IBISWorld - Tutoring & Test Preparation Franchises in The US - 2019

WWW.IBISWORLD.
COM Tutoring & Test Preparation Franchises in the USMarch 2019 1
Extra credit: Operators will focus on providing

highly qualified staff to combat rising competition
This report was provided to
Edeska (2129455405)
by IBISWorld on 16 October 2019 in accordance with their license agreement with IBISWorld
IBISWorld Industry Report OD5609

Tutoring & Test Preparation
Franchises in the US
March 2019 Heidi Diehl
2 About this Industry 15 International Trade 26 Regulation & Policy

2 Industry Definition 16 Business Locations 26 Industry Assistance
2 Main Activities
2 Similar Industries 18 Competitive Landscape 27 Key Statistics
2 Additional Resources 18 Market Share Concentration 27 Industry Data
18 Key Success Factors 27 Annual Change
3 Industry at a Glance 18 Cost Structure Benchmarks 27 Key Ratios
20 Basis of Competition
4 Industry Performance 20 Barriers to Entry 28 Jargon & Glossary
4 Executive Summary 21 Industry Globalization
4 Key External Drivers
6 Current Performance 22 Major Companies
8 Industry Outlook 22 Kumon North America Inc.
10 Industry Life Cycle 23 Huntington Learning Center
23 Educate Inc.
12 Products & Markets
12 Supply Chain 24 Operating Conditions
12 Products & Services 24 Capital Intensity
14 Demand Determinants 25 Technology & Systems
14 Major Markets 25 Revenue Volatility
www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

WWW.IBISWORLD.COM Tutoring & Test Preparation Franchises in the USMarch 2019 2
About this Industry
Industry Definition This industry offers exam preparation and business, driving, management,
tutoring services. Academic schools, computers, technical and trade areas, fine
colleges and universities are excluded, as arts, athletics and languages. Online-only
are schools that offer instruction in operators are excluded from this industry.
Main Activities The primary activities of this industry are

Tutoring
Exam preparation
The major products and services in this industry are

Exam preparation services
History and social sciences tutoring
Math tutoring
Reading and writing tutoring
Science tutoring
Other services
Similar Industries 61143 Business Coaching in the US

Operators in this industry offer short courses and seminars for management and professional development.
61151 Trade & Technical Schools in the US

Operators in this industry offer vocational and technical training in a variety of technical subjects and trades.
61169 Tutoring & Driving Schools in the US

Operators in this industry provide exam preparation and tutoring services, automobile driving schools and
other miscellaneous educational services.
61171 Testing & Educational Support in the US

Operators in this industry provide noninstructional support services for the educational sector.
Additional Resources For additional information on this industry

www.ntatutor.com
National Tutoring Association
www.rea.com
Research and Education Association Inc.
tutoring.sylvanlearning.com
Sylvan Learning
Provided to: Edeska (2129455405) | 16 October 2019

WWW.IBISWORLD.COM Tutoring & Test Preparation Franchises in the US March 2019 3
Industry at a Glance
Tutoring & Test Preparation Franchises in 2019
Key Statistics Revenue Annual Growth 14–19 Annual Growth 19–24

Snapshot
$1.1bn 1.8% 3.1%
Profit Wages Businesses
$106.4m $445.7m 2,944

Revenue vs. employment growth Per capita disposable income
Market Share
Kumon North 10 4
America Inc.
13.3% 5 2
% change
% change
0 0
-5 -2
-10 -4
Year 11 13 15 17 19 21 23 25 Year 12 14 16 18 20 22 24
Revenue Employment
SOURCE: WWW.IBISWORLD.COM
p. 22
Products and services segmentation (2019)
2.5%
Key External Drivers Other services
Per capita disposable 13.8%
income
History and social sciences tutoring
25.0%
Government funding
for primary and
secondary education
Percentage of services
conducted online 16.4%
Science tutoring
Number of college
students
Number of K-12 students
23.3%
p. 4 19.0%
Math tutoring SOURCE: WWW.IBISWORLD.COM
Industry Structure Life Cycle Stage Mature Regulation Level Light

Revenue Volatility Medium Technology Change Low
Capital Intensity Low Barriers to Entry Low
Industry Assistance Low Industry Globalization Low
Concentration Level Low Competition Level Medium
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 27

Industry Performance
Executive Summary | Key External Drivers | Current Performance
Industry Outlook | Life Cycle Stage
Executive The Tutoring and Test Preparation Despite overall growth, operators
Summary Franchises industry provides students with have contended with escalating
academic tutoring and assistance with competition from online tutoring and test
preparing for tests, such as the SAT and preparation services over the past five
ACT exams, along with more advanced years, which is expected to persist
graduate school admission exams. As moving forward. Online services often
industry services are largely discretionary provide less costly personalized
in nature, poor economic conditions instruction and more flexible schedules
negatively affect consumers’ ability to pay for students and teachers alike.
for them. Over the five years to 2019, Furthermore, online companies are not
industry operators have benefited from limited to a local market; therefore, they
growth in the number of primary school can more efficiently allocate resources to
and college students and rising per capita clients that demand specialized services,
disposable income. Concerns about the such as on-demand help and instruction.
To better compete with online
competitors, industry operators have
Industry
operators have experienced escalating attempted to differentiate their services
competition from online tutoring and test by providing more qualified instructors
and focusing on subjects that are best
preparation services taught in person.
Over the five years to 2024, industry
quality of public education, which have growth is expected to slow as per capita
historically driven demand for tutoring as a disposable income growth slows, causing
supplement to primary education, consumers to seek out lower-cost
increased during the current period. tutoring services or forego tutoring
Moreover, the pressure to gain admission services completely. Moreover, public
to a prestigious college or university school education is starting to be
intensified concern over academic perceived as higher-quality, reducing the
performance, further bolstering demand need for additional tutoring outside of
for the industry. As a result, industry school. However, the pressure to succeed
revenue is forecast to increase at an academically is likely to persist during
annualized rate of 3.1% to $1.1 billion over the outlook period, creating steady
the five years to 2019, including 2.4% demand for industry services. Overall,
growth in 2019 alone. Conversely, profit industry revenue is forecast to grow at an
margins have fallen over the past five years annualized rate of 1.8% to $1.2 billion
due to wages rising as a share of revenue. over the five years to 2024.
Key External Drivers Per capita disposable income services. Per capita disposable income is
Since tutoring and test preparation expected to increase in 2019,
services are largely discretionary in representing a potential opportunity for
nature, household income levels the industry.
influence demand for the industry’s
services. When disposable income rises, Government funding for primary
parents are better able to afford personal and secondary education
tutoring services for their children, and The federal government’s Every Student
adult students are able to spend more Succeeds Act (ESSA), which replaced the
money on tutoring and test preparation No Student Left Behind (NCLB) program

Key External Drivers in 2015, provides funding for the after- Number of college students
continued school tutoring services operators in this A rise in the number of college students
industry provide. Industry operators may increases competition for graduate and
also collaborate with public schools to law school admissions, which increases
provide supplementary education to demand for test preparation services.
students. Overall, government funding Growth in the number of college
for primary and secondary education is students also results in stronger demand
expected to increase in 2019. for tutoring for college and licensing
examinations in other fields. The
Percentage of services conducted online number of college students is expected
The industry excludes companies that increase in 2019.
exclusively offer online tutoring and test
preparation services. As a result, the Number of K-12 students
percentage of services conducted online A rise in the number of kindergarten
is a proxy for external competition from through 12th grade students will
such online services, which are a raise competition for college
substitute for industry offerings. When admission, which has been a growing
the amount of services offered online trend over the five years to 2019. This
increases, the amount of external trend stimulates demand for exam
competition rises, undermining demand preparation and tutoring services, as
for industry services. In 2019, the students try to gain an edge on the
percentage of services conducted online competition. The number of K-12
is expected to increase, representing a students is expected to remain stagnant
potential threat to the industry. in 2019.
Per capita disposable income Government funding for primary and

secondary education
4 6
4
2
2
% change
% change
0
0
-2
-2
-4 -4
Year 12 14 16 18 20 22 24 Year 12 14 16 18 20 22 24

Current Operators in the Tutoring and Test

Preparation Franchises industry provide Industry revenue
Performance test preparation and academic tutoring
8
services to students. Over the five years
to 2019, this industry has benefited from
4
economic expansion. Increased per
capita disposable income enabled more
% change
parents to purchase industry services for 0
their children while low unemployment
resulted in parents having less time to -4
help their children study, further driving
demand for industry services. High -8
disposable income also benefited Year 11 13 15 17 19 21 23 25
industry operators, whose services are
considered discretionary and often more SOURCE: WWW.IBISWORLD.COM
expensive than competing tutoring

services. Moreover, continued concerns result, IBISWorld expects industry
over the quality of public education, the revenue to increase at an annualized rate
pressure for students to succeed of 3.1% to $1.1 billion over the five years
academically and increased federal to 2019, including an anticipated 2.4%
funding benefited industry revenue. As a increase in 2019 alone.
Boosted demand Many students use tutors to better their students, who are anticipated to make up
chances of admission into a preferred an estimated 85.0% of industry revenue
college or university. Over the past five in 2019. Moreover, the unemployment
years, a growing number of high school rate has declined during the current
graduates created intense competition for period. Families with both parents
admission to the top universities in the working full-time have less time to spend
United States. Therefore, this trend has tutoring children. In addition, increased
positively affected demand for tutoring disposable income further enables
and test-preparation services, benefiting parents to pay for industry services.
industry operators. Conversely, a growing Concerns about the quality
number of colleges are making of public education and college
standardized tests an optional preparedness have also driven demand
component of admission, constricting for tutoring as a supplement to primary
demand for these services; however, school education. Federal policy has
these colleges still consider a student’s highlighted these problems with its
academic record. Consequently, students emphasis on testing and accountability in
looking to become more competitive schools. Parents of school-age children
college applicants may seek out academic are increasingly enrolling them in
tutoring services. afterschool tutoring programs to meet
The Tutoring and Test Preparation personal education standards that are
Franchises industry has also benefited sometimes above those delivered by the
from growth in the number of K-12 standard school system.

Competition squeeze The industry has contended with

escalating competition from online The
industry has
tutoring and test preparation services
over the five years to 2019. Online
contended with escalating
services can provide less expensive competition from online
personalized instruction and more tutoring
flexible schedules for students and
teachers alike. Since online companies
are not limited to a local market, they can emphasis on teacher quality has caused
capture a larger market that is not limited wages to increase at an annualized rate of
by distance. Online competitors can also 4.5% to $445.7 million; however, the
teach more students with fewer teachers. industry has continued to favor the
These circumstances enable online traditional approach of part-time
tutoring providers to charge lower prices employment, keeping the average wage
than industry operators. To remain relatively low at $12,884. Wages as a
competitive, industry operators focused share of revenue increased over the past
on differentiating their services by hiring five years, which cut into profit margins.
higher-quality tutors and focusing on As result, industry profit, measured as
tutoring for subjects that are best taught earnings before interest and taxes,
in person, such as math and the physical decreased from 9.9% of revenue in 2014
sciences. Over the past five years, to 9.4% in 2019.
Benefits of As prospective business owners have years. Franchises offer lower prices due
franchising grown warier of making the potentially to their ability to purchase in bulk. For
risky move of opening their own example, operators receive educational
independent businesses, they have support materials through their
turned to proven business models, such franchises at much lower prices than they
as those of operators in the Tutoring and would receive if they operated
Test Preparation Franchises industry. independently. In addition, operators do
These operators come with a complete not have to spend time marketing their
business strategy and a recognizable services, making franchises beneficial.
brand, such as Kumon North America Consequently, the number of industry
Inc. or Sylvan Learning Inc. National establishments is expected to increase at
brand recognition has made franchises an annualized rate of 2.3% to 3,390
increasingly popular over the past five locations over the five years to 2019.

Industry Improving economic conditions and

rising student enrollment are expected to
to impede industry expansion.
Furthermore, improved public education
Outlook propel the Tutoring and Test Preparation will likely reduce demand for industry
Franchises industry forward over the five services as well. Nonetheless, positive
years to 2024. Moreover, a reduced but drivers will likely outweigh rising
still opened access to credit is expected to competition during the outlook period.
encourage new franchises to open. Over the five years to 2024, industry
However, the continued movement revenue is expected to increase an
toward online-only services is anticipated annualized 1.8% to $1.2 billion.
Demand expansion As the US economy continues to

strengthen, demand for industry services is Parentshave been
expected to rise. Access to credit, which
enables people to take out loans and open
enrolling their children
new franchises, is forecast to rise over the in tutoring programs at
next five years; per capita disposable younger ages
income is projected to rise as well.
However, both drivers are forecast to grow
at a slower rate over the next five years ages to ensure academic success. Industry
compared with their growth over the five player Kumon North America Inc., for
years to 2019. Additionally, the national example, has attributed the success of its
unemployment rate is anticipated to rise preschool program to its strong enrollment
as economic expansion enables some growth. Over the five years to 2024, the
families to return to being single- number of K-12 students is expected to
income households. increase an annualized 0.2%. This
In addition to favorable economic growth, coupled with the rising enrollment
conditions, demand for educational of younger students, is expected to
support services is expected to benefit from benefit industry operators that cater to
continued enrollment growth in younger markets.
elementary and secondary schools, as well Furthermore, the industry is projected
as in colleges and universities. The number to expand over the next five years in
of college students is forecast to grow at an response to strong demand and plentiful
annualized rate of 1.2% over the five years market opportunities. The number of
to 2024 to total 22.3 million students, establishments is forecast to rise at an
intensifying competition for college annualized rate of 1.9% to 3,732 locations
admissions. Heightened competition will over the next five years. Following the same
likely drive demand for industry services as growth pattern as industry revenue,
students continue to seek out ways to establishment growth is forecast to be
improve their college applications. slower than it was over the past five years
Additionally, academic performance is as overall economic conditions stabilize.
critical for college admissions, encouraging Wage growth is expected to slow as well,
students to seek out personalized tutoring only increasing an annualized 1.6% to
for their weakest subjects. $483.6 million over the five years to
Parents have also been enrolling their 2024 as high-quality tutors saturate the
children in tutoring programs at younger labor market.

Competition Online companies developing study tools

to compete with industry offerings will The
growing number of
pressuring
profitability limit demand growth for tutoring services, industry franchises will
as internet-based tutoring services are
often less expensive and offer similar result in more competition
services. Furthermore, online tutoring
companies contend with lower rent costs preparation services, though continued
and can operate with fewer tutors reliance on part-time employees is
compared with tutoring franchises. expected to slow total spending on wages.
Moreover, online tutoring offers greater Industry employment is forecast to grow
flexibility and convenience. Consequently, at an annualized rate of 1.6% to 37,455
industry operators will be forced to workers over the five years to 2024.
provide more value-added services to Although tutoring companies are likely
justify higher prices and focus on markets to contend with increasing competition
that are underserved by online tutoring. during the outlook period, operators’
The growing number of industry efforts to justify higher prices are expected
franchises will likely result in increased to pay off. Conversely, wages as a share of
competition from similar tutoring and test revenue are forecast to decline. As a result,
preparation businesses as well. profit, measured as earnings before
Meanwhile, the industry is anticipated to interest and taxes, is expected to increase
boost hiring to sway clients from choosing only marginally to account for 9.5% of
depersonalized online tutoring and test revenue in 2024, up from 9.4% in 2014.
Potential challenges More colleges and universities are aiming for the top universities may still
becoming test-optional or test-flexible, consider additional test-preparation
meaning they do not require, or de- tutoring services, while students who are
emphasize, the Scholastic Assessment planning on applying for test-flexible
Test (SAT) or American College Testing schools may not opt for the same services.
(ACT) exams. Furthermore, certaom Additionally, many tutoring franchises
colleges do not require SAT scores at all, provide tutoring services for K-12
while others will waive the requirement students. However, as public schools
for students who meet certain criteria, provide better education and government
such as a minimum GPA or class rank. funding for primary and secondary
However, most top-tier schools still education increases, parents may
require, and heavily consider, these opt for after-school programs over
admissions exams. As a result, students industry services.

Life Cycle Stage The market for tutoring and test
preparation is expanding slowly
There is relatively little technological change
The industry’s contribution to the economy
is in line with overall economic growth

Industry Life Cycle The Tutoring and Test Preparation advancement is relatively low, leading to
Franchises industry is in the mature the industry’s life cycle stage
stage of its life cycle. Over the 10 years to classification of mature.
Thisindustry 2024, industry value added (IVA), which The market for industry services is
is M
ature measures the industry’s contribution to expanding slightly as student enrollment
the overall economy, is expected to rise at rises in primary and secondary
an annualized rate of 2.9%. Meanwhile, education. Similarly, as the economy
US GDP is projected to grow an continues to expand, the number of
annualized 2.1% during the same period. college students is forecast to increase as
Although this growth rate is quicker than well. In addition, these markets
that of GDP, operators benefit from are expected to be better able to
wholehearted market acceptance of afford industry services as disposable
industry services and technological income improves.

Products & Markets

Supply Chain | Products & Services | Demand Determinants
Major Markets | International Trade | Business Locations
Supply Chain KEY BUYING INDUSTRIES

61111a Public Schools in the US
Under NCLB, many public schools are required to offer students free tutoring.
61111b Private Schools in the US
Schools often provide tutoring on an as-needed basis for students.
61131a Colleges & Universities in the US
Universities provide tutoring services for students to supplement lectures.
61131b For-Profit Universities in the US
Universities provide tutoring services for students to supplement lectures.
9901 Consumers in the US
Consumers use this industry for tutoring services and preparation for standardized
examinations.
KEY SELLING INDUSTRIES

44312 Computer Stores in the US
Computer hardware and software are used for training and administrative services provided by
this industry.
45121 Book Stores in the US
Teachers and students use books in studying.
45321 Office Supply Stores in the US
Tutoring and test prep franchises use stationery and office supplies.
53112 Commercial Leasing in the US
Tutoring and test preparation businesses generally rent office or retail space in which to teach
classes.
Products & Services Products and services segmentation (2019)
2.5%
Other services
13.8%
History and social sciences tutoring 25.0%
16.4%
Science tutoring
23.3%
19.0%
Math tutoring
Total $1.1bn SOURCE: WWW.IBISWORLD.COM
Exam preparation services industry in 2019. This segment includes

Exam preparation serves are anticipated services that offer preparation for college
to account for 25.0% of revenue for the entrance exams and professional
Tutoring and Test Preparation Franchises examinations. Over the five years to

Products & Markets
Products & Services 2019, this segment has grown as a result, this segment has expanded as a
continued percentage of industry revenue as an share of revenue over the past five years.
increasing number of students prepare
for standardized testing and compete for Math tutoring
college admission. K-12 students Tutoring for math is estimated to account
generally use exam preparation services for a significant 19.9% of revenue in 2019.
for the Scholastic Assessment Test (SAT), This segment is especially popular as
American College Testing (ACT) exams math skills are used across a variety of
and other placement exams for college disciplines. Additionally, many major
classes. College students use industry players, like Kumon, focus on reading,
services for graduate school admissions writing and math tutoring to help
exams such as the GMAT, LSAT and students develop basic skills in these
MCAT exams. disciplines. This segment has grown as
a share of revenue over the past five
History and social sciences tutoring years as math tutoring, like science
History and social sciences tutoring is tutoring, is difficult to deliver through
expected to account for an estimated online platforms.
13.8% of revenue in 2019. This segment
includes subjects such as US history, Reading and writing tutoring
political science, economics and world Tutoring for reading and writing is
history. Students may seek out tutoring estimated to account for a sizable 23.3%
services related to these subjects to better of industry revenue in 2019. This
perform in their social studies classes in segment has grown as a share of revenue
school. Students taking Advanced over the past five years as reading and
Placement (AP) courses like AP US writing skills are standard offerings at
History, AP Government and Politics or most industry franchises, and all
AP Macroeconomics may seek out demographics seek out tutoring in
class-specific tutoring services to ensure reading and writing (while AP-course
their preparedness for the AP exam. This specific tutoring is often limited to high
segment has remained stable as a share school students). Moreover, this segment
of revenue. has grown as reading and writing
tutoring services are especially helpful
Science tutoring for students whose first language was
Science tutoring accounts for an not English.
estimated 16.4% of industry revenue in
2019 and includes tutoring for classes in Other services
the hard sciences like physics and Other tutoring services include tutoring
chemistry, life sciences like biology and for specific topics such as finance
other sciences like ecology and the and accounting. This segment accounts
environmental sciences. Like other for just 2.5% of revenue in 2019 and
subject-specific tutoring services, has remained stagnant as a source
students seeking out science tutoring of revenue. Moreover, students
often require extra help for the AP seeking out tutoring for miscellaneous
courses in the sciences. This segment tutoring are more likely to use online
contends with less competition from courses as online tutoring services
online tutoring services as the hard offer more variety compared with
sciences are better taught in person. As tutoring franchises.

Products & Markets
Demand Disposable income Number of college students

Determinants Per capita disposable income is key to As the number of college students
determining demand for the Tutoring increases, competition to gain admission
and Test Preparation Franchises into a selective college or university
industry. As disposable income increases, increases. Additionally, an increase in the
more consumers are able to afford number of college students indicates a
additional tutoring and test preparation larger share of the population will have a
services, which are discretionary. college degree, increasing competition in
However, when disposable income is low, gaining employment. Increased
consumers will seek less costly test competition puts pressure on students to
preparation alternatives, such as online perform well in their classes and on their
programs and services. standardized tests, driving demand for
industry services. The number of college
Government assistance and policy students has increased over the five years
Government funding for education is an to 2019.
important determinant of demand for
industry services. During times of low Online resources
government funding for education, The continued movement to online
individuals will seek tutoring and test services is increasingly siphoning
preparation services to supplement demand from in-person tutoring and test
available education at public schools. preparation services. Online tutoring and
However, when government funding for online test preparation resources are
education is high, schools and becoming much more accessible and are
universities will provide more posing a threat to the industry, especially
individualized tutoring services, which as the quality and specificity of these
may reduce the need for consumers to services increases. As the percentage of
find outside help. Since funding for services conducted online grows,
education is largely determined at the consumers will turn to online services for
state and municipal levels, this factor supplementary tutoring, undermining
varies significantly on a regional basis. demand for the industry.
Major Markets K-5 students Middle school students

K-5 students represent the largest market Middle school students, categorized as
for services offered by the Tutoring and being in 6th through 8th grade, make up
Test Preparation Franchises industry, 10.5% of industry revenue in 2019. This
accounting for an estimated 51.7% of segment has grown marginally over the
revenue in 2019. Over the five years to past five years as the pressure to succeed
2019, this market has remained steady as academically and gain admission to a
a source of revenue as more parents seek selective college intensified, driving
industry services to supplement their parents to turn to industry services to
child’s education. Major operators, such help their middle schoolers gain an
as Kumon North America Inc., focus on early advantage.
students in this demographic and uses
the Kumon method to teach reading and High school students
math skills. These students focus on basic High school students, defined as students
reading and writing skills as these skills in 9th through 12th grade, make up
are used in many other subjects. 22.8% of industry revenue in 2019. This

Products & Markets
Major Markets Major market segmentation (2019)

continued
10.5%
Middle school students
15.0%
College students
51.7%
Elementary school students
22.8%
High school students
Total $1.1bn SOURCE: WWW.IBISWORLD.COM
demographic heavily uses industry College students

test-preparation services in efforts College students represent 15.0% of the
to improve their standardized test industry’s revenue in 2019. Over the past
scores and AP-subject test scores. five years, this market has declined as a
This market has grown as a share of percentage of industry revenue as online
revenue as competition for college resources have increasingly become
admissions increased, driving available to college students. These
students to use industry services to students use exam preparation services
supplement their education. Although for standardized testing related to
more colleges are becoming test- graduate school applications for business
optional, almost all colleges still school, law school, medical school and
consider high school performance other graduate programs. While some
and course difficulty, driving students college students use the industry’s private
to take Advanced Placement (AP) tutoring services, on-campus tutoring
classes even if they opt out of the SAT services are offered through universities,
or ACT exam. reducing demand from this market.
International Trade Due to the service-based nature of the tutors by companies to provide services
Tutoring and Test Preparation Franchises to students in the United States is not
industry, it does not partake in considered relevant to the industry. As a
international trade. Furthermore, result, only revenue from services
because online services are not included provided within the United States is
in this industry, the use of international included in this industry.

Products & Markets
Business Locations 2019
West
AK
0.0 New
England
ME
Great Mid- 0.3
Lakes Atlantic 1 2
NY 3
WA MT ND 9.1
5 4
2.8 0.1 MN
Rocky
0.3 1.3
WI
OR Mountains SD
0.2
Plains 1.1 MI
2.0
PA
2.6
6
7
1.3 ID IA OH 9 8
0.2 WY 2.4
0.1
NE
0.5
IL IN WV VA
4.1 1.3 2.9
West NV
0.3 0.2
KY
UT MO
0.7 NC
0.6
0.5 CO KS 1.0 2.6
2.0 0.5 TN
SC
Southeast
1.2
CA 0.9
20.4
OK AR GA
0.8 0.5 AL 4.2
AZ MS 0.8
1.5 NM
0.4 Southwest 0.4
TX LA
0.9 FL
7.4 6.3
West Establishments (%)
HI Less than 3%
0.7 Additional States (as marked on map) 3% to less than 10%
1 VT 2 NH 3 MA 4 RI 10% to less than 20%
0.3 0.4 2.6 0.3 20% or more
5 CT 6 NJ 7 DE 8 MD 9 DC
1.3 5.2 0.3 2.3 0.4

Products & Markets
Business Locations The geographic spread of the Tutoring

Distribution of establishments vs. population
and Test Preparation Franchises industry
is consistent with the population
30
distribution in the United States;
establishments are generally located in
heavily populated regions. Industry 20
operators tend to be located closer to
areas with many academic institutions.
%
The highest concentrations of 10
establishments are in the West, the
Southeast and the Mid-Atlantic regions.
The West has the largest share of 0
establishments in this industry,
West
Great Lakes
Mid-Atlantic
New England
Plains
Rocky Mountains
Southeast
Southwest
accounting for 25.8% of all locations. The
majority of establishments in this region
are located in California, which is home
to a high number of academic Establishments
institutions. California alone accounts for Population
20.4% of establishments. SOURCE: WWW.IBISWORLD.COM
Though the Southeast is, on average,

poorer than the West and the Mid- establishments are located in areas with
Atlantic regions of the United States, its higher disposable income. Higher
sheer population size helps to explain its disposable income in the Mid-Atlantic
large share of industry establishments. contributes to a larger concentration of
The region is home to 21.5% of total industry revenue in the region. The
establishments, which is slightly below region accounts for 19.9% of revenue
its share of the country’s total population establishments. The Mid-Atlantic region
of 25.7%. also has a notably larger proportion of
Demand for tutoring and test employees than establishments,
preparation is also influenced by per indicating that the average operator in
capita disposable income. Thus, more this region is larger.

Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks
Basis of Competition | Barriers to Entry | Industry Globalization
Market Share The Tutoring and Test Preparation number of industry enterprises is
Concentration Franchises industry has low market expected to grow at an annualized rate
share concentration, with the three of 2.5% to reach 2,944 businesses over
largest companies accounting for an the five years to 2019. Industry
Level
estimated 21.2% of total revenue in operators that specialize in tutoring
Concentration in 2019. The industry has many similar- services are slightly more fragmented,
this industry is L ow sized operators that cater to the US and some operators serve a specific
market. Low barriers to entry and geographic region. However, due to the
increasing demand for test preparation nature of standardized testing, operators
services are encouraging new operators that specialize in test preparation tend
to enter the industry. As a result, the to serve a wider region.
Key Success Factors Understanding government factor is particularly important in exam

policies and their implications preparation and tutoring.
Establishments need to know how they
IBISWorld identifies can benefit from various government Having a high profile in the market
250 Key Success policies on education, most importantly Establishments with a high profile may
Factors for a the No Child Left Behind Act. find it easier to attract students.
business. The most
Having a high prior success rate Having a good reputation
important for this
(including completed prior contracts) To attract students, establishments
industry are: Establishments that have a high success in this industry must have a good
rate for formers students will find it reputation for the quality of
easier to attract new students. This training provided.
Cost Structure Profit Wages have increased at an annualized

Benchmarks Profit, measured as earnings before rate of 4.5% over the five years to 2019,
interest and taxes, for the Tutoring and as operators hired more qualified tutors
Test Preparation Franchises industry is to better compete with online tutoring
estimated to account for 9.4% of revenue services. Although wages have increased
in 2019, down from 9.9% in 2014. as a share of revenue, the majority of
Compared with the entirety of the workers are part-time instructors,
education sector, which is largely run on resulting in a low average wage of
a nonprofit basis, this is relatively high. $12,884 per year.
However, profit margins were
constrained by rising wage costs over the Purchases
past five years. Companies are expected to spend an
estimated 10.6% of industry revenue on
Wages purchases in 2019, down from 11.1% in
The industry is service oriented, and a 2014. Franchised establishments benefit
large portion of revenue is dedicated to from buying most materials from the
wages as a result. IBISWorld estimates larger franchise of which they are a part.
that wages will account for 39.4% of This helps reduce purchases costs
revenue in 2019, up from 36.7% in 2014. because franchise organizations are able

Cost Structure to procure supplies in bulk. Many Marketing

Benchmarks tutoring franchises use low-cost supplies, Marketing costs make up 3.0% of
keeping purchase costs low, while a industry revenue. Companies spend a
continued
larger amount of information can be significant amount on marketing
distributed online, further restricting campaigns to win over students and to
purchase costs. advertise the potential benefits of
tutoring services. Many reach out to
Rent and utilities school counselors, teachers and parents
Expenditure on rent and utilities, to garner as much business as possible.
estimated to account for 8.9% of industry Additionally, franchisees pay a
revenue in 2019, are significant because franchising fee, a portion of which is
industry operators require physical dedicated to marketing the parent
locations to deliver tutoring and test company’s brand.
preparation in person. Franchise owners
are often required to cover their own rent Other costs
and utilities costs. Rent prices have Depreciation, legal fees and
increased over the past five years, causing administrative expenses make up the
this share of revenue to increase as well. majority of the remain expenses in this
Rent expenses also include property taxes industry. Overall, these costs are
and insurance. Industry franchises rely relatively steady as a share of revenue
on having adequate space to teach from year-to-year because industry
students, keeping this segment’s share of operators can anticipate them ahead of
revenue consistently high. time. Depreciation costs are estimated to
Sector vs. Industry Costs
Average Costs of
all Industries in Industry Costs
sector (2019) (2019)
100
3.8 9.4
n Profit
n Wages
n Purchases
80 n Depreciation
n Marketing
49.3 39.4 n Rent & Utilities
n Other
Percentage of revenue
60
5.2 10.6
40 5.4 3.2 3.0
1.9
7.9 8.9
20
26.5 25.5
0

Cost Structure total 3.2% of revenue in 2019 and has

Benchmarks fluctuated over the past five years as
operators consider more investment
continued
in technology.
Basis of Competition Internal competition tutoring curriculum that is specific for

Operators in the Tutoring and Test college preparation.
Preparation Franchises industry compete Competition among the test
Level & Trend heavily on quality. Industry franchises preparation segment is higher due to the
ompetition
C in must establish a reputation for quality, standardized nature of the industry.
this industry is which is highly attractive to students Students will seek the industry operator
Mediumand the looking for direct results from test with the highest reputation for success
preparation. At the same time, parents and the highest results for important
trend is I ncreasing
that seek tutoring services for their K-12 standardized tests, such as the SATs and
children also consider a company’s ACTs, for K-12 students.
reputation when investing in the future
of their children. As a result, industry External competition
operators must hire highly skilled The industry is contending with
employees that are experts in the fields increasing competition from companies
that they tutor. Also, instructors must be that provide tutoring and test
highly proficient in effectively teaching preparation services solely online.
their respective subjects. Online tutoring has become more
Industry operators also compete on popular over the five years to 2019, and
the basis of personalization in their poses a threat to traditional tutoring and
tutoring services. For example, some test preparation services. At the same
tutoring services will help children time, more online courses have become
progress at their own rate and include available for test preparation and for all
self-learning activities to foster kinds of standardized testing. These
independent thinking skills. online interactive courses provide a
Additionally, some operators cost-effective and time-saving alternative
differentiate their services by designing for students with limited resources.
Barriers to Entry The Tutoring and Test Preparation

Franchises industry has low barriers to Barriers to Entry checklist
Level & Trend entry. The most significant barrier to entry Competition Medium
is competition among industry operators Concentration Low
arriers to Entry
B that already have an established Life Cycle Stage Mature
in this industry are reputation for quality. Franchises in this Capital Intensity Low
Lowand I ncreasing industry rely on their name brand and Technology Change Low
reputation to attract students investing in Regulation and Policy Light
their education. However, individual Industry Assistance Low
operators are able purchase franchise
rights with relative ease and are able to SOURCE: WWW.IBISWORLD.COM
benefit from the company’s established

reputation as a result.

Barriers to Entry Capital investment required to start a the largest portion of industry costs
continued tutoring or test preparation franchise is are related to wages. IBISWorld
relatively low. Besides spending on rent estimates that spending on wages will
and utilities, as well as the purchase of amount to 39.4% of industry revenue
some computer equipment and software, in 2019.
Industry The Tutoring and Test Preparation locations in countries across the world.
Globalization Franchises industry has a low level of However, due to the personalized service
globalization. Some industry operators nature of the industry and the
Level & Trend have establishments in several other differences in standardized testing
countries. One of the major players in among countries, the majority of
lobalization
G in this the industry, Kumon North America industry enterprises are based in the
industry is L owand Inc., is based in Japan and has United States.
the trend is S teady

Major Companies
Kumon North America Inc. | Other Companies
Major Players
(Market Share)
86.7%
Other
Kumon North America Inc. 13.3% SOURCE: WWW.IBISWORLD.COM
Player Performance Founded in 1958 in Japan, Kumon North franchise in the afterschool education
America Inc. (Kumon) predominantly industry by Entrepreneur Magazine for
provides tutoring for mathematics and over a decade.
Kumon North reading, operating in more than 49
America Inc. countries across the world. Kumon has Financial performance
Market Share: 13.3% been operating in North America for Over the five years to 2019, Kumon’s
more than four decades; the first Kumon industry-relevant revenue is expected to
center was opened in New York City in increase at an annualized rate of 3.1% to
1974. As of 2018, there are an estimated $151.1 million, making the company the
1,502 individually owned and operated largest industry-specific franchiser in the
centers in the United States (latest United States. Over the past five years,
data available). Kumon has benefited from its strong
The majority of Kumon centers brand recognition for quality and results.
are individually owned and operated Coupled with the increasingly
through a franchise system, though the competitive environment for college
company owns 27 locations. Franchisee admission, with many parents willing to
instructors are certified to teach the pay for tutoring to give their children an
Kumon method after undertaking a advantage at a young age, the company
company-training course. Franchising has experienced consistent growth in its
agreements span a period of five years tutoring revenue for K-12 students.
and are renewable at the end of the term. Kumon is expected to continue to grow
Kumon has been named the leading moving forward.
Kumon North America Inc. (US industry-specific segment) - financial

performance*
Revenue Operating Income
Year** ($ million) (% change) ($ million) (% change)
2014-15 129.9 N/C 15.0 N/C
2015-16 138.4 6.5 15.0 0.0
2016-17 147.5 6.6 16.6 10.7
2017-18 143.4 -2.8 16.6 0.0
2018-19 146.0 1.8 17.2 3.6
2019-20 151.1 3.5 16.9 -1.7
*Estimates; **Year-end March

SOURCE: ANNUAL REPORT AND IBISWORLD

Major Companies
Other Company Educate Inc. (Educate) provides tutoring while also offering test preparation
Performance and other supplemental educational services for college entrance exams.
services to children from K-12 schools Through its Catapult Learning segment,
and learning centers. The company’s Educate provides tutoring and other
Educate Inc. Sylvan Learning Inc. (Sylvan) subsidiary supplemental education services to
Market Share: 4.2% was founded in 1979, and provides students in public and private schools
tutoring services at 487 centers in the through government-funded contracts.
United States, as well as over the In 2019, the company is estimated to
internet. Sylvan provides tutoring in generate $47.5 million in industry-
reading, writing, math and study skills, relevant revenue.
Other Company Established in 1977, Huntington of various ages. The company also
Performance Learning Center (Huntington) opened its provides subject-specific tutoring,
first location in Oradell, NJ. Today, ranging from algebra to physics.
Huntington has nearly 255 franchises Furthermore, Huntington provides exam
Huntington across the United States. The company preparation courses for K-12 students,
Learning Center has been accredited by the Middle States including test preparation for SATs,
Market Share: 2.3% Association of Colleges and Schools since ACTs, advanced placement courses and
1996. Huntington provides tutoring for other pre-university exams. In 2019, the
academic skills in reading, writing, company is expected to generate $26.2
mathematics and vocabulary for students million in industry-relevant revenue.

Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility
Regulation & Policy | Industry Assistance
Capital Intensity The Tutoring and Test Preparation

Franchises industry has a low level of Capital Intensity
Capital units per labor unit
capital intensity. For every $1.00
Level
spent on labor in 2019, industry 0.5
The levelof capital operators will invest an estimated $0.08
intensity is L ow on capital equipment. Capital 0.4
investment in this industry, as with 0.3

other education related industries, is
largely limited to computer software to 0.2
compliment in-person tutoring. In 0.1

addition to facilitating learning,
computer software enables larger 0.0
Economy Educational Tutoring & Test
operators to automate test delivery and Services Preparation
Franchises
grading services, slightly reducing their Dotted line shows a high level of capital intensity
requirements for labor. Although capital SOURCE: WWW.IBISWORLD.COM
investment increased marginally over

the five years to 2019, capital intensity As with most industries in the
remained stable as wage costs increased education sector, wages and salaries
in tandem. account for a high proportion of industry

Capital Intensity revenue. In 2019, wages are estimated to test preparation services tend to be
continued account for 39.4% of industry revenue, former students that have already
whereas depreciation is expected to successfully completed the test for
account for just 3.2% the same year. which they are teaching. While the
While the capital intensity of enterprises development new test preparation
varies based on the type of services and tutoring services via computer-
offered, teaching is done on a face-to- based programs may complement
face basis, which is unlikely to change. industry services, labor will remain a
Industry operators must hire highly critical component moving forward.
educated employees with appropriate This is especially so because online-
accreditation to tutor students. only operators are excluded from
Additionally, employees that provide this industry.
Technology & Systems The Tutoring and Test Preparation of industry services involves a classroom
Franchises industry has a low level of setting and does not require a high level
Level technological change. As the industry of technology beyond standard computer
does not include online-only tutoring equipment and software. Nonetheless,
The level
of services, the nature of industry services industry operators are increasingly using
technology has remained labor intensive during the computers and software that can
change is L ow past five years, and will continue to administer practice tests and provide
remain so moving forward. The majority immediate feedback.
Revenue Volatility The Tutoring and Test Preparation 1.9% in 2017. Fluctuations in industry
Franchises industry has experienced a revenue largely follow trends in per
moderate level of revenue volatility over capita disposable income as consumers
Level
the five years to 2019. During the current are more likely to purchase tutoring and
The level
of volatility period, revenue increased as much as test preparation services when disposable
is M
edium 7.2% in 2016 and declined as much as income rises, as these services are

Revenue Volatility discretionary. However, this industry has government funding of education can
continued contended with growing competition affect the quality and availability of
from online tutoring services which afterschool services and tutoring
contributed to revenue volatility. resources provided by public schools.
Changes in government policy and Moreover, the extent to which industry
funding introduce a moderate level of programs qualify for government
variability and therefore risk for industry financial aid varies and will affect
operators. Changes in the level of revenue volatility.
Regulation & Policy The Tutoring and Test Preparation technology engineering and math)
Franchises industry contends with a low afterschool programs, which may be
level of regulation. In general, industry provided by industry operators, and
Level & Trend operators are able to function with public schools. Additionally, ESSA
he level of
T considerable independence and permitted states to reserve up to 3.0% of
Regulation is autonomy. Industry operators are not school funding for student support
Lightand the required to participate in accreditation services, such as tutoring. Additionally,
programs, although some do to establish as changes to required testing regulation
trend is S
teady
and maintain a good reputation. increases the use of the SAT and ACT
The Every Student Succeeds Act exams by public schools, industry
(ESSA) aimed to increase the frequency operators may experience increased
of collaborations between STEM (science demand for test preparation services.
Industry Assistance The Tutoring and Test Preparation “high-quality academic tutoring” if the
industry has a low level of industry state compiles a list of qualified tutors
assistance. Tutoring and supplemental with demonstrated success in improving
Level & Trend education services providers can receive student academic achievement.
he level of
T federal funding under the Every Student Several industry associations also
Industry Assistance Succeeds Act (ESSA), which replaced the provide assistance to industry operators.
is L owand the No Child Left Behind (NCLB) act. The act For example, the National Tutoring
states that parents can choose free Association and Education Industry
trend is S teady
tutoring services if their child attends a Association provide information,
school that needs improvement. professional development and
Additionally, the act permits states to advocacy services for their members in
reserve up to 3.0% of Title I funding for this industry.

Key Statistics
Industry Data Industry Per capita dis-
Revenue Value Added Establish- Wages Domestic posable income
($m) ($m) ments Enterprises Employment Exports Imports ($m) Demand ($)
2010 1,036.0 519.1 2,773 2,228 38,268 -- -- 395.8 N/A 54.9
2011 1,082.3 541.3 2,871 2,309 41,034 -- -- 400.5 N/A 54.8
2012 1,051.7 502.2 3,056 2,525 38,591 -- -- 377.0 N/A 55.1
2013 978.8 460.9 2,949 2,517 35,037 -- -- 353.2 N/A 55.4
2014 973.0 483.7 3,026 2,602 32,615 -- -- 357.2 N/A 55.6
2015 1,025.8 508.1 3,120 2,695 32,187 -- -- 383.0 N/A 55.8
2016 1,100.1 548.5 3,176 2,748 33,059 -- -- 417.6 N/A 55.9
2017 1,079.7 560.1 3,259 2,823 33,629 -- -- 431.6 N/A 55.9
2018 1,105.5 578.0 3,316 2,877 34,116 -- -- 438.7 N/A 55.9
2019 1,132.4 589.4 3,390 2,944 34,597 -- -- 445.7 N/A 55.9
2020 1,157.8 599.9 3,452 2,999 35,086 -- -- 452.8 N/A 56.1
2021 1,180.4 610.9 3,526 3,064 35,654 -- -- 460.4 N/A 56.2
2022 1,200.1 620.1 3,596 3,126 36,245 -- -- 468.1 N/A 56.4
2023 1,219.9 630.1 3,664 3,186 36,863 -- -- 476.0 N/A 56.5
2024 1,238.6 641.0 3,732 3,246 37,455 -- -- 483.6 N/A 56.6
Annual Change Industry Establish- Domestic Per capita dis-

Revenue Value Added ments Enterprises Employment Exports Imports Wages Demand posable income
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
2011 4.5 4.3 3.5 3.6 7.2 N/A N/A 1.2 N/A -0.2
2012 -2.8 -7.2 6.4 9.4 -6.0 N/A N/A -5.9 N/A 0.5
2013 -6.9 -8.2 -3.5 -0.3 -9.2 N/A N/A -6.3 N/A 0.5
2014 -0.6 4.9 2.6 3.4 -6.9 N/A N/A 1.1 N/A 0.4
2015 5.4 5.0 3.1 3.6 -1.3 N/A N/A 7.2 N/A 0.4
2016 7.2 8.0 1.8 2.0 2.7 N/A N/A 9.0 N/A 0.2
2017 -1.9 2.1 2.6 2.7 1.7 N/A N/A 3.4 N/A 0.0
2018 2.4 3.2 1.7 1.9 1.4 N/A N/A 1.6 N/A 0.0
2019 2.4 2.0 2.2 2.3 1.4 N/A N/A 1.6 N/A 0.0
2020 2.2 1.8 1.8 1.9 1.4 N/A N/A 1.6 N/A 0.4
2021 2.0 1.8 2.1 2.2 1.6 N/A N/A 1.7 N/A 0.2
2022 1.7 1.5 2.0 2.0 1.7 N/A N/A 1.7 N/A 0.4
2023 1.6 1.6 1.9 1.9 1.7 N/A N/A 1.7 N/A 0.2
2024 1.5 1.7 1.9 1.9 1.6 N/A N/A 1.6 N/A 0.2
Key Ratios Imports/ Exports/ Revenue per Share of the

IVA/Revenue Demand Revenue Employee Wages/Revenue Employees Average Wage Economy
(%) (%) (%) ($’000) (%) per Est. ($) (%)
2010 50.11 N/A N/A 27.07 38.20 13.80 10,342.85 0.00
2011 50.01 N/A N/A 26.38 37.00 14.29 9,760.20 0.00
2012 47.75 N/A N/A 27.25 35.85 12.63 9,769.12 0.00
2013 47.09 N/A N/A 27.94 36.09 11.88 10,080.77 0.00
2014 49.71 N/A N/A 29.83 36.71 10.78 10,952.02 0.00
2015 49.53 N/A N/A 31.87 37.34 10.32 11,899.21 0.00
2016 49.86 N/A N/A 33.28 37.96 10.41 12,631.96 0.00
2017 51.88 N/A N/A 32.11 39.97 10.32 12,834.16 0.00
2018 52.28 N/A N/A 32.40 39.68 10.29 12,859.07 0.00
2019 52.05 N/A N/A 32.73 39.36 10.21 12,882.62 0.00
2020 51.81 N/A N/A 33.00 39.11 10.16 12,905.43 0.00
2021 51.75 N/A N/A 33.11 39.00 10.11 12,913.00 0.00
2022 51.67 N/A N/A 33.11 39.01 10.08 12,914.88 0.00
2023 51.65 N/A N/A 33.09 39.02 10.06 12,912.68 0.00
2024 51.75 N/A N/A 33.07 39.04 10.04 12,911.49 0.00
Figures are in inflation-adjusted 2019 dollars. SOURCE: WWW.IBISWORLD.COM

Jargon & Glossary
Industry Jargon FRANCHISINGThe practice of using another firm’s SECONDARY SCHOOLAn educational institution
business model and brand name for a fee. following primary education.
PRIMARY SCHOOLAn educational institution in which
children receive the first stage of compulsory education.
IBISWorld Glossary BARRIERS TO ENTRYHigh barriers to entry mean that INDUSTRY REVENUEThe total sales of industry goods
new companies struggle to enter an industry, while low and services (exclusive of excise and sales tax); subsidies
barriers mean it is easy for new companies to enter an on production; all other operating income from outside
industry. the firm (such as commission income, repair and service
CAPITAL INTENSITYCompares the amount of money income, and rent, leasing and hiring income); and
spent on capital (plant, machinery and equipment) with capital work done by rental or lease. Receipts from
that spent on labor. IBISWorld uses the ratio of interest royalties, dividends and the sale of fixed
depreciation to wages as a proxy for capital intensity. tangible assets are excluded.
High capital intensity is more than $0.333 of capital to INDUSTRY VALUE ADDED (IVA)The market value of
$1 of labor; medium is $0.125 to $0.333 of capital to $1 goods and services produced by the industry minus the
of labor; low is less than $0.125 of capital for every $1 of cost of goods and services used in production. IVA is
labor. also described as the industry’s contribution to GDP, or
CONSTANT PRICESThe dollar figures in the Key profit plus wages and depreciation.
Statistics table, including forecasts, are adjusted for INTERNATIONAL TRADEThe level of international
inflation using the current year (i.e. year published) as trade is determined by ratios of exports to revenue and
the base year. This removes the impact of changes in imports to domestic demand. For exports/revenue: low is
the purchasing power of the dollar, leaving only the less than 5%, medium is 5% to 20%, and high is more
“real” growth or decline in industry metrics. The inflation than 20%. Imports/domestic demand: low is less than
adjustments in IBISWorld’s reports are made using the 5%, medium is 5% to 35%, and high is more than
US Bureau of Economic Analysis’ implicit GDP price 35%.
deflator. LIFE CYCLEAll industries go through periods of growth,
DOMESTIC DEMANDSpending on industry goods and maturity and decline. IBISWorld determines an
services within the United States, regardless of their industry’s life cycle by considering its growth rate
country of origin. It is derived by adding imports to (measured by IVA) compared with GDP; the growth rate
industry revenue, and then subtracting exports. of the number of establishments; the amount of change
EMPLOYMENTThe number of permanent, part-time, the industry’s products are undergoing; the rate of
temporary and seasonal employees, working proprietors, technological change; and the level of customer
partners, managers and executives within the industry. acceptance of industry products and services.
ENTERPRISEA division that is separately managed and NONEMPLOYING ESTABLISHMENTBusinesses with
keeps management accounts. Each enterprise consists no paid employment or payroll, also known as
of one or more establishments that are under common nonemployers. These are mostly set up by self-employed
ownership or control. individuals.
ESTABLISHMENTThe smallest type of accounting unit PROFITIBISWorld uses earnings before interest and tax
within an enterprise, an establishment is a single (EBIT) as an indicator of a company’s profitability. It is
physical location where business is conducted or where calculated as revenue minus expenses, excluding
services or industrial operations are performed. Multiple interest and tax.
establishments under common control make up an VOLATILITYThe level of volatility is determined by
enterprise. averaging the absolute change in revenue in each of the
EXPORTSTotal value of industry goods and services sold past five years. Volatility levels: very high is more than
by US companies to customers abroad. ±20%; high volatility is ±10% to ±20%; moderate
volatility is ±3% to ±10%; and low volatility is less than
IMPORTSTotal value of industry goods and services
±3%.
brought in from foreign countries to be sold in the
United States. WAGESThe gross total wages and salaries of all
employees in the industry. The cost of benefits is also
INDUSTRY CONCENTRATIONAn indicator of the
included in this figure.
dominance of the top four players in an industry.
Concentration is considered high if the top players
account for more than 70% of industry revenue.
Medium is 40% to 70% of industry revenue. Low is less
than 40%.

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What are the main activities of the tutoring and test preparation franchises industry?

What are the main activities of the tutoring and test preparation franchises industry?

What are some of the major products and services offered in the industry?

What are some of the major products and services offered in the industry?

WWW.IBISWORLD.

COM Tutoring & Test Preparation Franchises in the USMarch 2019 1

Extra credit: Operators will focus on providing

IBISWorld Industry Report OD5609

2 About this Industry 15 International Trade 26 Regulation & Policy

www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

About this Industry

Main Activities The primary activities of this industry are

The major products and services in this industry are

Similar Industries 61143 Business Coaching in the US

61151 Trade & Technical Schools in the US

61169 Tutoring & Driving Schools in the US

61171 Testing & Educational Support in the US

Additional Resources For additional information on this industry

Provided to: Edeska (2129455405) | 16 October 2019

Key Statistics Revenue Annual Growth 14–19 Annual Growth 19–24

$106.4m $445.7m 2,944

Industry Structure Life Cycle Stage Mature Regulation Level Light

Provided to: Edeska (2129455405) | 16 October 2019

Provided to: Edeska (2129455405) | 16 October 2019

Per capita disposable income Government funding for primary and

Provided to: Edeska (2129455405) | 16 October 2019

Current Operators in the Tutoring and Test

expensive than competing tutoring

Provided to: Edeska (2129455405) | 16 October 2019

Competition squeeze The industry has contended with

Provided to: Edeska (2129455405) | 16 October 2019

Industry Improving economic conditions and

Demand expansion As the US economy continues to

Provided to: Edeska (2129455405) | 16 October 2019

Competition Online companies developing study tools

Provided to: Edeska (2129455405) | 16 October 2019

Provided to: Edeska (2129455405) | 16 October 2019

Provided to: Edeska (2129455405) | 16 October 2019

Products & Markets

Supply Chain KEY BUYING INDUSTRIES

KEY SELLING INDUSTRIES

Products & Services Products and services segmentation (2019)

Exam preparation services industry in 2019. This segment includes

Provided to: Edeska (2129455405) | 16 October 2019

Products & Markets

Provided to: Edeska (2129455405) | 16 October 2019

Products & Markets

Demand Disposable income Number of college students

Major Markets K-5 students Middle school students

Provided to: Edeska (2129455405) | 16 October 2019

Products & Markets

Major Markets Major market segmentation (2019)

Total $1.1bn SOURCE: WWW.IBISWORLD.COM

demographic heavily uses industry College students

Provided to: Edeska (2129455405) | 16 October 2019

Products & Markets

Business Locations 2019

West Establishments (%)

Provided to: Edeska (2129455405) | 16 October 2019

COM Tutoring & Test Preparation Franchises in the USMarch 2019 1