Thinking of Buying an In-Home Tutoring Franchise. Think Again!
I am not trying to dissuade you in anyway. But I have been a manager for 3 tutoring agencies in the past 20 years. Don’t make the mistake my friend did and bought a tutoring franchise in a rush. Although they say that tutoring is recession proof. It is not the recession you have to be worrying about, but the amount of competitors in the industry. Since 2007 there have been numerous tutoring business start-ups. This is what happens when an industry is not regulated. It has become so unregulated that we are seeing very young entrepreneurs open up a business who have never stepped into a classroom other than being a student themselves.
Government officials have been thinking about regulating the tutoring industry similar to current daycare regulations, as we are seeing more an more tutoring agencies open up who are in direct care of children. Currently with childcare if you have more than 5 students who have to register your agency with the government. They are also thinking about regulating who owns the agencies. For now it stands that anyone can open up a tutoring agency. Should the owner have a minimum certification such as a teaching or education degree?
Opening up a tutoring business is not as easy as it sounds. You have to hire an accountant, a marketer a human resource specialist. And don’t forget you may also have to troubleshoot customer complaints, teachers that leave in the middle due to a job propositions etc..
Opening up a franchise in the year 2000 when there were not many competitors and you can pick and choose the best geographic location, is not the same as opening up a tutoring franchise now with in 2013 with the large amount of competitors we are seeing. You wind up paying 15-20 grand alone on marketing! Not to mention an average of a 30K start up fee an 8% loyalty fee on top of that. Trust me, do not do what my friend did and winded up 60K in the whole the first year only to make 10K the following year. So he decided to pack it up and sold his franchise for 15K just to get out of it.
Whoever is selling you a tutoring franchise in Canada is not telling you the reality behind owning a tutoring franchise in the year 2013. In addition you are buying a very small and most likely not popular geographical area. That is really not worth it as the competition has increased ten fold since the glory days of buying a tutoring franchise in the year 2000.
1. With so many other new competitors popping up every month or so it is getting more difficult to make the income the Franchisor is telling you without spending 15-30 K on advertising.
2. Owning a tutoring franchise in a smaill geographical area means that another franchisee may be in turf war with you. Who is to stop them from advertising in your location on-line or physically. The Franchisor is definitely not.
3. It all sounds great to own a tutoring franchise but you have to give it some thought as other competitors have already accessed your location and have planted the seed so to speak. In reality your Franchisor is making money of you buying their name! And not from the royalty fees you will be giving them.
I would stick to buying a brick and motor franchise. This way you know that your location cannot be compromised by other competitors as you clearly establish the no compete guidelines with the landlord who is renting the space out for you in the mall or office.
Penelope Sanchez is a part-time sales manager at Tutors For Less in Toronto for the past 7 years.