This week’s episode explores the world of education franchising and asks the question: does this industry really pay off?
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Summary
Childcare and tutoring are among the last things families cut when budgets tighten, and that resilience keeps education franchising on prospective owners’ radar. In this episode, Allison Dudas and Anneliese Brosch walk through FBR’s 2026 education sector report, drawn from more than 1,700 franchisees across 14 brands. They cover what it takes to get started, why finding the right center director often separates owners who scale from owners who bought themselves a job, how many hours the work demands, and what owners actually earn. Despite the long weeks, 86% say they enjoy the business, and this conversation explains why.
Resources
- FBR’s Education Sector Report
- Listen: An Inside Look at a Tutoring Franchise
- List: Top Education Franchises
- Listen: We Ask Franchisees If They’re Happy. Here’s How
- Read: Why Jobs in Supplemental Education Can Pay Off
- Read: How To Start a Tutoring Center: A Step-By-Step Guide
Transcript
Allison Dudas (00:51)
Welcome back to the podcast from A to Franchisee I’m Allison Dudas from the marketing department here at Franchise Business Review. Today I am joined by Anneliese Brosch. She is the head of our client success department here at FBR. And thanks so much for being here. Thank you. I’m excited to be here and talk about this. Yeah, so we are here to talk about the state of education franchising in 2026. We have a new sector report that you can download on our site, franchisebusinessreview.com.
If you go to the top menu where you see our sector reports or industry reports, you can download there. But the the education sector is really one of the more interesting ones, wouldn’t you say?
I’d say so, especially given the current economic climate and what we’re seeing with spending across the board. So yeah, for sure. Yeah, exactly. And I think it’s it’s great that you brought that up because education is one of those sectors that remains very consistent and high performing, even in an economic downturn. And that’s I mean, hey, we’re both parents, so we can speak to this firsthand. And that’s because you are still going to pay for your kids’ childcare when
There’s an economic downturn. You don’t you don’t have a choice, right?
Yeah. And I think also the childcare side of it as well as you know, if they’re they need extra tutoring or things like that, those will be the last things to be cut in your budget, mainly because you know that that’s something that your child you that your children need. Right, right. So really when we’re talking about the education sector, we’re talking about early education. So we’re talking about daycare centers and then we’re talking about tutoring franchises. So those are kind of the two sides this coin.
All right, so in this sector report, we have data from fourteen leading franchises. So that’s over seventeen hundred franchisees. And we ask every franchise brand, every s every franchisee from every franchise brand thirty-three benchmark questions. We do.
Yep. And that’s how we compare systems apples to apples is we ask them those benchmark questions. then what we end up doing is we factor in a few other things like a couple things from the FTD, participation rate, et cetera. And then that’s how we end up with our awards lists. But for the research perspective, we’ve got the thirty-three benchmark questions. Right, right. And if you want to learn more about our methodology, you can probably listen to almost any episode. But I’ll link the one where we very specifically go through
Through how we measure franchisee satisfaction. And we talk about franchisee satisfaction really as a way that we’re measuring the health of a franchise system. So if you are a prospective franchise buyer, you probably want to know if the system into which you’re buying is healthy. Do the franchisees trust the franchise or do they feel happy with the community? Do they feel heard? Do they feel supported? Do they get proper training? And so on. So those are the kinds of questions that we ask. And
For this sector, we’ve got 14 brands, over 1700 franchisees. That’s where these key findings are coming from. and again, we have sort of two sides to the coin. We’ve got the tutoring, sort of education, supplemental education, and then we have actual child care or daycare situations. One of the things that Allison and I were actually talking about before the podcast was sort of the demand for these services. obviously, working parents need the child care.
Of things, and certainly in an economic downturn, you’re not going to not send your kid to daycare because you need to go to work. However, I think on the tutoring side of things, our children are being tested a lot more than maybe they used to be, you know, when we were younger. Yeah. I feel like teachers, educators in general have a better pulse on where each student is. So if they do need supplemental help, that’s flagged really early. So that doesn’t seem like it’s gonna go away anytime soon. So have
Having
that extra help drive or the need for that extra help sort of drives up the demand for those tutoring services for sure. Yeah. and I have a couple friends who are educators and we you see that a lot. They’re they’re both in special ed and so they have a lot of children who need extra help in different ways and it’s it’s only growing. It’s only growing and actually the the so thinking about the private tutoring market, it’s it was valued at four point three billion in twenty twenty four.
Is expected to grow at an 11.1% CAGR from 2025 to 2030. And that’s in our report, it that’s in our report. so that’s crazy. I mean, that’s a tremendous growth projection there. So if if you’re looking for a lucrative market, I you’ve definitely found it. and then the childcare market is valued roughly at 65 billion in 2024, and it’s expected to approach 110 billion by 2033.
Wild. Yeah. Wild. so yeah, the growth drivers are working parents, family structure shifts, and
Especially when it comes to early education, I think the growing recognition of the value of early childhood education, I think there’s been there’s been a lot of data that’s come out more recently about how important those preschool years are. And I think parents are paying attention to that and realizing that when they invest financially in daycare, it’s an investment in the child’s future, not just potentially child care. so so pretty pretty strong market, pretty interesting market. I think it’s worth you know.
Know we talked about a lot of the the upsides, if you will, the demand, etc. But one of the things that was highlighted in the report that is definitely going to be a challenge and is really a challenge across the board for franchise brands, but is the staffing squeeze. you were mentioning, you know, some of the franchisees who have found sort of like the perfect person to be that center director. Yep, those are the franchisees who can then scale. but finding that person and finding the people to do
do
the actual work within the centers, et cetera, is is definitely gonna be a challenge, I think, across the board. Yeah. Here let’s let’s pa let’s pause on that. Let’s go to this first. And then ’cause this I feel like is a great conversation for us to have maybe as we talk about after investing. Okay.
Yeah, because it looks like you didn’t flip. no, here we go. No, this was the AI one. Okay, and then it goes. Okay, got it, got it. Okay. I know. All right, because this is this is really, really important. Okay. all right, the workforce scale in this industry is also really significant, which we’re gonna get to later. there are roughly six, almost seven hundred thousand childcare workers nationwide.
Plus hundreds of thousands of preschool teachers and center directors. the IFA, that’s the International Franchise Association, projects that roughly 845,000 franchise establishments nationwide in 2026 overall, and and generating more than $920 billion in economic output. So education franchises are.
Are very significant. All right. So let’s let’s talk for a moment about if if somebody’s interested in in investing in an education franchise, what does that mean? What’s that kind of what’s the entry level? what’s the cost? So on the low end, home-based and mobile concepts like in-home tutoring or STEM enrichment, etc.
that r or other ones that run inside existing schools can start well under a hundred thousand. so needing to have that. On the high end, we’ve got brands like Lightbridge Academy, which requires a $250,000 minimum cash investment, but total investment ranges a million dollars to seven million depending on your facility, depending on if you’re buying or if you’re leasing, all all kinds of factors that go into opening a place like that. Yes, it tends to
be one of our one of the more expensive sectors because you do need a brick and mortar you do need a build out and then of course you need insurance and so many more things so I’ve been thinking about I there there have been several conversations I’ve gotten to have with Mathnasium franchisees about the process of of building out and a lot of this depends too on whether or not as a a franchise owner if you own the building so what you’re rent is
Or if you have an opportunity to buy. So kind of think about all of that stuff. Like if you, if you’re looking to invest in a franchise that’s in the sector of education, think about your property is a major part of that. Is a major part of it for most of these franchise brands. It’s it’s a little bit like QSR in that way. restaurants. Yeah.
Yes, it it it it is. It definitely is. And you have less of you know, the supply chain issues, but you have the same sort of staffing issues, which we’ll get to in a minute. and then of course you have to think about insurance. let’s see.
Okay, so once you’ve got the capital, the next challenge is staffing, and this is where a lot of owners get surprised.
So once once somebody once somebody invests, once somebody finds the perfect location, does the build out, then of course you’ve got to find staff. And that’s kind of that that’s maybe the biggest thing to talk about in this sector is staffing.
Yeah. And Alison and I talked about this a little bit before we started the podcast here and she was mentioning she’d talked to a few folks in the sector and the the biggest key, if you will, to scaling is finding somebody who can be that centered director or that manager and build out the team from there. Those are the franchisees that can scale is when they can find those key people to run the day to day and do the actual work and be in the trenches. Those are the people who can then scale.
also the people who then can have a little bit more work-life balance because I think that that is something that factors very much into the staffing right is yeah talking about that yeah I agree so I’m thinking about if you are interested in the education sector I think hiring is gonna be your thing and I think you have to be a really good you have to be a really good spotter of talent and hiring the right people because you will do better financially
Financially, if you are able to scale. So if you owe if you’re able to open a few Ivy Kids, if you’re able to open a few magnasiums, if you’re able to open a few light bridges, that’s going to be where you see the biggest return on your investment. But you as a single human being, owner operator, aren’t going to be able to manage that without those people that you can really, really trust. So if you are thinking of investing in the education sector, have that in the back of your mind. Like, am I good at hiring? Is this something I have experience with? Or
Even better yet, do I have somebody in mind already who could run a center? Yes. And then also what’s specific to hiring here is you’re hiring somebody for their skill set, but you’re also hiring for the soft skills. You people are dropping their children off at this center for the day or for the hour or however long. so you you need somebody with competence, but you also need somebody who is potentially warm and and does well in front of parents and is feels trustworthy and all of
That
all of those more softer skills that are really hard to hire for it’s hard to know. It really, really is. And I think too of some of these tutoring franchises that hire, sometimes high school kids to help with their math tutoring or with the STEM support. And you so you have to be able to, if you’re if you’re a center director, you have to be able to both greet parents, assist with kids, and support your staff that might be kids themselves, that might be 70.
So holy moly, talk about soft skills. Those are a lot of soft skills that are needed. I sort of get excited about this. I used to teach high school, so I’m like, yeah, this is interesting. Like, what an interesting challenge. But if you’re listening to us talk about this and you’re like, you’re starting to like clam up and get sweaty, maybe the education sector is not right for you. Like maybe this is not
This is not for you, which is fair. and not to like not to like keep harping on it if it isn’t for you, but this is this is a an industry where people are working really hard, at least until they figure out how to scale. So, you know, you had mentioned a work-life balance on a lease and that the people who figure out how to scale have the best work-life balance. And we we have some data on that. Yeah. I mean, before we dive into the data quickly, the one thing that jumps out to me is I would think that you’re gonna
Example, somebody who has worked in this field might be attracted to this type of business. But what you really do need to ask yourself is are you able, will you be able to take extract yourself out of the day-to-day work and work on the business? We say it a million times, but work on the business instead of in the business. I think that can be really challenging for folks, especially folks who take a lot of pride in what they do, and it’s hard for them to quote unquote.
unquote
scale their way of doing things. Right. and so they can’t extract themselves out of the business. So that’s something to keep in mind too, that like if this is something for you
You probably can’t sit with every single child right and do it, and take care of every single child the exact way that you would do it. Right. You need to find a way to be able to do that for everybody and that’s with team and staff. Yeah, that’s a great point. That’s a great point. ‘Cause otherwise if you’re investing in a franchise and you’re not getting out of the day to day, you just bought yourself a job. Yeah. Yeah. Like yeah, it’s in a franchise that you own, but like you were not you’re not ever gonna have that higher level of
revenue or that scalability that really is what most people are looking for if they invest in a franchise. So that’s a great tip of tip right there on Elise. So yeah, so work-life balance. So of the franchisees that we surveyed, 49% of them clock 40 or more hours per week.
Oof. I know. I know. Yeah. So that’s that’s kind of interesting. you know, it’s but I think, you know, it
If you think about that number in relationship to say you opened your own system and you didn’t have all of the benefits of joining a franchise system, it would probably be more than that, right? Because you would be working on those things those 40 hours a week, and then you would turn around and be like, Okay, well, now I need to update my brand. Now I need to do all of the, you know, find a new payroll company. Now I need to do all of these mundane tasks that sort of the being a part of a franchise.
takes care of for you. Yes, yes, that’s such a great point. a little bit more data too to add to that. And forty percent of the franchisees that we surveyed say they don’t have work life balance, including four percent of them who say they’re workaholics by choice.
I that to me isn’t super surprising because I do think that part of this is mission based, right? Yeah. You are helping children. I th I would imagine that some of the folks or the majority of folks who really get into this, they believe that they’re making their communities a better place. and so because of that you are more motivated to work. Yeah. so that workaholics by choice, I I could I could see that. Yeah, I could see that too. I think of the teachers that I know. You mentioned
Teacher friends and and they’re pouring so much of themselves into their work. So if it’s your thing and you wanna grind away and you wanna give time to again something that feels like a mission, maybe maybe more more like a vocation than a job. Yeah, this this could be the sector for you. Well, especially if they’re like out in their communities and they are running into these families often, I think all of that adds to sort of the work that you’re doing, even if you’re not necessarily in the center.
Still working by talking to folks, building a network, drawing up business, all of that. Yeah, yeah. And I think it’s worth noting too that
lot of the stressors that a company owning your own a company owning your own business can be mitigated by the franchisee community. And a lot of these brands in this sector are rated high in community. So I wanna say
Of the data that we pulled, 86% of the franchisees in the education sector say their business coach is accessible and responsive. business coach is somebody who’s like assigned to you and probably other franchisees that are there basically like to support you, answer questions, connect you with the franchise or kind of just
Help you set up, help you open, all that kind of stuff. 84% say their business coach cares about their success. 81% of franchisees in the sector rate their system-wide communications above average, which is excellent. 81% rate operational systems above average.
And then going back to business coaching, 79% say their business coach understands their business and personal goals. that’s great. That’s music to our ears. Yeah, it’s actually really good data. So I and I think too, not just like your business coach, but you should think too about whether or not a community of fellow franchisees matters to you because that is something that the education sector has a lot of.
You think about it if you can if you own a like a a Safari kid and you know other franchisees in other territories that own a Safari Kid and you can call them and ask, hey, we’re having this issue, have you seen this before? Or we’re rolling out this new program, how did it go in your territory? And you can get support and bounce ideas off of other franchisees, and that’s invaluable. Yeah, it is, and something that you don’t
Definitely get joining a franchise versus having to navigate all of this yourself. Yeah. Yeah, definitely. And it’s that that that saying that’s very common in franchising, going into business for yourself, but not by yourself. Yeah. okay. So the hours can be long, like clearly. This whole section was about basically how hard these franchisees are working. but the question everybody wants answered, does it pay off?
So let’s get some income data. And I think that that’s where a lot of you listening probably really wanna hear. so fifty-five percent of education franchise owners surveyed report over five hundred thousand in annual sales revenue. I wanna quote make sure that we
stress that that is annual sales revenue. but that’s a that’s a good number. Yeah. Yeah. Yeah. And the average annual income reported by all education operators surveyed is eighty eight thousand dollars for businesses open at least two years. So in our data we o we often exclude businesses that are open for just less than two years because you’re just grinding. You’re just trying to get open and trying to break even. And and I think that that’s interesting. you know
I think there’s if you do sort of like the hours per
income for education operators, you’re like, they’re working a lot of hours and they’re they’re at this sort of 88,000. that is as they’re ramping up. So something to keep in mind. The other thing that that does I think tie into this is that 68% of these owners are single unit owners. So obviously if you’re we talked about being a multi-unit off own operator, excuse me, and scaling and that that’s where you’ll you’ll start to see those numbers.
Change so 32 percent earn less than 50,000 per year, 17 of percent of the top performers earn more than five hundred thousand per year. So there is a really big spread there. some of it comes down to business model, some of it comes down to what your costs are. So we talked about how like if you have a brick and mortar, you’re gonna have a lot more overhead and a lot more expenses that come with that. So yeah, I think
It it just depends on the model that you choose and how long you’ve been doing it and how well you can find people to do that work and how well you can establish yourself in your community and get your business up and running. Yeah. Yeah, I think such a great point. if you
are going in with really a business mindset instead of maybe a a teacher mindset, right? and you’re thinking of scaling, you are you have the potential to be really successful here. There’s a there’s a high ceiling, I guess. but there’s also a wide range.
Let’s see. Let’s go into a little bit more of the data. Like who are education franchisees? Because I think it’s kind of interesting. 39% of them are male. This is actually a female-dominated industry, which I kind of love that for us. 50% are female, and then 11% prefer not to say. and then I I another aspect I really like is the age piece.
Seventy percent are forty five or older for franchisees. thirty percent are under the age of forty five. Hmm. I know.
But what we hear time and time again, and if you’ve listened to this podcast for a while, we bring on franchisees to talk sometimes. And I think every single franchisee we talk to is always I wish I’d done it sooner. Mm-hmm. a lot of people invest in a franchise as a second career, particularly these education franchises, because maybe they were formerly in education and now they’re kind of looking for something else, or they’re formally in other other industries and they love children and want something that’s mission driven and purpose driven. I was gonna say
of the owner operator model of somebody who has been in education and maybe got burnt out by being in school systems. this might this might be attractive to them as an opportunity to kind of do it their own way with support. Yeah with support. And I think too it’s a great you know I I think if you’re young and you have energy and you can get the capital
Go for it. I don’t know. If if it’s appealing to you. If this work-life balance challenge and the the high investment is appealing to you just because of the potential and the mission-driven work, I’d say go for it. let’s see, in terms of just an education profile, 89% of these franchisees have their bachelor’s degree or higher.
it’s also a little bit more diverse than some other sectors. Thirty-three percent identify as minorities and five percent are veterans. Yeah, love that. Yeah, definitely. all right, and then you know, these business models are interesting because you you’re gonna have a mix of part-time and full time employees, you know, for a
tutoring franchise, you’re probably gonna have a lot of part time employees for a daycare franchise. You will probably have more full time employees, but maybe you’ll have some people who just work a couple days a week. so twenty percent of these franchisees in this education sector have ten or more full time employees. Sixty one percent have ten or more part time employees. Hmm. That speaks to the size of the businesses. Yeah, you know.
Interesting. Yeah, it is really interesting. well in general I think it’s a very fascinating sector. I think it’s a sector that you gotta work hard in. There’s a tremendous amount of potential. You’ve gotta have the right personality for it.
You gotta wanna be mission driven, but also be willing, I think, to get out of the weeds if you really want this to be something where you build a legacy, where you are building a business that is potentially going to build generational wealth for your family.
At the end of the day, what business don’t you have to work hard at for it to be successful? Seriously. Seriously. Yeah. Yeah. And at least you’re doing it for a good cause. At least you’re helping your community directly. I think there’s probably a lot of really I mean, you are a teacher, a lot of really cool
I don’t I forget the word I’m looking for, but seeing your work actually come to fruition and seeing these young folks who maybe struggled with certain things and then they blossom and bloom and you know, maybe they have language challenges and then next thing you know it, they’re getting their masters in English, you know, like that’s so cool. It’s very, very cool.
I think we’ll end here with just one last kind of chunk of data that we’ve got about education franchise owners. And it’s some really good data. So 86% of these franchisees say they enjoy the business. 84% rate local market competitiveness as above average.
82% enjoy being part of their franchise organization. Eight out of ten say franchisees are supportive of each other, so the community. And three out of four of them respect their franchisor. Pretty good. Pretty good. All things considered, considering how hard they work, 86% of them enjoying the business. I think that says a lot. That definitely says a lot. So we hope that.
This gave you a little snapshot into what this sector is like. I hope if you are still interested, you will download the education sector report on our website,
In the show notes, we’ll link to other episodes that have to deal with education franchises. So you can hear from franchisees and learn a little bit more about the sector. And then I’ll also link to our education, our top education franchises and other things. But yeah. Thanks so much, Anneliese. Thanks for having me. All right, tune in next time.
