Sylvan Learning Plans MN Expansion, Seeks Franchisees
Tutoring provider Sylvan Learning is planning to expand in Minnesota and is seeking local entrepreneurs to own new and existing franchised centers throughout the state.
Baltimore, Maryland-based Sylvan currently has almost 800 learning centers throughout North America, and it plans to sell its six corporate-owned locations in Minnesota by the end of the year and also hopes to add an additional 11 in the state over the next two or three years.
According to Scott Hurlock, vice president of franchise development, Sylvan currently has five corporate markets in which it tests new tutoring strategies at corporate-run Sylvan centers—Los Angeles, the Twin Cities, Miami, Boston, and Baltimore.
However, Hurlock said the company has decided it only needs to maintain its corporate presence in Los Angeles and Baltimore—where its corporate headquarters is located. Therefore, it is selling all its corporate-run locations in the other three markets to franchisees—which includes six in the Twin Cities and five each in Miami and Boston.
“Two people have already expressed extreme interest in buying locations in the Twin Cities and are already on the road to a formal offer,” Hurlock told Twin Cities Business.
The six centers for sale, which are already up and running, are in Edina, Coon Rapids, Burnsville, Woodbury, Roseville, and Maple Grove. In addition to those six, Hurlock said Sylvan identified 11 additional Minnesota new franchise locations that are expected to be built within three years.
“Supplemental education services have never been more in demand,” Hurlock said in a statement. He cited school budget cuts, larger class sizes, and increased competition to get into colleges of choice, as drivers of that demand.
Each Sylvan center consists of a minimum of two full-time employees and an average of three to seven part-time tutors, said Hurlock.
The initial franchise fee is $48,000 with an 8 percent royalty fee. Sylvan also requires its franchisees to have a minimum of $75,000 cash available and a net worth of $250,000. The company said it is seeking both single- and multi-unit operators.
The company has opened 37 new franchise locations so far this year. “Our goal is for 200 new brick-and-mortar locations over the next four years, with 40 or 50 opening per year,” said Hurlock.
While the company is growing quickly, many of its centers throughout the country have also reportedly closed down over the last several years, including two in Minnesota—in Albertville and Mankato.
There was some controversy at the time of the Albertville closure in 2011 because some of its clients reportedly lost money that they had paid up-front before the closure. Hurlock, however, assured that if a location were to shut down, clients would have the option of transitioning to a different Sylvan center nearby or moving to Sylvan’s online education. “They wouldn’t lose a dime,” he added.
While Hurlock did not disclose Sylvan’s revenue, he said it has either maintained or dropped off a bit in recent years. He cited the ending of “No Child Left Behind” legislation as a complication for the tutoring industry as a whole.
“When that initiative ended, the industry had to shift from getting federal contracts to state contracts so a lot of franchisees are now scrambling to establish state relationships.”