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 Do you make $$ Education Franchise Business?

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TScaptivesim
post Mar 12 2019, 10:27 AM, updated 6y ago

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5 years of Franchise fee + New Center setup + Royalty + Materials + Expenses (rental , gaji, utility etc) = Rm 50K + RM 50k + Rm 75k + rm 75k + Rm 360k = Rm 610k

Based on currently student per center average 5 years = min 80 students x Rm 200 monthly fee x 60 months = Rm 960k

Nett for 5 years= 350k
Monthly Nett = 5.8k

If continue next 5 years business pay Renewal Fee + royalty + expenses= Rm 480k
Monthly Nett = 8k

Just based on this and not other external factors, Is this a good deal and ROI?

This post has been edited by captivesim: Mar 12 2019, 10:29 AM
MUM
post Mar 12 2019, 10:33 AM

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may I suggest you go to visits the tuition center nears your place to see the number of students enrolled in there to see if there is min 80 students?
usually the existing students from other tuition center will not shift to a new centers.

that means your new center will have to start from 0~10 students for some period of time before news of "miracles" that your center can do spreads
TScaptivesim
post Mar 12 2019, 10:42 AM

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QUOTE(MUM @ Mar 12 2019, 10:33 AM)
may I suggest you go to visits the tuition center nears your place to see the number of students enrolled in there to see if there is min 80 students?
usually the existing students from other tuition center will not shift to a new centers.

that means your new center will have to start from 0~10 students for some period of time before news of "miracles" that your center can do spreads
*
Oops forgot to mention its an enrichment center. Now only available in Klang Valley but none of such programme in my hometown yet.

Yes start from zero but already average up to 80 students as mentioned.

This post has been edited by captivesim: Mar 12 2019, 10:43 AM
MUM
post Mar 12 2019, 10:44 AM

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QUOTE(captivesim @ Mar 12 2019, 10:42 AM)
Oops forgot to mention its an enrichment center. Now only available in Klang Valley but none of such programme in my hometown yet.

Yes start from zero but already average up to 80 students as mentioned.
*
what is the average operating cost per month?

how many months of $$ back up do you have?

your hometown don't have...thus you will have to spend a longer time at 0~10 students until you can convince the hometown people to come

This post has been edited by MUM: Mar 12 2019, 10:45 AM
TScaptivesim
post Mar 12 2019, 10:54 AM

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QUOTE(MUM @ Mar 12 2019, 10:44 AM)
what is the average operating cost per month?

how many months of $$ back up do you have?

your hometown don't have...thus you will have to spend a longer time at 0~10 students until you can convince the hometown people to come
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Yes, tq for your feedback.

already calculated in the operating cost

just ignore the backup as already factor in

not to worry about the programme , it can sell itself plus its a business, anyway need to work hard and smart.
MUM
post Mar 12 2019, 10:58 AM

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QUOTE(captivesim @ Mar 12 2019, 10:54 AM)
Yes, tq for your feedback.

already calculated in the operating cost

just ignore the backup as already factor in

not to worry about the programme , it can sell itself plus its a business, anyway need to work hard and smart.
*
thumbup.gif I guess, with that the answers to this post below is obvious right?

QUOTE(captivesim @ Mar 12 2019, 10:27 AM)
5 years of Franchise fee + New Center setup + Royalty + Materials + Expenses (rental , gaji, utility etc)  = Rm 50K + RM 50k + Rm 75k + rm 75k + Rm 360k = Rm 610k

Based on currently student per center average  5 years = min 80 students x Rm 200 monthly fee x 60 months = Rm 960k

Nett for 5 years= 350k
Monthly Nett = 5.8k

If continue next 5 years business pay Renewal Fee + royalty + expenses= Rm 480k
Monthly Nett = 8k

Just based on this and not other external factors, Is this a good deal and ROI?
*
thumbup.gif you already know or think you know what you gonna do and have plans for it already.....
thumbup.gif
TScaptivesim
post Mar 12 2019, 11:20 AM

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QUOTE(MUM @ Mar 12 2019, 10:58 AM)
thumbup.gif  I guess, with that the answers to this post below is obvious right?
thumbup.gif you already know or think you know what you gonna do and have plans for it already.....
thumbup.gif
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Yes exactly.

I want to know if anything i left out or someone who has experience can give some input.

anyway, thanks for value addded.
SUSlowya
post Mar 12 2019, 12:33 PM

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QUOTE(captivesim @ Mar 12 2019, 10:42 AM)
Oops forgot to mention its an enrichment center. Now only available in Klang Valley but none of such programme in my hometown yet.

Yes start from zero but already average up to 80 students as mentioned.
*
how difference is the enrichment center compared to other tuition centers?

if u want to be prime movers, be ready for huge marketing/conversion cost.
NightHeart
post Mar 12 2019, 03:29 PM

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QUOTE(captivesim @ Mar 12 2019, 10:27 AM)
5 years of Franchise fee + New Center setup + Royalty + Materials + Expenses (rental , gaji, utility etc)  = Rm 50K + RM 50k + Rm 75k + rm 75k + Rm 360k = Rm 610k

Based on currently student per center average  5 years = min 80 students x Rm 200 monthly fee x 60 months = Rm 960k

Nett for 5 years= 350k
Monthly Nett = 5.8k

If continue next 5 years business pay Renewal Fee + royalty + expenses= Rm 480k
Monthly Nett = 8k

Just based on this and not other external factors, Is this a good deal and ROI?
*
You're calculating based on 80 students for the entire 60 months?

You also shouldn't assume the cost will remain the same throughout the 60 months. It's good to do some projections but 60 months ahead on these highly variable factors is kinda risky. A lot of things can happen in 60 months.


TScaptivesim
post Mar 12 2019, 07:57 PM

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QUOTE(NightHeart @ Mar 12 2019, 03:29 PM)
You're calculating based on 80 students for the entire 60 months?

You also shouldn't assume the cost will remain the same throughout the 60 months. It's good to do some projections but 60 months ahead on these highly variable factors is kinda risky. A lot of things can happen in 60 months.
*
Hmmm...I understand the cost should not be the same so i already average it up to make things easier to understand.

its averaged already for 80 students monthly.

Yes, a lot of things can happen but 5 years is the term of the franchise contract, subject to renewal.
MUM
post Mar 12 2019, 09:03 PM

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using this for revenue calculation....."its averaged already for 80 students monthly."

This post has been edited by MUM: Mar 12 2019, 09:20 PM


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aspartame
post Mar 12 2019, 10:24 PM

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QUOTE(captivesim @ Mar 12 2019, 10:27 AM)
5 years of Franchise fee + New Center setup + Royalty + Materials + Expenses (rental , gaji, utility etc)  = Rm 50K + RM 50k + Rm 75k + rm 75k + Rm 360k = Rm 610k

Based on currently student per center average  5 years = min 80 students x Rm 200 monthly fee x 60 months = Rm 960k

Nett for 5 years= 350k
Monthly Nett = 5.8k

If continue next 5 years business pay Renewal Fee + royalty + expenses= Rm 480k
Monthly Nett = 8k

Just based on this and not other external factors, Is this a good deal and ROI?
*
Have u factored in your salary? If not, 5.8k is your
"Salary"... u gain nothing ... even if yes, this calculation leaves too much variables I think ... real demand can be way below or above the estimate ...

If 80 students is considered good demand, forget it lo

peterpan888
post Mar 12 2019, 10:31 PM

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QUOTE(aspartame @ Mar 12 2019, 10:24 PM)
Have u factored in your salary? If not, 5.8k is your
"Salary"... u gain nothing ... even if yes, this calculation leaves too much variables I think ... real demand can be way below or above the estimate ...

If 80 students is considered good demand, forget it lo
*
Sounds high risk..better so a survey first at your hometown..how many student willing to pay to join.
saintmikal
post Mar 13 2019, 12:32 PM

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Your upfront operations fee of RM 610k is from your own pocket? (Meaning do yo already have this money or you need to borrow it?)

Imagine if you put RM 610k in Bank Rakyat for 60 months FD at 4.6% (pls refer to FD rate thread), without any headache, you will earn RM 154k in those 5 years. So the total gain will be RM 764k (vs RM 910k). Is it worth the risk for so little additional guaranteed gains? Not to mention the potential for capital loss and operational losses.

This post has been edited by saintmikal: Mar 13 2019, 12:34 PM
NightHeart
post Mar 13 2019, 12:55 PM

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QUOTE(captivesim @ Mar 12 2019, 07:57 PM)
Hmmm...I understand the cost should not be the same so i already average it up to make things easier to understand.

its averaged already for 80 students monthly.

Yes, a lot of things can happen but 5 years is the term of the franchise contract, subject to renewal.
*
The fact that you've "already average it up to make things easier to understand" shows that you've made projections or estimations or guessing work.

Now, you wanted to know "anything i left out or someone who has experience can give some input". So, some people here already highlighted that you're missing practicality & reality checks in your estimations. Missing those 2 factors kinda throws off your estimation easily or makes it really weak with nothing solid to back it up.

You're opening an enrichment center in your hometown, there's no such thing there as you said. Hence there's no clue to the market demand. For all you know, you may end up with 0~10 students for the entire 60 months. Then to save your situation, you may want to spend A LOT on marketing your center. That's 1 example how your estimation of revenue & cost could go off almost instantly, especially when you didn't budget for marketing.

Lastly, new businesses isn't as straight forward as the calculations you made in the 1st post. Your calculations may be more practical if you're buying off an existing business with track records already. With proven track records as a basis of calculation, at least those estimations are more plausible.

 

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