Why Preschool Franchises are Lucrative Business Opportunity

Nikita Arya
Nikita Arya Jul 29 2019 - 3 min read
Why Preschool Franchises are Lucrative Business Opportunity
With franchising being a low-cost model, big fishes in the preschool market like EuroKids and KidZee are opting for franchise model to penetrate deeper into the market, hence flourishing franchise opportunities in the segment. Read on...

It is rightly said that we instil in our children the foundation upon which they build their future. This is one of the biggest reasons why early education plays a vital role in shaping the future of children. In the early times, grandma, grandpa and nannies were often made the caretakers of children when their parents were away. In today’s technology-driven world, early education providers like preschools are of grave importance and are gaining momentum in the education industry.

With the time passing by, more formal versions of preschools evolved, creating a niche in the education industry. In today’s time, more than 33,000 formal preschools are running successfully in India. In fact, preschool franchises are one of the most lucrative business opportunities in India as the industry is currently pegged at a whopping Rs 25,000 crores. So, what makes the preschool franchises such gigantic industry? Read on to discover how preschool franchises instil education and are promising investment opportunities for aspiring franchisees.

Preschools and Day care Market: An Overview

The preschool market in India has been constantly growing for the past few years at a CAGR of over 20 percent. The paradigm of the market is largely shifting towards the organised sector, most of which primarily operate on franchise model. As per some industry insiders, the share of unorganised market is more than 90 percent as of now, while the organised segment accounts for around 10 percent. However, the organised market is rapidly growing at over 45 percent on a yearly basis.

With franchising being a low-cost model, big fishes in the preschool market like EuroKids and KidZee are opting for franchise model to penetrate deeper into the market, hence flourishing franchise opportunities in the segment. Here are some franchise insights for franchises in preschool.

Investment  Rs 15-20 lakhs
Area 2000 sq ft
Breakeven 12-24 months

Growth Catalysts

The driving forces behind the preschool franchises are primarily: rising parent awareness, rising number of nuclear families and the increasing population of working mothers and double-income families in the country.

# Rising Parent Awareness

With the educated and ambitious millennials becoming parents, it is likely that they wish their children to be well-minded from an early age and want to leave no stone unturned in order to do so. Modern day parents are looking for some extra edge for their children when it comes to their pre-primary education. In a scientific study it is revealed that 90% of the brain’s capacity development happens before the age of 5. It is easier to inculcate values, morals and basic education in the age bracket of 1-6 years. This is where the demand for preschools emerges.

# Rising nuclear families

As already mentioned above, unorganised market was dominating the segment for a very long time. Grandma, grandpa and grannies were the reliable people to look after kids. But, with time, families are largely disintegrating due to reasons like employment, leading to a rising number of nuclear families. In nuclear families, in the absence of elderly people it becomes tougher for the parents to take care of their children, hence they prefer preschools. With the rising number of nuclear families, the preschool franchises have received higher admissions, giving the segment a great push.

# Working mothers and double-income families

Nowadays, the taboo associated with working after conceiving baby is being shattered as most of the new-age mothers are not giving up their professions even after having babies. This is one of the biggest factors that are pushing the preschools segment. With both the parents engaged in their careers, preschools are becoming their first choice to make a secure environment for their kids. Also, with double-income families, it becomes much affordable for the parents to admit their children to preschools.  

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