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FRANCHISING : AN EMERGING SUCCESSFUL MODEL TO EXPAND PRE-SCHOOL EDUCATION

Early childhood sets the foundations for life. It is a highly sensitive period marked by rapid transformations in physical, cognitive, social and emotional development. Research has proven that the brain forms as many as 700 neural connections per second before the age of 5. Access to high quality early childhood education (ECE) effectively impacts the learning abilities of children later during their primary, middle and higher education.
As per the Census 2011, there are 164.48 million children in India between 0-6 years of age. Recognizing the need to provide quality pre-primary programmes, a number of constitutional and policy provisions have been made by the Government such as the 86th Constitutional Amendment which introduced Article 21 A on the Right to Free and Compulsory Education (RTE) for children aged 6-14 years. The Government of India recognizes the significance of ECCE, which has been included as a constitutional provision through the amended Article 45 (The Constitution Act, 2002) which directs that “The State shall endeavour to provide ECCE for all children until they complete the age of six years” .
But ECE is not recognized as a compulsory provision by RTE, though it urges states to provide free pre-school education for children above three years. The Government of India also approved the National Early Childhood Care and Education (ECCE) Policy in 2013. However, despite these initiatives, there are still substantial numbers of children not enrolled in preschools, or those who show poor learning skills in early grades. Hence, building school readiness is still a huge challenge in India.
Well-designed ECCE programmes can significantly enhance young children’s well-being in these formative years and in the future, complementing the care they receive at home. Programmes that combine nutrition, health, care and education have a positive impact on cognitive outcomes. Preschools act as an important medium here to provide ECE to the child and to make them school ready.

The immense potential of the preschool sector

The Indian preschool sector is experiencing rapid growth. As per a report by CLSA Asia Pacific Markets, the preschool education segment in India was estimated to touch $ 3,426 million by the end of 2012. Another study by Ernst and Young estimated the market to cross $1 billion in 2012, with a growth rate of 35% . As per the latest report on Education market by Mint in Jan 2015, the education market in India, which is presently worth around Rs 5.9 trillion ($92.98 billion), is poised for some major growth by 2020. The organized sector is expected to rise considering the rapid growth of preschools in Tier III and Tier IV cities.
In urban areas especially, a preschool is now considered a necessity by most parents. Preschools, popularly known as playschools, cater to children aged between two to four, and seem to be a lucrative investment for franchisees and investors. With the entry of a number of reputed chains, national as well as international, this sector is witnessing immense growth and development. With many of them opting for the franchise route to scale up their presence, the concept of franchising among interested and start-up entrepreneurs, has caught on fast in the last few years.
Factors influencing the growth of preschool chains/franchises today:

A number of factors have accelerated the growth of the pre-school and play-school education franchise. These are:

Working parents, smaller families: The concept of preschool education has received a boost with the growing number of working parents in full time professions. Earlier, even when mothers were working in joint families, children were looked after by other family members or grandparents. With no one to take care of young children at home in present times, pre-schools have become a necessity. Extended day care offered by some pre-schools act as an added facility for the parents.

Changing perception of preschool education: Education is the second highest expenditure segment for middle class households today. Parents are realizing the importance of engaging young children in activities early in order to enhance their emotional and intellectual growth. Increasing competition and difficulty in getting admission in K12 also encourages parents to send their children to preschools to prepare them to face interactions.

Innovative learning approaches: The fun-interesting learning approaches provided by some pre-schools have made them more reliable and attractive to parents. Many credible preschool groups offer student-centered, innovative activities which help to instill 21st century skills of Imagination, Collaboration, Creativity and Collaboration in children. Children are also encouraged to develop confidence and skills in their interest or talent areas.

Low investment: Aspiring entrepreneurs require less investment in running and maintaining pre-schools. The minimum investment required is in the range of 5 lakh-50 lakh. Moreover, pre-schools work best if they are in close proximity of residential areas. Therefore, they do not require buying or renting prime spaces in malls or up-market locations in cities.

Women entrepreneurs: A pre-school franchise is one of the best business ventures for women, as they possess inherent qualities and skills to nurture little minds. It also offers them a safe, comfortable environment and flexible working hours.
Among the preschool chains operating in India, the more prominent ones are Sesame Schoolhouse, EuroKids, Shemrock Schools, Kangaroo Kids, Sanfort, Kidzee, Serra International, Podar Jumbo Kids, Hello Kids, and Sunshine among others. Among these, Sesame Street is leading the way by revolutionizing the way children learn. Sesame Street Preschool is a venture of Sesame Schoolhouse, the latest educational initiative from Sesame Workshop, one of the largest non-profit informal educational organizations in the world who also produce the world acclaimed children’s educational television show, Sesame Street. Sesame Schoolhouse is setting a new standard for early childhood education through their unique preschool and afterschool programme: Sesame Street Preschool for pre-primary learners aged 2 to 5, and afterschool to reinforce science and math concepts for children ages 6 to 8. It’s a learning experience brought to life by the fun and furry characters of Galli Galli Sim Sim, India’s first educational programme for children. Their unique brand of age-appropriate education puts kids at the center of everything, from playful project-based activities to an environment made for rampant imagination.

Why the preschool franchise is becoming a successful expansion model

The preschool franchise model offers several advantages for a potential franchisee. It reduces the risk and gestation period associated with a business and provides an easy transfer of technical knowledge and the well structured procedures and policies laid out by the franchisor. The advantage of partnering with a known brand helps in outreach and attracting more parents towards the school. A franchisee doesn’t have to worry about research and development of curriculum as a set preschool curriculum developed by experts is provided by franchisors.

In addition, franchisees looking to collaborate with a recognized preschool brand can explore several location and operational options as some leading preschool chains are looking to expand their outreach to Tier I and Tier II Indian cities or even international expansion. From the franchisor’s perspective, the preschool business is not only lucrative; but also helps them quickly build up their presence in targeted geographical locations. The franchisor not only shares the brand image, but also their knowledge, experience, and technical expertise.

Challenges and way forward

Although the preschool sector offers tremendous opportunities for growth, franchisees do face certain challenges to achieve the desired objectives. Presently, preschools are primarily an urban phenomenon and rural areas are still to catch up on this trend. Also, due to the lack of a proper regulatory mechanism and any guidelines or checks by the Government, unorganized players are mushrooming in this sector. Moreover, a sizable number of parents still do not know much about the modern education techniques and they don’t understand or care little about brand preschools.

In conclusion, one can sum this up by saying that that as the preschool industry is a sector with a huge potential that needs to be tapped, a franchisee can look at satisfactory and fulfilling partnerships with established, credible preschool brands as a viable option to fulfill their entrepreneurial aspirations. They should, nevertheless, conduct a proper background research and discuss the terms and conditions carefully before formalizing the contract or partnerships in order to get the maximum benefits from this growing educational venture. The way forward for leading chains is to capture a bigger share of the market by increasing the number of franchisees. This can be done by effectively expanding outreach to potential preschool franchise owners and building strong relationships with existing franchisees and helping them increase the number of admissions. There should also be innovative strategies to reach across to parents through a focused campaign to create a buzz. Franchisors should also work towards creating champion franchisees and share their model with others and replicate them in other settings. There should also be earnest efforts to attract quality teachers and preventing attrition as quality educators are the backbone of education.

REFERENCES:

http://wcd.nic.in [accessed on 22 July 2015]
“Preschool Education in India”, Childology: Understanding Children, www.childology.in [accessed on 20 July 2015]

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