a week. Children typically spend about 60 minutes completing math assignments through the Mathnasium system of learning. Mathnasium Learning Centers are open 5 days per week for 4 hours after school. The Mathnasium learning system pinpoints the greatest learning needs for each student, and makes a custom curriculum for each child.
Mathnasium’s Chief Executive Officer (CEO) is Shant Assarian, who joined the company in 2010. He served as an operating officer until 2020 when he was declared CEO. As of December 31, 2022 there were 948 Mathnasium franchises. 900 of these locations were in operation for at least 12 months. There are also 3 corporate owned Mathnasium locations bringing the total number of outlets to 951.
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How Is Mathnasium Franchise Positioned in the Education Industry?
The standard Education franchise in the U.S. costs $123,000 for a single franchise. The Education industry is one of the fastest growing sectors in the U.S. The industry itself is valued at over $2 trillion with over 1.4 million businesses. A standard education franchise should expect between $120,000 and $180,000 in sales the first year alone. By year three sales should be between $180,000 and $302,000. Be sure to check out all of these metrics on the Vetted Biz Education Profile.
Mathnasium charges a premium compared to other education businesses. There is a base of $500 paid for its royalty fee as well as 10% of monthly gross revenue. Similarly, the marketing fee is $250 plus 2% of gross sales. The industry norm is 5% for royalty and 3% for marketing.
Competitors
A major competitor to Mathnasium is the Goddard School, which charges a 7% royalty and 2% marketing fee. The median Goddard School costs about $954,000 and earned $1,699,054. The median Goddard School takes about 5 years to recoup the investment from the time a franchise development contract is signed. Moreover, the median franchise sells for over $1.5 million once again making it a desirable competitor to Mathnasium Franchise.
Kumon is a competitor in the education space that offers math and reading programs for children. Their service is quite similar to Mathnasium, requiring students to attend twice a week and spend 20-30 minutes on both math and reading. Kumon has a global presence, currently serving over 4 million students across 58 countries with 25,000 locations. In the United States, Kumon owns 27 locations, while the remaining 1,568 are franchised. The cost to open a Kumon franchise is similar to that of Mathnasium, ranging between $67,428 and $145,640.
The ongoing fees for Kumon are different from Mathnasium’s, consisting of a $15 royalty for each new student, $34 for each full-paying student, and $17 for partially-paying students. On average, the royalty fee comes out to be about $22 per student. To open a Kumon franchise, the applicant must hold at least $70,000 in liquid assets. An average Kumon franchise earns $678,000 in annual revenue and takes a little over 3 years to recoup the initial investment. Additionally, a Kumon franchise typically sells for $238,740, which is more than twice its midpoint investment of $102,174.
Given the above information, Kumon is a serious competitor to Mathnasium. If you are interested in learning more about Kumon, be sure to check them out on Vetted Biz.
How Much Is a Mathnasium Franchise:
The initial fee to open a Mathnasium Franchise is $49,000. This is due when the franchise agreement is signed. If you are opening an additional franchise this fee is reduced to $26,500 for each additional franchise. The expected cost to open a Mathnasium Franchise is $112,860 – $149,155. Each additional Franchise is $90,360 to $126,655
Estimated Initial Investment
| Type of expenditure | Amount | To Whom Paiyment is to be Made |
|---|---|---|
| Initial Franchise Fee | $49,000 for your first franchise; $26,500 if you are buying an additional franchise | Mathnasium |
| Expenses While Training | $2,500 to $3,000 | Hotels, Airfare, Travel, Restaurants, etc. |
| Base Royalty Fee | $0 to $500 per month | Mathnesium |
| Technology Fee | $110 per month | Mathnesium |
| Additional Technology Fee | $0 to $45 per month | |
| Rent (1st and last month rent) | $6,000 to $14,000 | Landlord |
| Paint, Carpet and Tenant Improvements | $5,500 to $13,500 | Vendors |
| Furniture, Signs, Equipment and Supplies | $10,000 to $17,000 | Vendors |
| Insurance | $1,200 to $1,500 | Insurance Agent |
| Business License, Name Registration | $250 to $1,000 | Local Municipality and State |
| Professional Services (Legal and/or Accounting) | $1,300 to $2,000 | Vendors |
| Phone and Utilities | $500 to $1,000 | Phone and Utilities companies |
| Video Surveillance and related equipment | $500 to $2,500 | Vendors |
| Pre-Open Advertising | $4,000 | Vendors |
| Additional Funds | $32,000 to $40,000 | Vendors, Landlords, Employees, Utilities, etc. |
| TOTAL (1st Mathnasium Center) | $112,860 to $149,155 | |
| TOTAL (Subsequent Mathnasium Center) | $90,360 to $126,655 |
Mathnasium Franchise Requirements
A personal meeting is required for any potential franchisee to ensure that they are a good fit. A center director is required to run the location. This director must complete many hours of training as well as other training services for other employees. All Mathnasium franchises must maintain a minimum sales level. Punishments for failing to meet this requirement can be loss of territory and even the termination of your franchise.
Mathnasium on Going Fees:
Mathnasium charges a premium 10% of gross sales royalty fee as well as a $500 base. In addition, the marketing fee is 2% with a $250 base.
How Much Do Mathnasium Franchise Owners Make:
The median of the top 50% of Mathnasium franchises earned $336,945 in revenue.
Based on the 2022 ITEM 19 for Mathnasium, we estimate that the average Mathnasium franchise made $270,000 in revenue for 2021.
| Initial investment(midpoint) | %Profit margin of average franchise sales | Estimated Profits | Time to recoup investment |
|---|---|---|---|
| $112,860 | 15% | $40,500 | 4.30 years |
| 20% | $54,000 | 3.58 years | |
| 25% | $67,500 | 3.23 years |
These estimates include a 1.5 year period from when a Mathnasium Franchise Agreement is signed. A standard franchise takes about 1.5 years to open and scale up after the initial agreement is completed.
Is the Company Franchise Profit Worth the Franchise Cost?
The median Mathnasium Learning Center is expected to sell for $213,109.68. This is for the top 50% of Mathnasium locations. This means that after a minimum of 4.30 years of collecting revenue you will earn approximately $100,250 if you decide to sell your location.
Under 1 Million in Net Sales:
0.56 * Net Sales
Max: $560,000
$1 Million – $5 Million in Net Sales
0.87 * Net Sales
$870,000 – $4,350,000
| Top 25% of Mathnasium Centers by gross receipts | Mid-Upper 25% of Mathnasium centers by gross receipts | Mid-Lower 25% of Mathnasium centers by gross receipts | Bottom 25% of Mathnasium centers by gross receipts |
|---|---|---|---|
| CATEGORY MEDIAN GROSS RECEIPTS | |||
| $430,421 | $276,613 | $198,669 | $124,463 |
| CATEGORY AVERAGE GROSS RECEIPTS | |||
| $481,829 | $278,823 | $201,239 | $120,819 |
| NUMBER OF MATHNASIUM CENTERS MEETING OR EXCEEDING AVERAGE FOR CATEGORY | |||
| 84 or %38 of 224 Mathnasium Centers in Top 25% | 102 or 46% of 224 Mathnasium Centers in Mid-Upper 25% | 109 or 48% of 224 Mathnasium Centers in Mid-Lower 25% | 127 or 57% of 224 Mathnasium Centers in Bottom 25% |
| RANGE OF GROSS RECEIPTS FOR CATEGORY | |||
| $1,994,339 – $336,945 | $335,679 – $234,591 | $234,299 – $165,996 | $164,589 – $44,238 |
| MEDIAN OF THE TOP 50% OF MATHNASIUM CENTERS BT GROSS RECEIPTS | $336,945 |
| AVERAGE OF TOP 50% OF MATHNASIUM CENTERS BY GROSS RECEIPTS | $380,553 |
| Number of Mathnasium Centers in top 50% meeting or exceeding the average of the top 50% | 153 or 34% of 448 Mathnasium Centers included in average |
| MEDIAN OF THE BOTTOM 50% OF MATHNASIUM CENTERS BY GROSS RECEIPTS | $165,906 |
| AVERAGE OF BOTTOM 50% OF MATHNASIUM CENTERS BY GROSS RECEIPTS | $161,118 |
| Number of Mathnasium Centers in bottom 50% meeting or exceeding the average of the bottom 50% | 239 or 53% of 448 Mathnasium Centers included in average |
How Many Mathnasium Learning Centers Have Opened and Closed?
Mathnasium has increased by 86 total number of locations since 2019. There have been 10 company owned locations that have closed as well as 8 franchises that have also closed.
How Many Mathnasium Franchises Are Currently for Sale?
There are currently 39 Mathnasium franchises for sale across the U.S. The first instinct may be to go out and purchase a location rather than going through the standard process of signing a franchise agreement and building your own location. However, it is important to analyze where these locations are being sold and why. 39 locations out of the total 951 outlets across the U.S. mean that over 4% of total outlets in the U.S. are currently up for sale. That is quite an alarming rate! Normally, if a location is successful a franchisee won’t be rushing to sell it. This is because the revenue they are earning on an annual basis will allow them to earn a profit on their initial investment and then sell at a later date.
Mathnasium Learning Center for Sale, CA (1995036)
| Orange Country, CA. |
|---|
| Asking price: | $200,000 | Cash Flow: | N/A |
| Gross Revenue: | $45,000 | Inventory: | $10,000 |
| EBITDA | N/A | Rent | $3,360 per month |
| FF&E | N/A |
Given that Mathnasium labels median revenue success from bottom 25% to the top 25% of locations revenue and earnings on their FDD you should be skeptical about purchasing a location without taking a deeper look. Before purchasing one of the Mathnasium locations for sale without knowing the revenue of that location it would be a foolish idea to rush into acquiring it. If the location is in the top 50% then it may be worth the investment assuming the contract lifespan with Mathnasium is in good
standing and can be extended. However, if it is in the bottom 25% of revenue and seems to have a number of challenges without being an expert on the area and education you should avoid acquiring the Mathnasium. It goes back to lemon law when purchasing a vehicle. You don’t want to get stuck with a lemon of a franchise and anytime you see 4% of total U.S. outlets for sale you should be raising an eyebrow.
Mathnasium Learning Center for Sale, CA (1996652)
| Poway, CA (San Diego Country) |
|---|
| Asking price: | $240,000 | Cash Flow: | N/A |
| Gross Revenue: | $395,000 | FF&E | N/A |
| EBITDA | N/A |
Highly Successful Mathnasium Learning Center for Sale, MA
| Middlesex Country, MA |
|---|
| Asking price: | $240,000 | Cash Flow: | N/A |
| Gross Revenue: | $395,000 | FF&E | N/A |
Mathnasium Learning Center for Sale, CT (1972386)
| Trumbull, CT (Fairfield Country) |
|---|
| Asking price: | $75,000 | Cash Flow: | N/A |
| Gross Revenue: | $163,500 | FF&E | N/A |
| EBITDA | N/A |
Systemwide Outlet Summary For Years 2019 to 2021
| Outlet type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2019 | 860 | 935 | +75 |
| 2020 | 935 | 927 | -8 | |
| 2021 | 927 | 948 | +21 | |
| Company-Owned | 2019 | 13 | 7 | -6 |
| 2020 | 7 | 7 | 0 | |
| 2021 | 7 | 3 | -4 | |
| Total Outlets | 2019 | 873 | 942 | +69 |
| 2020 | 942 | 934 | -8 | |
| 2021 | 934 | 951 | +17 |
Conclusion
Mathnasium is a great franchise opportunity. The cost to open a location is on the lower end of franchise costs. There are other franchises in the education sector that you can expect to pay over $1 million to open a location. Additionally, there is no minimum net worth fee. Moreover, you can expect to recoup your investment in just over 5 years and be able to sell the business for $213,109.86. While this may be the business for you, make sure to also check out other businesses offered on Vetted Biz and in the Education Sector.
