Kumon Franchise Cost & Fees

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Description

Year Business Began: 1958Franchising Since: 1958U.S. Headquarters: Teaneck, New JerseyCountry of Origin: JapanEstimated Number of Units: 25,860Franchise Description: The franchisor, Kumon North America, Inc., is a wholly owned subsidiary of Kumon Institute of Education Company, Ltd., a Japanese corporation. Franchisees operate an after-school center that provides math and reading programs using the Kumon Method of learning. Children are given the opportunity to attend Kumon Centers twice each week throughout the year for approximately 20-30 minutes per subject and complete daily assignments at home on non-Center days. There are 20 math levels and 27 reading levels covering material ranging from pre-school to high school level.Training Overview: The franchisor will provide the Instructor Development Program. The program consists of two semesters with three courses in the first semester and two courses in the second semester. Franchisees must complete the first semester of Kumon’s Instructor Development Program to the franchisor’s satisfaction in order to be offered a franchise. Completion of the first semester of the Instructor Development Program includes training at the Kumon Regional Office for the region where the franchisee is located, in-center training at an existing Kumon Center designated by the franchisor, on-line training, homework assignments, study of the franchisor’s curriculum and Worksheets and two trips to Kumon University, Teaneck, New Jersey to attend the classroom portion of the training. The franchisor currently estimates that it will take approximately six months to complete the first semester. If franchisees successfully complete the first semester of the Instructor Development Program and are awarded a franchise, they must attend the second semester of the Program. The second semester requires travel to Kumon University, Teaneck, New Jersey following the opening of the Center for two additional courses. The franchisor has the right to require franchisees to attend supplemental training courses during the Program if it determines that the franchisee needs them. After completion of the Temporary License Period, franchisees must complete Ongoing Training, which continues for the term of the franchise. Ongoing Training includes Instructor Achievement Testing, attendance at Monthly Instructor Meetings and/or Online Training, other Professional Development activities and completion of additional classroom training, in accordance with the training schedule set forth in the Operations Manual.Territory Granted: Franchisees will not receive an exclusive territory within the Kumon franchise organization for the operation of the center(s). Franchisees may face competition from other franchisees, from centers owned by the franchisor, or from other channels of distribution or competitive brands controlled by the franchisor. Franchisees may operate their Center only at the location approved by Kumon and specified in their Franchise Agreement.Obligations and Restrictions: If franchisees are an individual, they must instruct the students personally. Franchisees must be at the center during all student sessions except in extraordinary circumstances of a personal nature. Franchisees must devote full-time to the operation of the Kumon franchise throughout the franchise relationship. If franchisees wish to form a corporation or limited liability company to operate the center, they must satisfy the corporation/LLC requirements stated in the Training Agreement and Franchise Agreement. The franchisor does not grant franchises to partnerships. Franchisees must ensure that their assistants are competent to perform the tasks assigned to them, are of good character, and are otherwise qualified to work with children. Franchisees may not permit activities at their Center other than those activities that the franchisor, in its discretion, deems related to the operation of a Kumon Math and Reading Center. Franchisees may offer only the Kumon Math and Reading programs, and only in accordance with the Kumon Method, using only Kumon Materials and the Operations Manual, Instruction Manual, Instruction Principles Series and other instructional materials in the center.Term of Agreement and Renewal: The length of the initial franchise term is 5 years. If franchisees are in good standing and have met the requirements for renewal, they can renew the franchise agreement for additional 5-year terms.Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee any promissory note, lease or other obligation franchisees may make to others. Investment Tables: Estimated Initial Investment Name of Fee Low High Training Agreement Deposit Fee $500 $500 Expenses While Start-up Training (Instructor Development Program) $4,860 $8,520 Initial Franchise Fee $1,000 less, the $500 Deposit Fee if franchisee is obtaining their first Kumon Center. Initial Purchase of Materials $1,000 $1,000 Architect Design $0 $9,500 Leasehold Improvements $29,500 $60,000 Security Deposit, If Required $0 $15,000 Rent $2,500 $5,000 Furniture, Equipment, Primary Sign & Supplies $3,400 $12,000 Notebook Computer at Kumon Center $400 $2,000 Professional Fees $1,000 $3,000 Liability Insurance $475 $475 Business License, Name Registration $100 $200 Kumon Lead Management Telephone System $480 $600 Recommended Reading List $2,550 $2,550 Fingerprinting, Criminal Background Check $18 $60 Payroll Cost for Assistants (3 Months) $6,300 $7,560 New Center Marketing $2,000 $2,000 Additional Funds (3 Months) $13,500 $18,000 Estimated Total $69,583 $148,965 Other Fees Type of Fee Amount Royalty Initial Enrollment Royalty Fee: For each reporting month, $15 times the number of newly enrolled students.Monthly Royalty During Temporary License Period (TLP): $36 times the number of full-payment students enrolled, and $18 times the number of partially exempt and/or prorated tuition students for each Subject-Franchise.Monthly Royalty after completing the TLP: $32 times the number of full-paying students enrolled, and $16 times the number of partially exempt and/or prorated tuition students for each Subject-Franchise.Franchisees must allow the franchisor to make monthly electronic debits to account equal to the amount owed. Administrative Fee for Late Payment 1.5% on the overdue amount each month or $75, whichever is higher. Late Report Fee for Late Submission of Student Reports, Applications, and Tests $200 per month for the first month the franchisee is late; $500 for the second month the franchisee is late; $1,000 the third month the franchisee is late with increments of $1,000 per month thereafter. Insufficient Funds $25 per EFT attempt that has insufficient funds to cover the amount owed. Insurance $4.32 per Math student per year. Indemnification Amount incurred by the franchisor. Shipping Costs for Materials Charged on per-order basis. Relocation Fee $1,000 Payments for “Chargeable Items” Purchased from Kumon As stated on invoice. Liquidated Damages — Termination by Franchisee Without Adequate Written Notice Three times the average monthly royalty in the three months immediately prior to franchisee’s last day of operating the Center. Temporary Transfer to Kumon 10% of the average tuition charged by the 5 Kumon Centers that are closest to the Center, multiplied by the number of students enrolled at the Center for so long as Kumon has assumed operation of the Center(s) and reimbursement of any out-of-pocket costs that it incurs. Advertising Contribution At least the minimun amount set forth in the Operations Manual. The above information has been compiled from the FDD of Kumon. Year of FDD: 2018Franchise Direct’s Disclaimer

Other Fees
Type of Fee Amount
Royalty

Initial Enrollment Royalty Fee: For each reporting month, $15 times the number of newly enrolled students.

Monthly Royalty During Temporary License Period (TLP): $36 times the number of full-payment students enrolled, and $18 times the number of partially exempt and/or prorated tuition students for each Subject-Franchise.

Monthly Royalty after completing the TLP: $32 times the number of full-paying students enrolled, and $16 times the number of partially exempt and/or prorated tuition students for each Subject-Franchise.

Franchisees must allow the franchisor to make monthly electronic debits to account equal to the amount owed.

Administrative Fee for Late Payment 1.5% on the overdue amount each month or $75, whichever is higher.
Late Report Fee for Late Submission of Student Reports, Applications, and Tests $200 per month for the first month the franchisee is late; $500 for the second month the franchisee is late; $1,000 the third month the franchisee is late with increments of $1,000 per month thereafter.
Insufficient Funds $25 per EFT attempt that has insufficient funds to cover the amount owed.
Insurance $4.32 per Math student per year.
Indemnification Amount incurred by the franchisor.
Shipping Costs for Materials Charged on per-order basis.
Relocation Fee $1,000
Payments for “Chargeable Items” Purchased from Kumon As stated on invoice.
Liquidated Damages — Termination by Franchisee Without Adequate Written Notice Three times the average monthly royalty in the three months immediately prior to franchisee’s last day of operating the Center.
Temporary Transfer to Kumon 10% of the average tuition charged by the 5 Kumon Centers that are closest to the Center, multiplied by the number of students enrolled at the Center for so long as Kumon has assumed operation of the Center(s) and reimbursement of any out-of-pocket costs that it incurs.
Advertising Contribution At least the minimun amount set forth in the Operations Manual.