Mathnasium
Date of Incorporation: 2002
Franchising Since: 2003
Address: Los Angeles, California
Country: U.S.
Business Description: Mathnasium offers and awards franchises throughout the United States to independent operators for the operation of learning centers that provide math instruction using the Mathnasium education method at locations we have consented to. Mathnasium centers are open to the public at least five times a week during after-school hours for at least four hours per day. Children typically attend Mathnasium centers twice a week for approximately 60 minutes per session. Some children attend more than twice a week or for more than 60 minutes per session. The Mathnasium Method uses diagnostics, instruction, guided practice and manipulatives. The Mathnasium system includes more than 12,000 worksheets for children between four and 17 years old.
Franchise Offer: A Mathnasium franchisee is granted the right under a Franchise Agreement to use the system including its teaching techniques, trade secrets and marks in connection with operating one center.
Financial Assistance: The franchisor does not offer direct or indirect financing for the franchisee’s first center or centers opened under an existing Option Agreement. The franchisor may finance initial fees for a franchisee’s second or subsequent center, if he or she qualifies.
Training and Assistance: The initial franchise training program typically lasts at least five days and is usually conducted every six weeks at or near Mathnasium offices in Los Angeles, California or in various other cities across the country. The center director and one principal, who is the largest equity owner of the franchise or the franchisee entity must attend and successfully complete a scheduled franchise training session. The franchisee and the Center Director must also participate in and successfully complete a four to five day apprenticeship in one of several Mathnasium "Mentor Centers" around the United States. Additional training courses consist of videos, reading, and worksheets completed on the franchisee’s own and submitted to Mathnasium for certification. The franchisee must participate in ongoing training as prescribed by Mathnasium during the term of the Franchise Agreement.
Territory: The franchisee will receive an exclusive territory subject to the exceptions as discussed. The territory will be based on the boundaries specifically described in the Franchise Agreement. The size and boundaries are based on a minimum of 4,000 children between the ages of five and 17 residing in the territory. Currently, the average distance between Mathnasium learning centers is greater than five miles but Mathnasium does have the right to place centers closer as long as the franchisees are granted an area containing a minimum of 4,000 children.
Term of Agreement and Renewal: The initial franchise term is for five years. The term is renewable for up to two additional five-year terms at no additional fee.
Obligations and Restrictions: The franchisee or a principal is required to personally participate in the management and direct operation of the franchise on a full-time basis regardless of whether there is a designated Center Director. It is the intention of Mathnasium to select only those franchisees whose principals plan to actively participate in the direct operation and daily affairs of the franchise. Additionally, the franchisee must act as or employ a Center Director for the center. The name of the Center Director must be disclosed to us and should the Center Director change, Mathnasium must be notified in writing. The Center Director must successfully complete the initial training program and the apprenticeship training program. The Center Director must devote his or her entire time during normal retail business hours to the management, operation and development of the franchise business at the center. A live person must answer the Center telephones during the minimum hours of 10 am to 3 pm Monday through Friday.
Total Number of Outlets: 276 units.
Investment Tables:
Initial Investment:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $27,500 for 1st center; $19,500 for additional centers |
$27,500 for 1st center; $19,500 for additional centers |
| Expenses While Training (initial training and apprenticeship) | $2,500 | $5,000 |
| Rent (and Security Deposit, if Required) | $2,000 | $5,000 |
| Furniture, Signs, Equipment and Supplies | $13,000 | $16,000 |
| Insurance | $1,000 | $2,500 |
| Business License, Name Registration | $100 | $1,000 |
| Professional Services (Legal and/or Accounting) | $500 | $1,000 |
| Phone and Utilities | $200 | $500 |
| Video Surveillance and related equipment | $1,500 | $5,000 |
| Apprenticeship Program | $1,000 | $1,000 |
| Early Stage Advertising | $12,000 | $17,000 |
| Additional Funds (4 months) | $17,000 | $26,000 |
| TOTAL (1st Center) | $78,300 | $107,500 |
Ongoing Fees:
| Name of Fee | Amount |
|---|---|
| Monthly Royalty | 10% of monthly gross receipts from all sources as a result of operating the center, plus a base royalty fee of $500 per month (payable on the first center only) plus the greater of (i) the 10% monthly royalty or (ii) $1,400 beginning in the 24th month. |
| Monthly Marketing fees | 2% of monthly gross receipts from all sources as a result of operating the center. |
| Refundable Local Marketing Fee | $2,000 per month, beginning the first month the center opens. Refundable based on reported marketing spending and lead generation |
| Technology License Fee | Currently $175, subject to increase during the year. |
| Annual Convention Fee | Currently $100 per franchisee. |
| Administrative fee for late payment | $300 every 2 weeks until payment is made |
| Administrative fee for late submission of reports | $100 every week until reports submitted |
| Non-Compliance Fine | $300 per month for each non-complying incident |
| Returned check service charge | $60 per check returned by bank for non-sufficient funds. |
| Indemnification | Any expenses to handle, settle, or dispute any matter relating to the franchisee's center |
| Shipping costs | Actual cost of shipping only. |
| Payments for "Chargeable Items" purchased from Mathnasium | Prices determined by Mathnasium. |
| Transfer Fee and Relocation Fee | $6,000 |
| Initial training tuition for additional trainees | Up to $300 per day per person |
| Additional Marketing Assessment | Pro rata amount to cover special advertising program. |
| Local or regional cooperative advertising | As determined by cooperative. (No cooperatives currently established.) All money spent on cooperative advertising will be a credit against the local advertising requirement. |
| Reimbursement of taxes | Amount of taxes assessed against Mathnasium based on payments franchisee make to Mathnasium. |
Date of FDD: 2011
The above information has been compiled from the FDD of Mathnasium along with online sources
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