I contacted club Z from another website because I was interested in a low cost franchise opportunity. This seemed perfect. First they contact you immediately and go over the details of the what to expect, etc. All good so far. The start up fee is $19,500 so of course you want to do your research. They call you about once a week for the first few months then taper off. Professional, polite. Still all good. Here’s where everything collapses.
After you buy into the franchise you realize how the tutoring business works. You’re basically buying the club Z brand for brand recognition hoping they have a footprint large enough in the area that people have heard of them and have trust in this company. Kind of like when you’re buying car insurance the most popular carriers are Geico, All State, State Farm, etc. Club Z has no brand recognition. There really isn’t a company that’s on the tip of everyones tongue when you think “in home tutoring”. That’s the first problem. Ask yourself how many times you’ve heard someone say club Z.
Second, they’re selling you territory only. They are selling you the ability to use their name, which doesn’t count for anything, for nearly $20k and $350/ month. They just go to a map draw a bunch of lines over populated areas and sell it under the guise of a well vetted area. They are literally selling you nothing. Just the ability to use their name, which no ones heard of anyway. The thing that deterred me from doing it on my own was I had no idea how to start a tutoring business.
I thought it was very complicated and inundated with employment laws and managing websites, etc. It’s not complicated at all. Besides you have to do everything on your own anyway. They send you a list of required documents such as insurance, a way to bill people, etc. They also provide a 16 hour training that is split up into 2 days.
The training goes over sales ideas, how to generate leads, how to close a client, etc. That training for someone who hasn’t been exposed to stuff like that I suppose would be a benefit. They go over close ratios and tell you that you only need 16 or 30 phone calls a month in order to make $4-$5k/month. Which is true, but impossible.
The thing is the amount of capital required from Google ad words isn’t worth it for such narrow areas such as only one city. It’s worth for somewhere with a wider scope, such as an entire state, county, or country. They tell you most of your business will come from network connections and the schools in your area. They won’t.
Schools are very regulated especially because of school shootings. Schools don’t do business with outside businesses. A lot of teachers try to do this part time because they think it’s an ideal fit. It isn’t. You’re teaching skills would make you a good tutor not a franchise owner. This is a very difficult sales job. I left a six-figure job to go into this business and intio debt. It all comes down to your phone not ringing. It is impossible to get the required amount of phone calls to convert into sales that cover your expenses and have you making any money.
Let’s go into the fees. You should be getting a some sort of value out of that350 a month right? Wrong. They tell you that you have access to a company call center that handles your inbound calls that will soft close the clients. It’s an extra fee. They also tell you they spend 1 million dollars a year or some crap in nation wide advertising. If they do, it doesn’t work. You have the art department also. Which designs and creates mailers. That was kind if nice. That’s basically it. Your $350 gets you the option to use the call center and access to a graphic designer.
They’re marketing ideas are basically networking with schools, Google, flyers, and road signs. Yes road signs. I have never gotten one call from a road signs and I put up hundreds.
The premise sounds good. If you can make a percentage of other people’s hourly tutoring rate you just multiply the rate by the hours by the number of tutors, come up with an average and with a little bit of hard work suddenly you’re a millionaire?
So here’s the thing. Club Z was a lucrative business up until a few years ago when obama did away with no child left behind. It was order taking. People in low income areas would get free tutoring subsidised by the government. And area directors would get $70 hr guaranteed. Pay their tutor $15 and make profit after the fees. By the way if they tell you your profit margin is 50% that’s wrong it’s closer to 25%. So for every $50 you get $12.50 that you have to pay taxes on. When the government did away with that program, the oil field dried up. There’s honestly no money in this since that program went away.
Sorry guys it’s just not possible. If you don’t believe me I implore you to do a google search of club Z’s not only in your area but in other states BEFORE you sign anything. And before they have their list if the 5 area directors that call you telling you how great it is. When you start talking to people that YOU found you’ll get a better picture of what your dealing with. Most Google maps listing has the area directors phone number and not the call center. Especially if you start looking Nationwide. But don’t buy into this business unless you want to put Marc’s kids through college.
If I even helped one person save $20k I can die happy.