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According to reports by brokerage firm CLSA Asia-Pacific Markets, the preschool industry in the country is currently estimated to gross about Rs 4,004 crore ($985 million). The report also indicated that the largest chain of preschools in India comprises of just 550 schools, less than 4% of the total market potential of 15,000 preschools.
This is primarily because most preschools in India fall in the unorganized sector. “The business of running preschools has tremendous potential in India as it is still highly unorganized and often lacks a standardized curriculum, infrastructure and quality. Given that it is lucrative, and there is still a quality gap, there is scope for several organized players to get into this business.”
According to a study “Driving this growth are several social factors, like the increasing number of double income nuclear families who desire to enroll their kids in the best of schools and fear losing out on the rat race.”
Educational franchisees are becoming lucrative these days because of the high demand for quality education. Particularly in India, education is a growing sector and offers prospective business opportunities for those who want to enter the business world. India has the world's largest youth population that is in need of quality education with job oriented training systems. This allows new educational concept to enter the Indian market and become popular through franchising. When any education franchise is started for the first time, it takes some time to establish its brand name. Once the name gets popular, it becomes quite easier to set franchises with the same name in and around different parts of the state or the nation.
Preschool is often a child's introduction to the world of public or private education, and as such the preschool educator and facility play a special role in the child's future. Children's franchises that offer this type of early education can often set the stage for a child's love of learning, so for those interested in owning a franchise that provides both financial benefits and a deeply fulfilling career, preschools are an ideal choice.
Did you know that around 50% of a person’s ability to learn is developed in the first four years of their lives?
“This is a critical period in a child’s life when specific types of learning take place. The brain is especially receptive to stimulation in the area of language, for example, during the first three years. Therefore, children that are exposed to speech (talking, reading, singing, etc) on a regular basis, exhibit language skills that far exceed those with little verbal stimulation.”
For the new venture capitalists who are looking forward to educational sector, the concept of pre school franchise or play school franchise has become an appealing overture. Even though at the beginning, opening a preschool seems a pretty tedious task but with the advent of quite a few new preschool franchising models, it has become a lot easier. Quality preschools are restricted to limited urban localities and some of them are without any franchise model. This provides ample opportunities for new schools to convert themselves into franchise models and new entrepreneurs to take up a pre school franchise model.
The business is said to be low on investment and high on returns, with a break-even period within the first two years of operations. “If one plans to use the franchising model only, the investments are lower, since you only need to spend on curriculum development, nationalized marketing and teacher training. Starting your own school, however, is more capital intensive, since the cost of property refurbishment, toys and other equipment is high. Excluding brand building costs, we can safely assume around Rs 15 to 20 lacs per school”.
Like many existing preschools in the organized sector, you can also adopt the franchising model to achieve rapid growth. Also, as more and more parents are on transferable jobs, this would ensure that the child just has to shift to another branch of the preschool, rather than leaving it.
“Franchises enable not only sharing of expenses, but also knowledge, experience, brand image, as well as technical expertise.”
While on the lookout for franchisees, most preschools have a minimum land requirement of around 1000 square feet and a franchisee fee of anywhere around Rs 4 to 40 lacs, depending on the location. The royalty fees, which is on the total fee generated by the school in a year, can range anywhere between 15% and 30%.
Generally, the parents send their kids to the nearby play school as early as three years. As per an estimate, this unorganized sector comprising of neighborhood preschools captures almost 75 % of the total market share. It is observed that the parents are more inclined towards a branded play school for their child which is one of the major reasons for the rise in number of Play School franchise in India. They prefer to have their kids go to a school which provide them many co-curricular activities along with normal studies. With the increasing number of people in the middle and the upper-middle class in the Indian society, the consciousness for better educational facilities has also improved.
You'll find there are opportunities that range from owning the children's franchise while hiring the right people to provide the care and education, to providing age-appropriate computer education as an instructor who travels from preschool to preschool. While those interested in children's franchises should universally share the ability and desire to work with children, those considering preschool business opportunities should be uniquely prepared to take on this important position.
There are several advantages of an education franchise business in India. The best factor of investing in a schooling franchise is that you will be able to work on a business which is always in demand with India being the second most populous country in the world. There is always huge demand for quality educational institutions with the government’s efforts not being enough. It is also easier to market about any kind of education franchise. People can instantly recognize a new education franchise business model as there are already quite a number of successful players. It is also observed that an educational franchise business has a better ROI in the long run in comparison to any other type of business model.
Furthermore, the lack of government spending in preschool education in our country has provided ample business opportunities to private organizations to enter into this sector. The situation has improved a lot with the appearance of so many different companies in the pre school franchise sector. In India, the franchise model has contributed a lot towards the growth and development of the education sector.
To enter into a play school franchise seems to be the wisest business decision because the demand for playschools will always be there. Growing middle class population, increasing income of the people and the growing number of working women, the education sector is booming like never before.