Sylvan Learning adopts a new business model that allows franchisees to be more successful within their territories
while adding new programs to attract more clientele.
By Janice Hoppe
Sylvan Learning recently updated its licensing agreement and business model to make them more attractive to existing franchisees and others considering entering the business. “We are sending a message that it’s a new day at Sylvan,” CEO John McAuliffe says. “We are building academic confidence, igniting intellectual curiosity and inspiring the love of learning, which speaks to franchisees, families and employees here at Sylvan.”
The Hunt Valley, Md.-based supplemental learning center company was founded 37 years ago and today has more than 800 points of presence across North America, the Middle East, in Hong Kong and Guam. When a student begins at Sylvan, the company provides each student a personal assessment to develop an individual learning program for them.
Sylvan specializes in core math, reading, study skills and ACT/SAT prep. The company recently began offering science, technology, engineering and mathematics (STEM) courses, such as coding, robotics and engineering. “Our migration into the STEM arena has been significant,” McAuliffe explains. “We started with first through fifth grade content and by the end of the year it will be applicable up to high school. It’s created a lot of excitement in our system. Two-thirds of our system has adopted these programs and we are now the national leader in STEM programs.”
Sylvan’s programs are delivered through iPad technology called SylvanSync. Students learn better through the use of technology, McAuliffe says, and the content can be updated regularly. “We can always stay current with trends in terms of new products,” McAuliffe says. “We have enhanced our math program to include paper-based math education for younger kids and online algebra for older students.”
In addition to updating its program, Sylvan revamped its business model and licensing agreement to benefit franchisees who began migrating over July 1. “We came out with a model that’s more profitable and flexible,” McAuliffe says. “We had significant input from franchise owners, which helped form the final license agreement. Eighty-two percent of franchisees voluntarily moved from the old license to the new agreement.”
Sylvan changed its fee model into one flat royalty payment, which takes care of franchisees’ technology enhancements that are made on a continuous basis and national marketing. Secondly, Sylvan lowered the footprint requirement for centers from 2,400 to 1,000 square feet. “Because franchisees own exclusive territory and convenience is important to our clients, franchisees can now have multiple points of presence in their territory,” McAuliffe explains. “Instead of one center in the middle of their territory, they have two or three different centers but ones with a smaller footprint.”
The change in square footage will not significantly impact the interior of Sylvan centers. “The footprint is not complex,” McAuliffe explains. “You have an office or two, a group room and the rest is open space where you put tables for children to receive their lessons. The theory behind it is that, while there are less tables and you generate less revenue from one spot, you have multiple locations and generate much more revenue overall because of the convenience factor.”
Franchisees can also establish satellite locations in schools, libraries and community centers to deliver tutoring to students. “A large number of our franchisees have after-school programs,” McAuliffe says. “A lot of the in-school programs are focused on STEM. We have our franchise program set up so they have the ability to make local decisions that will drive their business the most successfully.”
Growing the Brand
Sylvan looks for franchisees who are passionate about education and have a business background. “We want someone who is connected to the community,” says Georgia Chasen, director of franchise development. “Some franchisees are multi-generational owners where the kids are joining their parents and expanding into additional territories. We want people with a strong business background that see the value in education. They can make a good living and begin a legacy for their family.”
As franchising continues to grow, Sylvan is drawing new territories based on much more data today than it had 37 years ago when it only looked at the number of children in households that made more than $50,000 a year. “With our sophisticated mapping software, we can perform a market optimization analysis and understand how our customers travel,” Chasen says. “We can look at different ways on how a franchisee might penetrate the market.”
Sylvan has had more than 41 franchise development transactions this year, with both new franchisees joining the brand and current franchisees expanding. Once a franchisee’s application is approved, they have six months to open a brick-and-mortar center. “When people come in they want to get going as quickly as possible,” McAuliffe notes. “Some are getting a head start with satellite locations to highlight the brand in the market.
“We focus very much on identifying where we need to target our new franchisees,” Chasen adds. “Our franchisees build relationships in the community and that’s how they make a difference. We build a relationship with our franchisees by providing the best-in-class products, technology and training to support their dream; everything we do is for their success.”
Moving forward, Sylvan plans to continue delivering the best education programs with an updated business model that makes operating a franchise more efficient and attractive. “We need to continue leading the market,” McAuliffe says. “Sylvan is research-based and personalized for your student. We are the leader in technology and our STEM program is a step ahead of everyone else, but we will continue to evolve with the marketplace. We intend on growing the system with our new business model and expanding further, both domestically and internationally.”