What Do Education Franchises Look For in a Market?

Perhaps it’s no surprise that education franchise brands remained strong in 2020. As parents grapple with a new normal of working from home while simultaneously assisting children with online learning, the need for extra little educational assistance has never been greater.  

That need is likely to linger even after children return to the classroom. According to a widely cited study from consulting group McKinsey & Company, COVID-19 distance education created learning gaps in math as high as nine months for some children, but often greater for minority students who were twice as likely to not have video access to teachers during at-home learning sessions.

While there is a strong and pervasive need for supplemental education, the question for education franchisees is how to identify the best geographical regions for growth.

Population Density, Commuter Friendliness and Similar Demographics

Education brands consider several factors when seeking to expand. 

For instance, New Jersey-based early education and child care center Lightbridge Academy*® has more than 120 centers either open, under construction or in development in markets across the U.S. and plans to expand to 150 centers by 2026.

While the brand already has established a stronghold on the East Coast, it’s expanding its presence in places like Florida, Tennessee and Texas, as well as Virginia, Maryland, Pennsylvania, New York and New Jersey. 

When creating a growth strategy, the brand’s development team looks at factors such as population density, commuter friendliness and the number of families with working parents with similar profiles to the ones they currently serve.

Ultimately, brands like Lightbridge Academy® seek to make it as easy as possible for the greatest number of families to access their locations. 

Not All Education Franchises Are Alike

Susan Wolford, a member of the Lightbridge Board of Directors who has 40 years experience as an investment banker, including 22 years advising education companies, says it’s important to remember that education franchises come in many forms, from early childhood education to coding camps to tutoring programs. That means the markets they want to enter may not be the same, either.

Ultimately, it comes down to matching the demographics of the market with who you are trying to reach.

“Matching your segment with a geographic area where the target market lives is probably the most critical thing,” she said. “Matching up the socio-economic level is also critical. If you're a high-end provider, you need to be in an area that can afford to pay. On the other hand, if you are providing services that are value-driven, you probably want to be in neighborhoods that reflect that.” 

The Ability to Scale, But With On-the-Ground Knowledge

The Learning Experience is a nearly 300-unit-strong education franchise with locations across the U.S. and U.K. Anne Ewing, the brand’s senior vice president of center development, believes the performance of those existing centers provides a good starting point for finding your next market.  

“The performance of our current portfolio of centers enables us to target key areas with similar demographics and psychographics to determine new areas of exploration,” she said.

Ewings said that the company also has established relationships with developers, who understand their brand and can help prove opportunities for growth. 

Additionally, the brand's market research includes purchasing analytic information from third parties. But ultimately, it comes down to on-the-ground intelligence about a place, including local franchisee’s knowledge and experience, and looking at the competition. “If the revenue and cost stream meet our financial model metrics, we move forward,” she said.