Franchising Since: 1991
Headquarters: Tampa, Florida
Estimated Number of Units: 235
Franchise Description: New Horizons Franchising Group, Inc. is the franchisor. The franchisor offers franchises for the operation of computer-related learning centers to independent operators throughout the United States and other countries. Franchisees sell and deliver training to businesses and individuals who use any type of computer device (whether a desktop terminal or a laptop, tablet, or other mobile device) providing instruction on how to use, manage and program computer-related software applications and how to use, build, manage, secure and repair computer hardware and related equipment. Additionally, franchisees will be offering IT service and project management as well as leadership, business and business intelligence skills.
Training Overview: The franchisor will train the franchisee’s designated general manager, their designated primary owner and at least one other member of their executive management all of whom must enroll in the same session of initial franchise training (IFT). IFT is a comprehensive course of at least eight days that combines formal presentations by the franchisor’s instructors and other staff with role-play and case studies, as well as online self-paced courses and in-center on-the-job experience. The franchisor delivers IFT in three parts. IFT is conducted at New Horizons University (NHU) in Tampa, Florida, or the franchisor may deliver classroom training virtually using synchronous and asynchronous technology. By mutual agreement, the franchisor may shorten IFT if franchisees have prior experience in a business similar to the franchised business. All individuals who attend IFT must complete IFT to the franchisor’s reasonable satisfaction. In addition to IFT, the franchisee’s business operating system (BOS) administrator and at least one sales manager, operations manager, and accounting manager must receive access credentials to BOS, which the franchisor will issue after they complete training in the functionality of BOS. The franchisor may offer continuing training as part of the annual conference. Additionally, the franchisor may offer optional training throughout the year in its discretion.
Territory Granted: In determining the boundaries of the territory that the franchisor assigns to franchisees, it considers the general population count on the date that franchisees sign the Franchise Agreement as determined by the latest census data compiled and published by the United States Census Bureau in Washington, D.C. The franchisor describes the boundaries of the territory that encompasses the population by listing zip codes in an exhibit to the Franchise Agreement. Franchisees must locate their center within the territory. Subject to limited exceptions, the franchisor agrees not to provide, or authorize or license any other network member to provide, live instructor-led classroom training identified to the public by the service marks from an affiliate owned or another franchisee-owned center in the territory. The franchise rights are subject to a minimum performance requirement, which the franchisor measures according to the gross revenue of the franchised business during a “measurement period.”
Obligations and Restrictions: While the Franchise Agreement does not specifically require franchisees or their principals to personally participate in the direct operation of the center, it is the franchisor’s intention to select as franchisees only those persons or business entities whose principals plan to actively participate in the daily operations of the center. The franchisor is not seeking franchisees that merely want a passive investment. Franchisees must designate one of the equity owners (owning at least 5% of the outstanding equity) as the franchisee’s primary owner. Franchisees must designate at least one general manager for the center who must devote full time and attention to the day-to-day management, operation and development of the center. Franchisees must (i) engage in all activities within the scope of acting as a computer learning center; (ii) offer for sale all core classes on the master product list (MPL) at any time and may offer any optional classes on the MPL with the franchisor’s prior written approval; (iii) use the specific courseware or eContent that the franchisor identifies; (iv) deliver the MPL classes that franchisees sell only by using the specific delivery systems, methods and technologies that the franchisor designates or approve in writing or identify in the franchise support manual; and (v) offer and sell authorized services.
Term of Agreement and Renewal: The length of the initial franchise term is five years. The franchisor grants franchisees an unlimited number of five-year renewal options if franchisees are in compliance with the Franchise Agreement, which includes meeting the minimum market penetration and minimum performance requirements.
Financial Assistance: If franchisees meet the franchisor’s credit standards, it may finance up to 50% of the initial franchise fee at an interest rate of 10% per annum (or the highest rate permitted by law, whichever is lower), using its standard form initial franchise fee promissory note. Neither the franchisor nor any agent or affiliate of its guarantees any note, lease or obligation that franchisees may enter into with a third party.
Investment Tables:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $25,000 | $150,000 |
| Training | $2,000 | $5,000 |
| Travel and Living Expenses | $2,000 | $5,000 |
| Computer Hardware and Software (including Network Portal) | $50,000 | $115,000 |
| Software Vendor Fees | $0 | $10,000 |
| Furniture and Furnishings | $10,000 | $25,000 |
| Inventory and Supplies | $1,500 | $3,000 |
| Student Courseware Fee | $6,000 | $40,000 |
| Leasehold Improvements | $3,000 | $20,000 |
| Exterior Signs | $2,000 | $5,000 |
| Rent | $5,000 | $20,000 |
| Security Deposits | $2,500 | $20,000 |
| Business Insurance | $1,000 | $4,000 |
| Additional Funds (first 3 months) | $100,000 | $100,000 |
| Training Employees on System | $0 | $10,000 |
| ESTIMATED TOTAL (for startup franchises) | $210,000 | $532,000 |
| Type of Fee | Amount |
|---|---|
| Monthly Continuing Royalty Fee | The monthly continuing royalty fee is the greater of 6% of the monthly gross revenues, or the minimum royalty fee. |
| Monthly Marketing Fee | The monthly marketing fee is the greater of 2% of the monthly gross revenue, or the minimum marketing fee. |
| Marketing Fee – Additional Assessment | The franchisor may impose an additional assessment to fund a specific marketing program if 67% (or 2/3s) of all New Horizons franchisees operating in the United States approve the assessment (with each franchisee having one vote per Franchise Agreement). |
| eLearning Delivery Fee: Online Live | The then-current delivery fee posted on the network portal which at this time is the greater of (i) $600/month or (ii) $1.30 per student per day. |
| eLearning Delivery Fee: Mentored Learning | The then-current delivery fee posted on the network portal which at this time is the greater of (i) $600/month or (ii) $1.30 per student per day. |
| eLearning Delivery Fee: Mentored Learning Content | The then-current delivery fee posted on the network portal which at this time is $30 per student per day. |
| eLearning Delivery Fee: Labs on Demand | The then-current delivery fee posted on the network portal. The fee varies based on type of class, but currently ranges from $7-$41.50 per student per day. |
| eLearning Delivery Fee: Online Anytime | The then-current delivery fee posted on the network portal which at this time is 50% of the suggested retail sales price. |
| Master License Administration Fee | The then-current fee posted on the network portal. The master license administration fee currently ranges from $30 - $50 per student per class depending on the fees that the third party vendor charges the franchisor. |
| Master Processing Fee (the franchisor reserves the right to impose this fee in the future; it is not payable at this time) | On 30 days written notice, the franchisor may offer to sell authorized services to all customers by directing customers to complete transactions on the franchisor’s website. |
| Transfer Fee | $5,000 per Franchise Agreement included in the same event of transfer, or $3,000 per Franchise Agreement included in the same qualified transfer. |
| Public or Private Offering Review Fee in Connection with an Event of Transfer | $20,000 |
| Training (IFT) – After the Center Opens (Later Hires) | An IFT fee is only payable in connection with later hires that do not enroll in an already scheduled IFT class. |
| Initial Sales Training (IST) | The franchisor offers optional online training classes, which the franchisor refers to as initial sales training (IST) to the franchisee’s sales team. If franchisees wish to enroll an account executive, the training fee that it imposes depends on the licensing fee, if any, that the third party vendor charges to access the online training class. At this time, these licensing fees range from $0 - $2,000. |
| BOS Usage Fee – CRM (Customer Relationship Management) | $115/user/month. |
| BOS Usage Fee – FMS (Financial Management System) | $55/user/month. |
| BOS On-Site Training and Data Migration Fees | The BOS training fees and data migration fees are only payable if franchisees request additional support. |
| Audit Fee | Cost of audit (ranges from $1,500 to $3,000) plus interest. |
| Renewal Fee | $7,500 |
| Annual Conference | The franchisor may charge reasonable attendance fees, not to exceed $750 per person. |
| Website Support (applicable only if franchisees request this assistance) | Based on the scope of work that franchisees request and the amount of time that it takes the franchisor’s web developer to complete the work according to the then-current hourly rate posted on the network portal. |
| Subpage Hosting and Development Fee | The franchisor does not impose any fee to set up a franchisee’s subpage initially besides the $150/month subpage hosting fee (subject to annual increase by up to 10% each calendar year). Subpage development fees apply only if franchisees request content changes. |
| On-Site Assistance (applicable only if franchisees request this assistance) | If franchisees request additional on-site assistance from one of the franchisor’s staff members, it may impose the then-current on-site assistance fee, which at this time is $500/day. The franchisor will mutually determine the length of on-site assistance. Additionally, franchisees must reimburse the franchisor for the reasonable travel expenses that it incurs to send its employee to the center, which may include air, hotel, car rental, meals and incidentals. |
| Interest | The franchisor imposes interest on late payments at annual percentage rate (APR) of 10% (or the highest rate permitted by law, whichever is lower). |
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