The Franchising of Private Tutoring: A View from Canada: Social Changes in Canada Have Led to an Increase in the Demand for Out-of-School Tutoring. More and More, Just as in the U.S., That Demand Is Being Met by Franchises of Large Corporations That Can Offer Standardized Services and a Broad Range of Programs

Article excerpt

TUTORING has long been a cottage industry, operating through personal networks of individual tutors and students. But over the past decade this industry has undergone a staggering transformation. In Canada, the site of our research, the number of formal tutoring businesses has grown 200% to 500% in major cities over the past 30 years, a growth that holds independently of school enrollments or economic trends. (1) Recent surveys suggest a substantial demand for tutoring. About 24% of Ontario parents with school-age children have recently hired tutors, and 50% of all Canadian parents claim they would hire a tutor if it were affordable. (2)

Once a small and informal "pushcart" business, tutoring is now marked by franchising, marketing, and corporate strategies. Corporations such as Kumon, Sylvan, Academy for Mathematics and Science, and Oxford Learning Center have enjoyed spectacular growth. Now part of a reportedly billion-dollar industry with more than two million clients in North America, tutoring franchises are publicly traded and have become increasingly popular with investors. In the mid-1990s, Sylvan and Kumon reported annual revenues of between $150 million and $400 million. (3)

This article explores changes in the supply side of tutoring. How does the shift from small, casual businesses to corporate enterprises change the nature of supplementary education? Our arguments are based on several years of research on the industry in Ontario, Canada. What makes this setting informative for U.S. readers is that, despite the fact that Canada has no equivalent to No Child Left Behind, its tutoring industry is growing and is populated by many of the same franchises found in the United States. Below we briefly review existing work on the general impact of franchising on any business and then examine the nature of tutoring franchises.

EDUCATION AND BUSINESS FORMS

For-profit involvement in schooling brings new actors, beyond the ranks of professional teachers, into the educational arena. Since the 1970s, there have been two major attempts to allow for-profit businesses to run public schools: performance contracting and educational management organizations. These ventures have not been particularly successful. In contrast, educational entities such as private preschools, proprietary vocational colleges, and online universities, which sell services that do not directly compete with public schools, have been able to operate successfully.

Private tutoring is a form of supplementary education that does not compete directly with public schools. Tutors have carved out a market niche at the fringes of the public system, offering students extra assistance that is difficult to obtain in regular schools. But tutoring is changing as it embraces a new form: franchising.

Franchising tends to spur business growth in any established industry. Service industries with many franchises, such as restaurants featuring coffee or fast food, have grown much faster than have industries composed of a series of small independents. (4) The popularity of franchising stems from the nature of the contract between corporate franchisers and local owners. A central corporation sells to a local investor the rights to a name brand and product in exchange for fees and royalties.

This arrangement links small businesses to centralized networks, but franchisers differ from corporate chains in that local businesspeople own their outlets and assume most of their risks. Local owners have a financial stake, so they are presumably motivated to deliver the franchise service more efficiently than would a salaried manager. These small investors obtain the right to sell an established and recognized product and receive marketing help, managerial training, and product-testing aids. Such resources allow franchisees to jump-start their venture in an otherwise competitive environment. Whether they are selling coffee, renting cars, or tutoring students, local franchise owners are given immediate access to a visible product and an established customer base. …