Huntington Learning Center Franchise Cost & Fees
Date of Incorporation: 1977
Franchising Since: 1985
Headquarters: Oradell, New Jersey
Business Description: The franchisor is Huntington Learning Centers, Inc. Huntington Learning Center franchisees provide tutoring principally to school-aged children. Services consist of tutoring in reading, phonics, study skills, mathematics, and related areas and 1-1 instruction in junior high school, high school, and college math and science subjects. Beginning in the business’s second full calendar year of operation, franchisees also offer 1-1 instruction to prepare for state and standardized entrance examinations, principally the SAT and ACT.
Franchise Offer: The franchisor offers a franchise to establish and operate a franchised Huntington Learning Center under the Franchise Agreement. “Huntington Services” consist of Tutoring Services and Exam Prep Services:
- “Learning Center Service” is in-person tutoring in reading, phonics, study skills, mathematics, and related areas conducted using a student-teacher ratio of at most 4-1.
- “Subject Tutoring Service” is 1-1 in-person tutoring in math and science subjects and other subjects that we may designate from time to time, principally to students in junior high school, high school, and college; and does not include Learning Center Service or Exam Prep Service.
- “Test (or Exam) Preparation Service” is 1-1 in-person tutoring to prepare students for state and standardized entrance examinations, principally the SAT and ACT. “SAT” and “ACT” mean standardized college admissions tests SAT I and ACT Assessment, created by College Board, Inc. and ACT, Inc., respectively.
Financial Assistance: New and existing Huntington Learning Center franchisees will have the one-time opportunity to borrow up to $100,000 (less the Loan Facility Fee of $3,200) in opening a new Center. Franchisees are required to use the funds for working capital and opening expenses, which may include the initial franchise fee and the cost of curricula, furniture, equipment, and computers needed to establish the Center. The lender will be Huntington Learning Corporation, except in California, where the lender will be Huntington Learning Centers, Inc. If franchisees wish to secure financing from the Small Business Association, it requires they execute the Franchise Agreement as a corporation, partnership, or other legal entity; and that they execute all the franchisor’s required agreements and amendments. Other than the financing described above, neither the franchisor nor its affiliates offer any direct or indirect financing. The franchisor does not guarantee franchisees’ note, lease, or other obligation.
Training and Assistance: The franchisor offers franchisees and their staff both in-person and online initial and on-going training. The franchisor conducts in-person initial training at its Oradell, N.J.-based training facility and nearby corporate centers. The franchisor conducts online initial training through its online training facility. Franchisees may use the Online Training Facility at any time. The franchisor conducts advanced training throughout the country, at its Corporate Training Facility, and through its Online Training facility. At the Corporate Training Facility, the franchisor offers both in-class and on-the-job training. The in-class training employs volumes of written and electronic-based material, classroom and computer-based learning, phone conferences, role playing, and online training. The on-the-job training consists of performing or observing instructional, management, or administrative functions at one or more corporate Centers. The online training employs phone conferences, role playing, and video development. All training employs verification with respect to all materials. The franchisor currently offers advanced training through regional meetings, local trainings, and through its Online Training Facility.
Territory: Upon signing of the Franchise Agreement, franchisees will receive an exclusive area, which the franchisor will call either an Exclusive Area or a Territory. Neither the franchisor nor its franchisees or affiliates will operate a Center within it during the term of the Franchise Agreement, providing franchisees comply with all their obligations under the Franchise Agreement. An “Exclusive Area” is a geographic area within a radius from the premises that the franchisee and the franchisor determine. Typically, it is a circular area with radius of up to three miles. A “Territory” is a geographical area delineated by political or physical boundaries.
Term of Agreement and Renewal: The length of the initial franchise term is 10 years, unless the franchisee assumes an existing franchise, in which case the term is for its unexpired term. If franchisees comply with the required conditions, they may renew for unlimited 10-year terms.
Obligations and Restrictions: Franchisees must use their best and continuing efforts to promote and develop Huntington Services at the Franchised Business. Franchisees, their Primary Franchisee Member, or their manager must exercise on-premises supervision of the Franchised Business during all operating hours specified in the Operating Manual. The manager and the franchisee’s spouse, the Franchisee Members and their spouses, the spouses of guarantors, and all employees having access to any of the confidential information must sign a Confidentiality and Non-competition Agreement. Franchisees must sell all services specified in the Operating Manual or in writing, and no other services or products. Franchisees must stop selling any services or products that are disapproved. Franchisees must not use the Franchised Business or its premises for any other business.
Estimated Number of Units: 270
|Name of Fee||Low||High|
|Initial Franchise Fee||$22,000||$22,000|
|Travel, Living Expenses While Training||$0||$6,000|
|Furniture, Equipment and Computers||$22,000||$23,700|
|Training and Technology Fee||$1,140||$2,280|
|Security and Utility Deposit; License Fees||$500||$3,000|
|Real Estate and Improvements||$0||$45,000|
|Insurance - 3 Months||$375||$4,500|
|Additional Funds - 3 months||$18,000||$40,000|
|Type of Fee||Amount|
|Continuing Royalty||9.5% of Gross Revenue; 8% for certain franchisees; $2,000 monthly minimum for all franchisees.|
|Advertising Fee||2% of Gross Revenue; $500 monthly minimum.|
|Cooperative Advertising Fee||Determined by members, except as provided by Bylaws. Some cooperatives do not impose any fee. In those that do, the average is about $2,000 per month.|
|Local Advertising||Spend at least $36,000 per year during opening year and 1st full year; $46,000 during 2nd year; $57,000 during 3rd year; beginning in 4th year and each year thereafter, we may increase minimums by up to 10%|
|Audit||Cost of audit; $100 late fee; 18% annual interest.|
|Training and Technology Fee||$380 per month during opening year and 1st full year; $450 per month during 2nd year; $550 per month during 3rd year.|
|Convention Fee||$480 for first attendee; $240 per subsequent attendee; travel and hotel expenses per attendee up to about $2,000|
|Call Center Agreement Fees||$285 per month, plus variable Academic Evaluation (AE) Fee ; $32 fee for each Subject Tutor enrollment; $32 for each AE or enrollment; $15 fee for each customer service call to the Call Center.|
|Conference Service License Fees||$84 per hour.|
|Accreditation Fees||$500 Visit Management Fee and $600 Annual Fee, plus 15% to the franchisor.|
|Transfer Fee||Greater of $15,000 or 35% of then-current, non-discounted maximum initial franchise fee.|
|Renewal Franchise Fee||Greater of $15,000 or 35% of then-current maximum non-discounted initial franchise fee.|
|Internet Service Costs||$45-$130 per month.|
|Reimbursement of Third Party Fees||Will vary.|
|Insurance||The franchisee’s insurance company determines amount; about $1,500 to $4,300 per year, excluding workers compensation.|
|Audit||Cost of audit; $100 late fee; 18% annual interest.|
|Late Fee; Interests||$100 late fee; 18% annual interest.|
|Attorney's Fees||Cost of action; attorneys' fees.|
|Indemnification||Cost of claim against us; attorney's fees.|
The above information has been taken from the FDD of Huntington Learning Center. Year of FDD: 2015
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