The private coaching industry in India is one of the fastest growing areas in the service sector. It caters to various sections of students like primary and secondary education, JEE and other engineering entrances, medical entrances, CAT and other management entrances, law etc. The average growth rate for the coaching industry for the past six years has been a whopping 35 per cent. The current size of the private coaching industry in India is about $23.7 billion and is expected to touch $40 billion by 2016.
With both parents working and an increase in academic pressure nowadays, the demand for coaching institutes has risen sharply over the last decade. This demand along with the zeal for growth motivates coaching institutes to go in for expanding their business via franchising. Franchising allows coaching institutes to tap the potential students in unexplored markets, expand faster with better market penetration to name a few.
There are many factors which one should consider before going in for opening a new branch or a franchise. Here are five of them to help you get better with the next branch:
Demand
With the increase in competition and need for an extra academic help, the demand for coaching institutes has increased. According to a study, in metro cities almost every household sends their child to coaching institutes to gain that extra knowledge to build an edge. Unfortunately, all cities do not follow the same trend and so need to be considered.
Geography
Before going in for opening your next branch or opening a franchise as a franchisee, one should do a thorough research on whether the location of the coaching institute is easily accessible by students. This factor would vary from city to city. According to Aakash, “This is a very important factor to be considered. If we plan to open an institute in Mumbai, we’d keep it near the metro so that students can reach there easily. If we open our coaching classes in Chandigarh where students usually commute on two-wheelers, a central location would be preferable. “
Potential
A coaching institute should study the number of students in the vicinity and nearby areas who could join the institute. Low number of students in a training institute could lower the confidence of students in the institute regarding its worth. Also, the institute would not generate much revenue from that particular branch so as to sustain. As Aakash Chaudhary, Director, Aakash Educational Services puts it, “Demand from other geographical areas for our institute leads us to conduct our research in those areas and decide whether opening a branch there would be feasible or not.”
Fee charged
The fee to be charged by coaching institute franchise/branch needs to be looked upon by the management. People from different cities have different disposable incomes and so their paying capacity varies. Thus, fee charged by coaching centres like Aakash Institute in Delhi would be much different from what they charge in Hisar.
Human Resource Availability
Opening a coaching franchise/branch would require acquiring/renting a building, designing interiors, employing managers, faculty and other personnel for its maintenance. Many institutes prefer going in for local/regional human resource as they are acquainted with the place and can provide easy contacts regionally.
One should consider all the points above before going for the next branch and for a franchisee setting up a franchise. No tedious government registration, no Government norms, no VAT, but just an initial set-up encompassing a small place, the right infrastructure, the right resources, the right approach and you are all set to open your next branch.
