How to Start a Tutoring Club Franchise: An Interview with the Founder

This article is based on its 2020 FDD. Keep reading or watch the  video originally recorded on Vetted Biz Youtube Channel

I have on three of the owners today, including Dan Pinkney, who is currently working as the COO. He worked for his uncle who was the founder who founded the company 29 years back. That’s how he got in the Tutoring Club franchise system. And, he’s also an owner of multiple franchise locations. And he met Dave, who is now the current President, 16 years ago.

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We’re going to also have on Liam Powers, who was a former student of Tutoring Club before he entered the management team and also became a co-owner of the business. Tutoring Club didn’t work out for him. He ended up going to USC. Dave was joking earlier on that he didn’t choose the right school.

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Tutoring Club History

Patrick: Today, I’m excited to have three of the owners of Tutoring Club, an established education franchise. It’s been around for the last 29 years. It’s based out in Nevada and California, and they’re expanding throughout the United States.

They’ve already had locations throughout the West Coast as well as the East Coast. They’re very excited to expand in states like Minnesota, Texas, Arizona, Florida, the Carolinas, and the investment amount starts at $66,000.

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We’ve now opened that up with Vetted Biz for Americans that just want to invest in a franchise and want to compare different franchise options or compare different businesses for sale as well.

We have an expanding portfolio of businesses for sale at Vetted Biz and franchise resales. And we have over 1,800 franchises where we go through a lot of the key information in terms of how much it costs to start the franchise if they disclose their financials through item 19. Like, how many units have opened and closed over the last three years? When the company was founded? A lot of key information that you need to consider before investing in a franchise.

Tutoring Club Franchisor Interview

Patrick: We have Liam Powers, who’s the CCO and co-owner of the Tutoring Club. We also have Dan Pinkney, who is the Chief Operating Officer and has been with the brand for 16 years now. And then we have Dave Hill, who was a multi-unit franchisee of Tutoring Club and is now the President of Tutoring Club. So we’re very excited to have them on.

Liam: Thank you for the warm welcome, Patrick. Excited to be able to connect with you, whether you’re on LinkedIn, YouTube, Facebook Live, or other platforms. I think the biggest thing that we’re looking for is individuals who are passionate about changing their communities for the better. And all the while being able to make a steady profit and have a business that’s very successful all along the way.

Business Opportunity in Education Industry

Liam: This is a great opportunity to be able to connect with people who are interested in the education space. Especially at this point, where the demand for supplemental education services has exploded. We feel very strongly about where we were positioned preceding everything going on with COVID.

But now that this has taken hold of virtually all aspects of life, seeing what that’s done to the education industry, how schools have attempted to pivot. And seeing how parents and clients prospectively are reacting to that makes us very excited about the future and the role that we can serve in our communities.

So, Patrick, thank you very much for this.

So the very first thing that we want to speak to everybody about is just kind of the space we’re in. Many of you who are interested in franchising, may have looked in other industries, or perhaps you’re keenly set in on the education industry. In which case, that’s wonderful. But for those who aren’t necessarily and are exploring multiple options and multiple industries, we just want to talk about the education space.

Education Industry Size & Market

Between $5 billion and $7 billion a year in the supplemental education market. We see nothing but explosive growth from there.

The demand for services like ours, where we help students lay the groundwork to become a student in the public or private education space is growing.

We are seen as a necessity rather than an option. Most of the areas where we like to open our centers are community-centered, they’re family-friendly, there are a lot of young families.

And we’ve always been perceived by a large part of the population as a necessity to be able to compete at a high level, to be able to go to some of these wonderful universities when their students are seniors in high school.

That’s something that now for people who are on the sidelines and thought, “Well, tutoring maybe is only for students who are struggling, or who are in the middle, or who are preparing for the SAT or the ACT.” That’s no longer the prevailing view, and that’s something we’re trying to capitalize on.

We’ve always been here, but to be able to engage with a broader segment of the population that we didn’t have before is very exciting for us.

One thing we want to talk to you about is how the Tutor Club model works. Why are customers, or in this case, parents, going to choose us? And that’s for multiple reasons.

Making a Difference

Liam: The main reason they choose us is the fact that we tutor almost every subject. Many of the other competitors in education choose to focus on a particular subject or a small segment of the population, whether it’s young people or college applicants specializing in SAT and ACT preparation. Many of our competitor’s segments do not.

And it sounds funny to say, but this is our distinct advantage. It’s that we can address the whole gamut. We can work with four-and-a-half-year-olds, five-year-olds five-year-olds, kids who are just starting their academic career, all the way up to college-bound.

Recurring Customers

Are very few options in the education market where a parent can go and get the best possible help for their student who is a 7-year-old and also that student sibling who is a 15-year-old. That rarely exists. And in our case, we find our advantage to be twofold. And that’s that we can tackle this gamut of age ranges.

We have programs and curricula to help them from a very young age, all the way up to help them with these advanced placement courses in high school and these very challenging subjects. That’s going to generally speak, from 4 to 18 years old, we can come up with something that is customized, that is individualized for every student.

That is our distinct advantage, which allows for us to key in on, what does this student needs? How can we help them, their family, and their parents achieve those goals? And what is that going to look like for them in the future in terms of how we set them up to be successful?

The Curriculum is the Key

Obviously, in the education business, the curriculum is the root of how we can be in existence. It is what many investors like yourselves are going to be looking at when you contemplate investing in the education business. That is our core competency.

We take the constant refinement and improvement of the content and, perhaps more importantly, the systems, our delivery of this content very seriously. Recently, we completed a comprehensive one-year process overhaul of an update to our math concepts curriculum, which has been enormously helpful during this time when schools have been less effective.

We do the same for our reading programs, for our SAT programs, for our foundational writing programs. And that is very near and dear to us to make sure that we are always at the cutting edge of being able to offer the best product to our clients. But at the end of the day, how our proprietary training systems get our tutors to be the most effective teachers possible and their commitment to excellence in teaching, that’s what makes our curriculum to the next level.

Tutoring Franchise Competitors

A lot of our competitors also pride themselves on the fact that they have a solid curriculum, and I won’t dispute that. But the way and manner in which we can bring motivated, engaging tutors into the fold to bring this to life and get kids excited about learning again is something that we feel very strongly and passionate about.

We know that that is why our franchisees and the locations that we as owner-operators continue to operate, we are successful and we are fundamentally strong. These are a great deal of the reasons that we are still in a strong position, and we feel very bullish about moving forward into 2021.

We talked a little bit about why customers tend to choose Tutoring Club. Of course, this is because of our ability to tackle effectively virtually all aspects of education.

Why would a Franchisee decide to join Tutoring Club?

We feel that the qualities that lead franchisees to choose us are similar to why a lot of customers, parents, kids choose us as well. It’s that we do all subjects, it’s that we cater to all ages.

As a franchise owner, this ability to handle such a broad segment of the possible student population gives you access to a far more significant market than really any of our competitors economically.

You can also recoup your investment in this business and net a greater ROI far more quickly than most other forms of business. And this is because of how we enroll our families in our services.

What we instead do is lay out a blueprint for how a student is going to be successful moving forward. And the fantastic thing is, for you as the business owner, instead of always chasing the recoup of your investment cost, you can very quickly cash flow positive because most of our families are pre-purchasing 8, or 12, or 14 months, for example, in advance.

You are going to net the proceeds of these transactions and this commitment of this family for a long period on the front end. And, of course, you will have to service and make sure that we carry out the services that we’re committed to.

But in the long run every couple of minutes, and over time, that small margin adding up to recouping your investment costs, we’re able very quickly to cash flow positive because of the pre-purchase nature of what our transactions are.

In-house Financing Service

What’s great is we have an in-house financing service that for a lot of parents is very commonplace, 0% interest. They pay for the tutoring sessions over that year. But you as the business owner, can still also net the clear majority of those proceeds upfront several thousand dollars.

That is rest assuring at a time when there’s uncertainty in the world. When you’re going to open a new business at a fantastic opportunity point like this, we want you to be confident in the fact that you can have some money in the bank very quickly. And we feel very confident in that.

So moving forward, you know, what we want to do is not require that our investors, that our franchisees, who oftentimes are owner-operators. We don’t think that you need a Ph.D. in education.

Realistically, to run these centers, our software systems, our team behind you, we take care of all those educational decisions. And we make sure that we put the KPIs, those key performance indicators in front of you daily so that you and your team can focus on what is the most critical. And I don’t want to mix words here.

The most critical thing and the most critical role that you as an owner-operator or your appointed manager will play is as follows, building relationships and enhancing the client experience.

Tutoring Clients

With Tutoring Club, we think we have two clients. One client is the student at hand, and the other client, of course, is oftentimes the parent. So making sure that you or your designated manager can be the one who builds these relationships and fosters this fantastic experience when the kids are coming in overtime, that’s what we want you to focus on.

Let us take care of the nooks and crannies of what we should do with reading comprehension and how many hours and sessions it’s going to take to achieve a certain goal.

You do not need to have a steep or an esteemed background in education to come into this world. You need to be passionate about people and putting your team in the best position to succeed and enhance your community. That is it.

About training

When you sign on board to become a Tutoring Club franchisee, the key for us is that we make sure that you are indoctrinated in all things TC. We view you as part of the TC family, as part of our community. And make sure that when you first come to training for two weeks at our headquarters in Henderson, Nevada, we can give you every bit of information that you’re going to need to be successful.

Then, we send one of our key training staff members to you, wherever you may be located. We will send one of our key training individuals to you for one week after your training has concluded with us. And that’s wonderful because then we can see what your local environment is breeding in terms of customers coming in and how we can be extremely successful in your market.

But also, there’s real-world experience then. Maybe you’ve opened the doors. Maybe you’ve been there for a week or two operating and you’re getting calls from clients and starting to see kids come in. For our staff members to be able to work with you hands-on at that point, that’s how we ensure that they’re a success. This is not a one time, come out for two weeks, and we’ll talk to you once a year. This is ongoing.

New Education Franchise

Liam: As a new franchisee, we love to make sure that not only do you have access to our team, which, as Patrick was mentioning, you have access to us. We like to keep this a family feel. We feel that, as a collective, we are extraordinarily strong. And the goal moving forward is that we are only going to bring on individuals that we feel will be wildly successful with this.

So, in a way, yes, we’re going to be a bit picky. But once we feel great about a situation, you feel great about our company moving forward, when you sign on, we’re going to pair you with two franchisees who are veterans. The majority of our franchisee network, a lot of them have been doing this for 10, 12, 15 years. David and Daniel actually, operators themselves for more than 16 years. So making sure we can pair you up…

Investor potential research

Patrick: Liam, I think that’s a big… How do you vet franchisees? How do you make sure that only franchisees coming in have a very high chance of success and meet your core values? Tell me a little bit about that process.

Liam: Our process is not extraordinarily rapid, let’s say. If somebody is keen on doing this business, we want to make sure they have multiple opportunities to have thorough conversations about your goals. What I will talk about momentarily as well, your financial goals, of course, but why are you looking to do something like this?

We need to make sure that we’re aligned, in that, we are passionate about building our communities up. We are passionate about empowering our individuals to change these student outcomes.

There are all the typical things too, background checks, making sure it’s financially viable, and so forth. But the most important thing is the human element for this.

There is a Franchise Fee

Of course, the franchise fee is $34,500. Beyond that, you will have to furnish the interior of your center. We supply you with everything that you need for the interior of your center to get open and operated on day one.

You don’t need to worry about how you’re going to design this place. We have the blueprint ready to go for you to build out your center to the exact specifications so that if you walk into your Tutoring Club, it looks just like ours here on the West Coast. So that is going to be part of your total investment moving in. And, of course, you’ll have your other basic, you know, functions and cost of setting up a business.

You’ll have to do a build-out. The great thing is our build-out is very easy. We require an open format, a room where your tutoring takes place, an office, and a bathroom.

Investment Range

Your cost of build-out is theoretically going to be quite low compared to a lot of other businesses which require certain really heavy equipment. So with all that said, the investment range when we look at a breakout is going to be about $88,750 all the way up to $162,650.

The overwhelming majority of our franchisees get their doors open and have cash in their operating account to operate the business on day one for under $90,000. And we intentionally like to keep it where it’s digestible for a lot of our investors coming in.