In an age of blended learning, where e-tutoring is slowly supplementing traditional classroom teaching in the country smart education franchising makes a lot of sense for a modern entrepreneur. TCY is an education company engaged in test preparation and supplemented education for that last one decade. TCY’s unique fixed royalty model has worked wonders with its 34 franchise centers. The beauty of the fixed royalty model is, it helps the franchisee make more and more money. The harder he works, the better are his returns because he ends up paying his franchise his share. On the other hand, under the variable royalty model, franchisees always believe that howsoever hard they word, the company would take a specified percentage of the earnings as royalty. The franchise are largely in Northern India, mainly in Punjab, Chandigarh and Jammu and the company is now targeting Haryana, Uttar Pradesh, Himachal Pradesh, Delhi and NCR,. Students’ word of mouth is the major factor behind the TCY’s enrolment growth.
The model highlights:
1)Low start up cost
2) Description based royalty
3) High ROI
4) Training and back up support
Maximum returns maximum motivation. It is as simple as that. When a franchise center enrolls a new student, there is a certain amount of revenue attached to him. As his number of students increases his (franchisee) overhead costs are fixed. So, he is highly motivated to enroll more and more and more students, resulting in more revenue. So, more revenue, more returns.
The franchise has a great role to play in the company’s classroom programs for the simple reason that the franchisor cannot be physically present at the centers. This requires standardizations of every aspect of delivery through the entire management.
Drivers of growth:
Experts feel that the franchisees are the drivers of growth for franchisors. It is for the sake of speed and resources that one should expand through the franchise route rather than the company outlet. Over here, capital is very important. If one has to grow through self owned centers, the growth would be very slow. One can use the power of many entrepreneurs in the chain and actually empower them to lead in their local geographical markets. It is a win-win situation for both. According to the fixed royalty model, the franchisor gives chunk of the revenue (earned) to his franchisees, but at the same time, the franchisor’s peed of growth ins much faster.
Moving fast towards its objective of opening a hundred centers by the end of this financial year, TCY has optimistic plans or the future. The company lays a lot of emphasis on the strong franchise network.
Win-win situations for franchise:
Under this unique tie up the franchisees do not have to invest any thing in the R &D of the courses which is taken care of by the company itself. The entire courseware, methodology and administrative support are given by TCY. So, the franchise does not have to worry about anything. In a way, it is a win-win type of situation for the franchise. All he was to worry is about his overhead costs and staff salaries. Now that is also becoming a thing of past with most of the franchisees making handsome gains due to growing businesses.
Now the question that arises is does online education affect classroom teaching?
At least the CEO does not think so. Both are doing great. In fact, online programs are supplementing students’ classroom in the country.
The company has big expansion plans for Delhi, Haryana, Uttar Pradesh and the southern part of India. It is looking for the right kind of partnerships. That is very important for the success of the franchising model. We are very bullish that our model will be highly successful in other parts of India as well, says TCY’s Franchise Manager.
They are moving towards their target (100 centers) through different modes and have started advertising on the national platform. At the same time they are increasing the brand visibility through online portal and the media.
With an average of opening a new center every fortnight, the company is making long strides in increasing its market share in the entire region.
We want to keep up with the same winning strategy of growth through our partners by maximizing their profits. We are very confident of our tried and tested franchise model that has a potential to achieve over 100% return on investment in the first year itself.