The Analysis For The Education Industry

The market for educational services is large and is continuously growing with an abundance of different types of opportunities for franchisees. In 2008 there were about 58,113 establishments in the sector which reportedly earned total revenue of $19.4 billion. This particular industry is heavily fragmented with the top fifty largest companies only representing 30 percent of the entire revenue for the industry. Last 2006, there were about 55.1 million students attending the K-12 program in school. All of these students were potential clients for the rapidly expanding educational service industry.

Industry Overview

A great portion of the revenue of the education industry comes from the tuition fees. The gross profits play in the range between 60 to 90 percent depending on where the location of the institution is. Increasing the size of the company has greatly helped consolidate different operations in the services field and help in decreasing the fixed cost and it also improved the overall operational profitability and efficiency of the establishments. One of the challenges pointed out was the problem of getting qualified instructors teach students. It is very important to inquire regarding this aspect when you are looking for potential franchises. There is a great danger to some areas in future competition from the online training programs which are growing in popularity as technology starts to swoop in. Many are expecting that the field will broaden as there will be effective programs developed for the internet. Additionally, businesses are facing competition also from free online resources as well as from computer software. Overall, the industry is expanding and is expected in the US to grow by about 5 percent every year in the next five years. The growth will be attributed to the increasing global competitive landscape as well as on the emphasis of higher education in the US.


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