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Kumon Franchise ProfileChildren’s Franchises > Education & Tutoring |
What is the Initial Investment for a Kumon Franchise?
To open a Kumon franchise, the initial investment ranges from $65,500 to $73,783. This includes a franchise fee of $2,000. Additionally, potential franchisees should be prepared for ongoing costs, such as a royalty fee of 40% and a marketing fee of 10%. It's essential to ensure you have the necessary cash reserves, which should be between $73,783 and $165,920, along with a net worth requirement of $100,000 to $150,000.
What is the Financial Performance of a Kumon Franchise?
Kumon franchises have demonstrated strong financial performance, with an average annual revenue per unit of approximately $93,490. The median annual revenue is slightly lower at $87,901, while some units report revenues as low as $30,000 and as high as $1,200,000. With a breakeven time of about 12 months and an investment payback period of 24 months, the franchise presents a potentially lucrative opportunity for investors.
What Are the Typical Expenses for Running a Kumon Franchise?
Running a Kumon franchise involves various expenses that can total between $73,783 and $165,920 annually. Key expenses include rent, which can range from $3,000 to $7,000, and payroll costs for assistants, estimated between $10,725 and $12,870 for three months. Other costs include utilities, professional fees, insurance, and business licenses. Understanding these expenses is crucial for effective financial planning and management.
How Many Kumon Franchises Are Currently Operating?
As of 2023, there are 1,618 franchised Kumon units in operation, with a slight increase from 1,606 in 2022. The total number of Kumon units has also grown, reaching 1,640. While the number of corporate-owned units has decreased from 31 in 2021 to 22 in 2023, the overall growth in franchised units indicates a robust franchise model that attracts new investors and supports existing franchisees.
Kumon Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Kumon Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 1599 | 1634 | 1640 |
| Net Change YoY | 35 | 6 | |
| Franchised Units | 1568 | 1606 | 1618 |
| Net Change YoY | 38 | 12 | |
| Corporate Units | 31 | 28 | 22 |
| Net Change YoY | -3 | -6 |
Investment Overview
The initial investment for a Kumon franchise ranges from $65,500 to $73,783. This includes a franchise fee of $2,000, with additional costs for marketing (10% of gross sales) and royalties (40% of gross sales). Aspiring franchisees should also prepare for a cash requirement between $73,783 and $165,920, depending on their specific setup and operational needs.
Revenue Potential
Kumon franchises have shown promising revenue potential, with average annual revenue per unit at $93,490 and a median of $87,901. The range of annual revenue varies significantly, from as low as $30,000 to as high as $1,200,000, indicating that individual performance can differ based on location and management effectiveness.
Breakeven and Payback
Franchisees can expect to reach breakeven within approximately 12 months of operation. The investment payback period is estimated at around 24 months, allowing franchisees to recoup their initial investment relatively quickly if they effectively manage their operations and marketing efforts.
Franchise Growth
Kumon has experienced steady growth in its franchised units, increasing from 1,568 in 2021 to 1,618 in 2023. This growth trend reflects the brand's ongoing appeal and the increasing demand for supplemental education services, positioning franchisees for potential long-term success in a growing market.
Corporate Structure
Kumon operates both franchised and corporate units. As of 2023, there are 1,618 franchised units and 22 corporate units. This structure allows Kumon to leverage both franchisee investments and corporate resources to support brand growth and operational consistency across locations.
Operational Costs
Franchisees should anticipate various operating expenses, which can include rent ($3,000 - $7,000 annually), payroll for assistants (approximately $10,725 - $12,870 for three months), and utilities ($16,160 - $21,660). Understanding these costs is crucial for effective financial planning and maintaining profitability within the franchise model.
Frequently Asked Questions
The initial investment for a Kumon franchise ranges from $65,500 to $73,783, which includes the initial franchise fee of $2,000 and other startup costs.