Initial Investment

If you are applying for your first Kumon Center Franchise, the Deposit Fee is $500 for an Instructor Development Program Kit. We will apply the Deposit Fee towards your Initial Franchise Fee if you successfully complete the Instructor Development Program and sign a Franchise Agreement.

The estimate includes the first month’s rent. You must operate your center in retail facilities such as a storefront, shopping center or strip mall unless we grant you a written exception to this requirement. We will not accept a location where the lease term is less than two years, the space is less than 1000 square feet, or you are unable to affix one of our exterior signs. We will not permit any activity other than the operation of a Kumon Math and Reading Center for any site we approve. You may not use or permit the use of the site we approve for any other purpose or activity at any time without first obtaining our written consent. Rent will vary according to the center’s location and whether your landlord shall require a security deposit. Kumon does not under any circumstances act as a guarantor of the lease.

The amount of the build-out for a new Kumon Center depends on many factors such as the age of the building, a landlord’s willingness to make a contribution (which may take the form of a tenant improvement allowance or free rent for some specified time) and real estate market conditions.

You also have the responsibility to ensure that the premises and signage, which must be approved by us, are zoned appropriately for the operation of a Kumon Center.

At no cost to you, prior to the opening of your Center, Kumon will select and have delivered to your Center the furniture and fixtures needed to open and initially operate your Center. The items that Kumon will provide will include what we deem to be a sufficient number of tables, stools, cabinets, shelves and chairs. We have the right to change the amount and type of furniture we deliver in our discretion. You may wish to purchase additional items of furniture and fixtures for your Center. These items will be at your expense. After your Center has commenced operation, we will not be responsible to replace any broken or obsolete item of furniture or fixture at your Center or to provide you with any additional furniture or fixtures you may need. Kumon will approve in advance and you will purchase the carpet and paint to be used at your Center meeting the specifications contained in the Operations Manual. Kumon will reimburse you for the initial cost of carpet and paint in amounts established by Kumon in its discretion from time to time.

Pursuant to Kumon’s Signage Policy contained in our Operations Manual, you shall be required to pay for one exterior sign for the facade of your commercial space. We must approve the content and location of the sign prior to installation. Upon installation, we shall reimburse you for the cost of fabrication and installation of the sign. You must transfer ownership of the sign to us when our relationship ends, and we will make arrangements for removal of the sign. You must reimburse us for the cost of sign removal. When affixing signage, the Kumon Logo (KUMON and the “Thinking Face” design) must be separated from all local center information (i.e., center name, phone number, hours of operation, and website address). You are free to use any vendor you select for exterior sign fabrication and installation (See Item 11 for further information regarding our signage program.).

You must obtain a notebook computer for use at your Kumon Center. Your computer must be at your center at all times when your center is open. Your notebook computer must have the minimum specifications set forth in our Operations Manual.

You must use our proprietary software, applicable to your center, which will assist in various aspects of operating your Kumon Center. (See Item 12, Notebook Computer and Software Programs).

This figure is the current annual rate if you purchase the package policy liability insurance that Kumon makes available through its insurance carrier, based on an assumed center enrollment of 100 math students. (See Items 7 and 9 for more information.) Many of our franchisees also obtain other types of insurance coverage for their centers such as property and casualty coverage, although we currently require only liability coverage. We estimate that the annual cost of property and casualty coverage would range from $1,000 to $2,500. We also strongly encourage you to purchase sexual misconduct liability insurance for you and your co-workers, as such coverage is not included in the insurance offered through Kumon. Almost every state requires you to purchase workers’ compensation insurance for the employees of your Center. Whether or not your state requires you to obtain workers’ compensation insurance, Kumon will require you to obtain and have proof that you have this type of insurance. You may have an obligation under state law to obtain other forms of insurance.

Your Kumon Center must utilize the Kumon Lead Management Tracking System. This system utilizes Voice-Over Internet telephone technology. To utilize this System, your center must have its own telephone number and dedicated Voice-Over Internet telephone line used exclusively for center business. You must purchase this System from our designated vendor. The cost for the purchase and installation of the System is currently $340. After installation, monthly expenses for use of the System are estimated by our vendor to be approximately $40 per month. The Voice-Over Internet telephone will include the software for the System. The System will automatically route parent telephone inquiries to our call center and provide us with access to your scheduling calendar. Our call center will schedule appointments for new parent orientations for you. Kumon earns no commission or any revenue from your purchase or use of the System. Upon expiration or termination of our relationship, you must cease using the System and the telephone number for your dedicated telephone and assign the number to Kumon.

You must purchase the books contained on the Kumon Recommended Reading List. The cost of these books will vary depending on the vendor you select. The Kumon Recommended Reading List consists of approximately 520 books in Levels 7AL, chosen with the purpose of enhancing the student’s joy of reading, to be assigned by the instructor for use at home as needed on an individual basis. We may add or delete books from the List at any time. If we add books to the List, you will be required to purchase them.

You must have your fingerprints taken on Form FD-258, the fingerprinting card used by the FBI, to conduct a criminal background check. If you are invited to our Instructor Development Program, Kumon will provide this form to you along with detailed procedures to properly fill the card out, take it to a local governmental agency to obtain your full set of fingerprints, and mail to the FBI to conduct the criminal background check. You must authorize the results of the background check to be mailed directly to Kumon. The fee to process the fingerprinting card is $18. Additional fees may apply at the local level to have your fingerprints taken. If we have not received the FBI background check prior to your scheduled attendance at our Instructor Development Program, we may reschedule your attendance until after we have received the background check.

Within the first 3 months your center is open (6 months if you take over operation of an existing Kumon Center), you must spend a minimum of $4,000 to promote, market and advertise your center. We will reimburse you 50% of the center promotion, advertising and marketing funds you spend and which we have pre-approved, in the first 3 months of the operation of your center up to the maximum amount set forth in our Operations Manual. Currently this reimbursement is up to $2,000.

You may need to hire assistants as the number of students enrolled at your center increases. You will determine when to hire assistants and the salary to pay them. Your payroll costs will depend on many factors such as the number of assistants you hire and the prevailing wage rate. This figure is an estimate and we cannot guarantee that you will not incur greater payroll expenses.