Growing Tutoring Franchise Offers a Lesson in Expansion

Tutoring businesses are looking for small retail spaces. These businesses are becoming very popular due to the increased competition to get into a good university.


Photo Courtesy of CoStar.

Private tutoring has become a multi-billion business as competition to get into good universities grows and the cost to get into those schools keeps rising.


Franchises drive a good bit of the tutoring business and fill a lot of small spaces in retail centers. Kumon, a Japanese company, and Hunt Valley, a Maryland-based Sylvan Learning company, dominate the market.


Companies such as Best in Class Education Centers founded by Hao Lam, the company’s CEO who left Communist Vietnam in 1988, are among the variety of tutoring options trying to carve a share of the industry.


Lam plans to open 20 locations across the country this year and another 20 next year to take the brand from 61 locations to more than 100 in 12 states.


After leaving Vietnam, he worked his way through the University of British Columbia to earn a degree in mathematics. Lam tutored classmates along the way, which he said helped him develop a passion for education.


Total investment in a location runs $63,000 to $125,000. Many of the franchisees have a corporate background but other haves a background in education.


Many retail centers like having this type of tenant. A student goes once a week for a 75-minute class. Parents who wait rather than drop off have some free time to spend visiting the shopping center.


The company does a thorough demographic analysis when looking at areas for expansion, focusing on the student populations and the convenience factor.


Typically, the franchise leases 1,000 to 1,500 square feet. Most times it seeks out retail

centers, but several locations are in single-story office parks.


Kumon is considered their primary competitor, but Lam plays a big role in helping with the hunt for real estate. They are not afraid to be near their competitors.


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