Initial Investment

If you are applying for your first Kumon Centre Franchise, the Deposit Fee is $500 for a Start-Up Training Kit. We will apply the Deposit Fee towards your Initial Franchise Fee if you successfully complete Start-Up Training and sign a Franchise Agreement.

The estimate includes the first month’s rent. You must operate your centre in retail facilities such as a storefront, strip mall or town centre unless we grant you a written exception to this requirement. We will not accept a location where the lease term is less than three years, the space is less than 800 square feet, or you are unable to affix one of our exterior signs. We will not permit any activity other than the operation of a Kumon Math and Reading Centre for any site we approve. You may not use or permit the use of the site we approve for any other purpose or activity at any time without first obtaining our written consent. Rent will vary according to the centre’s location and whether your landlord shall require a security deposit. Kumon currently offers a rent subsidy program under which we will assist you with your rent for 24 months. You must sign our Rental Subsidy Addendum (see Attachment 2-E to the Kumon Franchise Disclosure Document) to receive the subsidy. The rental subsidy is $700 for the first 12 months of your lease (or 45% of your monthly rental obligation for these months, whichever amount is lower), and $300 for the next 12 months of your lease. (See Item 12, Site Selection for further information about our site approval process.) Kumon does not, under any circumstances, act as a guarantor under the lease.

The amount of the build-out for a new Kumon Centre depends on many factors such as the age of the building, a landlord’s willingness to make a contribution (which may take the form of a tenant improvement allowance or free rent for some specified time), and real estate market conditions.

You also have the responsibility to ensure that the premises and signage, which must be approved by us, are zoned appropriately for the operation of a Kumon Centre.

You must equip the centre at your own expense. At a minimum, you will need tables, chairs, and at least one digital clock.

Pursuant to Kumon’s Signage Policy contained in our Operations Manual, we will loan one exterior sign to you and install it at your centre at our expense. We retain ownership of the exterior sign and will remove it at our expense if our relationship with you ends. When affixing signage, the Kumon logo (KUMON and “Thinking Face” design) must be separated from all centre information (i.e., centre name, phone number, hours of operation, and website address).

You must obtain a notebook computer for use at your Kumon Centre. Your computer must be at your centre at all times when your centre is open. Your notebook computer must have the minimum specifications set forth in our Operations Manual. Note: Our proprietary computer software will not function correctly if your computer has Earthlink, Simply Accounting and/or Zune MP3 software.

You must use our proprietary software, applicable to your centre, which will assist in various aspects of operating your Kumon Centre. (See Item 12, Notebook Computer and Software Programs).

This figure is the current annual rate if you purchase Kumon’s group liability insurance (“Kumon Group Insurance”). Some of our franchisees also obtain other types of insurance coverage for their centres, such as property and casualty coverage, although we currently require only liability coverage. Almost every province requires you to purchase workers’ compensation insurance for the employees of your centre. Whether or not your province requires you to obtain workers’ compensation insurance, Kumon will require you to obtain and have proof that you have this type of insurance. (See Item 9, Workers’ Compensation) You may have an obligation under provincial law to obtain other forms of insurance.

Your Kumon Centre must utilize the Kumon Lead Management Tracking System. This system utilizes Voice-Over Internet telephone technology. To utilize this System, your centre must have its own telephone number and dedicated Voice-Over Internet telephone line used exclusively for centre business. You must purchase this System from our designated vendor. The cost for the purchase and installation of the System is currently $350. After installation, monthly expenses for use of the System are estimated by our vendor to be approximately $40 per month. The Voice-Over Internet telephone will include the software for the System. The System will automatically route parent telephone inquiries to our call centre and provide us with access to your scheduling calendar. In your absence, our call centre will schedule appointments for new parent orientations for you. Kumon earns no commission or any revenue from your purchase or use of the System. Upon expiration or termination of our relationship, you must cease using the System and the telephone number for your dedicated telephone and assign the number to Kumon.

You are required to spend no less than $3,000 to market your centre within the first six months of the opening of the centre. For takeover centres, no less than $3,000 must be spent within the first twelve months of operating the centre. We will reimburse 50% of the funds you spend for the new centre marketing of your centre up to a maximum of $1,500.

You must purchase one complete set of our 7A-3A Library of Books at a cost of approximately $1,000-$1,500. You may purchase the books directly from Kumon’s preferred vendor or from a vendor of your choice.

You must purchase one complete set of our Recommended Reading List from Levels 2AL, at a cost of approximately $1,500$2,000. You may purchase the books from Kumon’s preferred vendor or a vendor of your choice.

Criminal background checks and Vulnerable Sector searches must be conducted at your local police department or other authorized agency that conducts criminal background checks and Vulnerable Sector searches. In the event the results are not satisfactory to us, we may also require that the criminal records check include a full set of fingerprints. You must consent to have the results of your criminal records check and/or fingerprint check released directly to Kumon. If a fingerprint check is required, the Consent to Release Information to Kumon form, a completed RCMP Form C-216C-VB, and the processing fee must be forwarded to the Royal Canadian Mounted Police.

When you open your centre, you will need to determine how many assistants to hire and the salary to pay them. You may hire additional assistants as the number of students enrolled at your centre increases. Your payroll costs will depend on many factors such as the number of assistants you hire and the prevailing wage rate. This figure is an estimate and we cannot guarantee that you will not incur greater payroll expenses.