Sylvan Learning Vice President of Finance, Jacob Jones, gave 1851franchise.com the scoop on the costs associated with opening a franchised center and what sets Sylvan apart from the tutoring industry competition - both for franchisees and for customers.
“What sets Sylvan apart is the variety and flexibility we offer to prospective franchisees,” he said. “As a Sylvan franchise, you can offer reading, writing, math, study skills, and more. You have STEM products called Sylvan EDGE. You can do robotics. You can do engineering. You have college test prep for the SAT and ACT. You don’t get all of those programs from our competitors. You can be the one-stop educational resource for any student, whether they need tutoring or enrichment.”
The start-up costs for a Sylvan location range from $68,680 to $159,085, which includes the initial franchise fee of $24,000. Potential franchisees must have a minimum liquidity of $75,000 and a minimum net worth of $150,000.
There are two main factors that affect the start-up cost of a Sylvan location. One is the type of license the franchisee purchases. There are three different licenses to choose from: a Core License, which is the main Sylvan product offerings including a protected territory; a STEM “Edge” License that includes Coding, Robotics, Engineering, Science and Math; and an “Ace it!” License, providing franchisees with the tools they need to offer institutional or contract services to local schools.
The other factor is the overall build-out cost. Jones noted the franchise location can have a direct impact on building costs. “The regions can definitely affect this range,” Jones said. “Sometimes it’s a bit easier to build out locations in Middle America-type areas, but if you build out a center in New York or California, those can be more expensive. Luckily, Sylvan Learning can offer support to all franchisees in securing their real estate options.”
William Ramos da Silva is a Sylvan franchisee in the Orlando, Florida area. He opened his first Sylvan center in Ocoee, Florida in November of 2017, and he opened a second center within a year in October of 2018 in Winter Park, Florida.
He first learned about Sylvan through an experienced Sylvan franchisee that he knew.
“I went to Sylvan’s Discovery Day to learn more about opening a Sylvan center of my own, and for me, it was love at first sight,” Silva said. “I love the franchise, the methodology, the way Sylvan works.”
Silva is a franchisee with a different brand in his native Brazil, where he owns four locations. As a franchising veteran, he knows that the first year of owning a franchise can be challenging, but he lauded the Sylvan corporate team for their support. He said he is learning every day.
“The corporate team is another reason I decided to become a Sylvan franchisee,” he said. “The team is great. They watch you. They follow up with you. They help you. It’s incredible support.”
Silva is thrilled with his experience and has plans for further expansion.
“I’m very happy to be a Sylvan franchisee, and my goal is to have five centers in Orlando and be the largest franchisee in the Orlando area,” he said.
Sylvan Learning offers both new territories and resale opportunities in domestic markets, as well as international franchising options. New territories are available across the United States and Canada. Franchisees will receive a protected territory with geographic rights to the Sylvan system in a clearly-defined area.
Jones pointed to the Sylvan all-in franchise fee of $24,000, which is cheaper than the company’s competitors. The brand also offers new territory financing options for franchisees, as well as a franchise fee discount for veterans.
“We can lend up to $100,000 to get your Sylvan Center up and running, plus five percent financing, which is better than our competitors,” Jones said.
This allows franchisees to stay focused on marketing and growing their business “so we’re not taking working capital away,” Jones said. For this particular program, Jones also noted that there are no payments for the first 12 months, and the following six months after that are interest only.
In terms of royalty fees, Sylvan collects 16 percent of monthly gross revenues, which includes royalty, technology fees, testing fees and national marketing. By bundling all the monthly fees, Sylvan Learning enables franchisees to pay a variable rate based on actual revenue received.
“It’s the most competitive royalty fee structure in the industry,” Jones said.
Jones believes that Sylvan franchisees will have an experience unlike any other in education.
“Our franchisees make a difference in their community every day,” he said. “We offer advancement and enrichment for our students, and we’re really focused on making our customer experience 100 percent great. At the corporate level, we’re focused on making sure our current and future franchisees are set up for growth.”