While 2023’s soaring inflation cooled some economic markets, franchise opportunities in the private education sector remained red-hot. Looking ahead to 2024, Kumon plans to use that momentum to continue thriving.
Initial economic forecasts from the Royal Bank of Canada heading into 2023 looked grim with the prediction of a moderate, short-lived recession marked by high inflation, historic labour shortages and rising interest rates. But those predictions never fully materialized, and the economy grew. During that time, Kumon's growth followed that of the projections for the education franchise and tutoring industry, where demand remains strong.
“While we were positive about how things were going, we entered 2023 with a lot of question marks about how the economy would perform and how that could impact Kumon,” says John Collins, Kumon North America’s vice president for centre development. “We were coming off a record-setting year and had a lot of momentum going that has continued throughout 2023. We can’t wait to see what 2024 brings.”
So, what’s driving that growth? A study by the journal Nature Human Behavior reported students around the world lost about one-third of a year’s worth of knowledge and skills due to the pandemic. Canadian student test scored also showed significant declines in student math and reading scores. It’s a gap that is growing and the public school system is unable to make it up on its own.
So, parents have stepped up and turned their attention to the private education market to provide individualized educational services like enrichment, tutoring and test prep that public schools can’t offer. For the last several years, Kumon has experienced record-setting enrollments of new students to the program. The demand for services isn’t limited to North America alone. Globally, the market for private tutoring is projected to reach $290.8 billion by 2030, up from about $146 billion in 2022. That represents a 9% compound annual growth rate, according to a recently released report, Private Tutoring – Global Strategic Business Report.
The U.S. market was estimated at $26.1 billion in 2022 and is expected to grow by 11.6% to $89.2 billion by 2030. In Canada, the market is forecast to grow at 7.1% over the same period.
“We know the need is there and we want to be able to meet the demand of parents seeking our educational services to help their children,” Collins adds.
The increased demand last year didn’t come from new learning centres alone, and the competition for commercial space presented challenges for some owners, as buildout times increased, and a shortage of space persisted in the hottest markets.
To answer that demand, Kumon modified its structure to allow its new Instructors to offer online instruction and temporary alternate locations to meet their local demand, provided they had received the necessary instruction first.
“What we’ve seen happening in the commercial real estate market is beyond our control, and we saw that hurting the expectations of our new owners,” says Collins. “To add to that, we also saw slowdowns in buildout and in permit approvals, which was no fault of the Instructors. So, we had to modify our plans and develop ways they could open before their physical centre was ready.”
That meant some Instructors were able to work from alternative locations and offer online instruction before their centres were provided with a certificate of occupancy.
If you’ve been dreaming about owning your own franchise, Kumon is one of the most affordable investments you can make in 2024.
Kumon’s startup costs range from $64,458 to $139,890, depending on location, and that includes the $2,000 franchise fee. In Canada, Kumon offers up to $31,600 in incentives to cover some of the costs for a new Kumon Centre, including signage, furniture, carpet and more, as well as $2,000 for new centre marketing.
The quality is unmatched. For 22 consecutive years, Kumon has topped Entrepreneur magazine’s education category, and for the past three years, Kumon has ranked 6th overall on the prestigious Franchise 500. Last year it was also named to the magazine’s Hall of Fame listing.
With Kumon, you’re not left to figure out your business and teaching methods.
The company offers extensive training that can develop your instruction ability and business acumen. If you have an entrepreneurial spirit and the desire to make a difference in the educational career of a student, Kumon can teach you how – and it has an accomplished team to help.
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