After Four Decades in Franchising, Sylvan Learning Remains One of the Most Cost-Effective Investments in the Industry

When Lauren and Michael Webster decided to become franchisees with Sylvan Learning in 2017, they were concerned about the cost. Lauren had worked with Sylvan as a tutor for three years, so she knew the value of the business, but investing in a small business of any kind was a major leap for the married couple. So, the Websters approached the opportunity cautiously, researching the industry, mapping out their financials and, crucially, studying Sylvan’s Franchise Disclosure Document, or FDD. What they found was an even better investment opportunity than they’d hoped for.

“The cost was a huge decision for us,” Lauren said. “But when we ran the numbers, we discovered it was a really special opportunity.”

Investment options

The start-up costs for a Sylvan Learning range from $70,270-$163,625, including the initial franchise fee of $24,000. That range accounts for the three types of licenses available to franchisees: The Core License, the brand’s primary offering, which comes with a protected territory; The STEM “Edge” License, which includes programs and resources for coding, robotics, engineering, science and math; and The “Ace It!” License, which allows franchisees to offer institutional or contract services to local schools.

That range of investment options allows points of entries for a far greater pool of entrepreneurs than most other franchise brands in any segment. According to Sylvan’s VP of franchise development, Georgia Chasen, that’s exactly the point.

“One of the reasons Sylvan has been around for more than 40 years and continues to stand head and shoulders above our competitors is that we prioritize talented, passionate franchisees,” Chasen said. “If we meet a prospective franchisee who aligns with our values and brings a phenomenal skillset to the table, the last thing we want to do is chase them off with a prohibitive entry cost.”

Franchise growth

The low cost of entry also allows Sylvan franchisees to grow quickly. After finding early success with their first center in 2017, the Websters began planning their second center, which opened in 2019. Now, they are gearing up to open their third.

Lauren attributes some of that growth to Sylvan’s development team, which she says continues to provide support long after a franchisee signs their contract.

“The franchise development team is fantastic. They help you every step of the way,” she said. “Any question you have, they find an answer. If they can’t answer it themselves, they find someone who can. Their priority is helping you stay on course and providing everything you need for a successful opening.”

Financial incentives

Sylvan’s uniquely lucrative financial structure goes beyond its low and flexible initial investment. “Sylvan Learning offers franchisees many financial incentives,” said Sylvan’s VP of finance, Jacob Jones. “Our franchise fee is less than those of many of our competitors in order to attract the next generation of entrepreneurs. We also offer a discounted franchise fee to veterans.” And when it comes to royalty fees, Sylvan collects just 16 percent of monthly gross revenues. “Our royalty fee structure is one of the most competitive in the franchising industry,” Jones said.

Still, for the majority of Sylvan’s franchisees, the upside isn’t just financial.

“The investment pays off in so many ways,” said Lauren. “But maybe the biggest and best is when you have that experience of watching a kid’s eyes light up when they finally understand something they’ve been struggling with for years. There’s nothing like it.”