Good Times for Kids' Stuff

by Caitlin McGarry, Las Vegas Business Press

Parents have sacrificed many luxuries, and even some necessities, during the recession. The last expenditures to be cut from family budgets, local business owners say, are extras for children, placing children's services franchises in a more financially viable position than those in other industries.

According to a recent report on child franchises from Franchise Business Review, the industry is relatively "recession-resistant." Eric Stites, the Portsmouth, N.H.-based market research company's president and CEO, said school district budget cuts have helped child-related franchises, because parents are looking to fill the educational gaps with other resources.

"Public school systems have had their budgets gutted. They're cutting music and sports programs and all the extras that really make a well-rounded student," Stites said. "That's created a lot of opportunity for companies that provide services in those areas to do well with the economy going down."

According to the company's 2011 report, culled from surveys of 752 franchisees, tutoring programs in particular have benefitted from budget cuts.

Mathnasium franchisee Dan Saposhnik opened his first location in northwest Las Vegas in December 2006. He opened a Summerlin location of the math learning center franchise in 2008, which now ranks in the top 10 Mathnasium franchises in the country.

Saposhnik, an entrepreneur with a master's in business administration, decided to open a Mathnasium franchise because of its specialization in math, and also because his mother was a principal in the Clark County School District for 20 years. He estimated that each location cost $70,000 to open, including real estate and franchise fees.

Due to the changing economics of the neighborhood, Saposhnik closed the northwest branch in 2010, but opened a Henderson location soon after. Though he had to close his first branch, Saposhnik said his franchise has fared well during the recession. Business is up 25 percent this year over last year.

"Parents are doing whatever they can to make sure their kids are getting the help they need," Saposhnik said. "I've had parents come in and say, 'This may be hard for us to make this fit within our budget, but we'll find a way to do it.' Parents are making sacrifices to make sure their kids have every tool they need to be successful."

Cathy Parrill has been a Sylvan Learning Center franchise owner for 10 years, and while tutoring sessions at her two Sylvan locations, 7010 N. Durango Drive and 5891 E. Charleston Blvd., dropped during the recession, she is seeing a rebound.

"We've been squeezed dry, but we're actually trending upward right now," Parrill said.

Parrill, a self-described "lifelong educator," said she chose Sylvan because of its educational results. She has tried to help struggling parents by pointing them toward financing resources to pay for tutoring.

"It's always hard because people have to pay their mortgage first and keep their car running to get to work," she added. "I think parents want to invest in their children more than almost anything else."

Though child services franchise owners report a higher level of satisfaction with their business than those in other industries, according to Franchise Business Review, there are cons to each franchise business model -- tutoring programs require more evening and weekend hours than other types of franchises, while daycare centers have higher start-up investment costs than others.

Stites said children's services franchise owners need two qualities: a love of kids and business acumen.

"The most successful franchisees have strong business skills as well," Stites said. "A lot of people are attracted to children's services because they love kids, but their sales and marketing and business skills don't allow them to be successful."

(Click here to read original article.)

Log in to leave a comment. If you're not an FBR member yet, click here.
Email:
Password:
	Keep me logged in
Comment:

You must register to post a comment. Registration is quick & easy. If you are already an FBR member, click here.
First Name:
Last Name:
Email:
Password:
Confirm Password:
Receive updates, notifications and special offers from Franchise Business Review
Comment:
Verification:	[ New Image ]