The COVID-19 pandemic has had an unprecedented impact on our education system. With many students missing months of school in 2020, and with students across the country attending class remotely and relying on working parents for daily guidance in 2021, experts are forecasting long-term impacts for students of all ages. As reported by the Organization for Economic Co-operation and Development (OECD):
“This crisis has exposed the many inadequacies and inequities in our education systems – from access to the broadband and computers needed for online education . . . up to the misalignment between resources and needs. The lockdowns in response to COVID-19 have interrupted conventional schooling with nationwide school closures . . . [and w]hile the educational community have made concerted efforts to maintain learning continuity during this period, children and students have had to rely more on their own resources to continue learning remotely . . . .”
Given these impacts, parents across the country are looking to non-traditional venues to ensure that their children are able to receive the education they need. This includes relying on education franchises.
Should You Invest in an Education Franchise During the COVID-19 Pandemic?
If you are thinking about investing in an education franchise during the COVID-19 pandemic, there are several important factors you will need to consider. While the short-term demand may be enticing, this is just one of numerous considerations that should ultimately guide your buying decision. Here is an overview of some of the key issues involved in buying a franchise from franchisee lawyer Jeffrey M. Goldstein:
- Long-Term Demand – While there may be significant short-term demand for educational services outside of the traditional school environment, will this demand withstand the eventual return to normalcy? Or, will parents largely abandon alternative education options once schools resume their normal operations?
- Initial and Ongoing Costs – What is the estimated initial investment for the education franchise you are considering? What are the royalty and advertising fund fees? In order to determine whether a franchise is a good investment, you must assess both (i) how long it will take to recoup your investment, and (ii) how much you can expect in terms of net earnings on a month-to-month basis.
- Operating Rules and Restrictions – A hallmark of the franchise model is the franchisor’s ability to strictly control its franchisees’ day-to-day operations. While this helps to ensure uniformity, many franchisees find that it ultimately hampers their ability to build a profitable business.
- Franchise Agreement Terms – What are the terms of the franchise agreement? From operational controls to post-termination restrictive covenants, franchise agreements almost universally contain heavily one-sided terms that require careful consideration and strategic negotiation.
While these are some of the key considerations, this list is by no means exhaustive. For more information about evaluating an education franchise opportunity, you can read: Thinking About Buying a Franchise in 2021? Here’s What You Need to Know.
Schedule a Free Consultation with Franchisee Lawyer Jeffrey M. Goldstein
If you have decided to pursue an education franchise opportunity, your next step is to obtain a franchise business review. At the Goldstein Law Firm, we offer four fixed-fee franchise business review programs for prospective franchisees. To learn more about these programs, please call 202-293-3947 or request a free initial consultation with franchisee lawyer Jeffrey M. Goldstein today.
