Sylvan's Founder Rolling Out New Tutoring Company
W. Berry Fowler has spotted a vacant niche in the booming market for tutoring services--and he doesn't mind jumping past his old company to fill it.
The man who launched Sylvan Learning Centers, the for-profit franchises that tutor thousands of students in storefronts and shopping malls across the nation, said the centers have hiked their hourly fees beyond the reach of the middle-class and poor children who really need them.
What's more, he claims, the tutoring business has been priced too high for entrepreneurial teachers, who no longer can afford the franchise fees charged by the big chains--including Sylvan and Huntington Learning Centers.
To redress those problems, Mr. Fowler announced this month that he will revive his original concept under a new brand, "A Thousand Points of Knowledge," through which teachers can start their own tutoring businesses. The first one will open in January in Phoenix, he said, adding that he is reviewing about 14 other applications from teachers.
Instead of selling franchises, Mr. Fowler is selling licenses to use his materials and methodology. Licenses generally give the purchaser more control over a business, including its name.
"My original vision was to provide teachers with a reasonable and interesting business opportunity that would allow them to stay involved in education, work with kids in their communities, and offer affordable basic-skills instruction," said the former public school teacher, who founded Sylvan Learning Systems Inc. in 1979 and sold the company in 1985 for $5.3 million.
Sylvan, which is now publicly traded, has since grown into a worldwide training and educational conglomerate with gross revenues of $246.2 million in 1997. The learning-centers division has expanded from 70 centers in 1985 to 700 centers today; all but 60 are franchises.
Vickie Glazar, a spokeswoman for the Baltimore-based company, was unfazed by the return of Sylvan's founder to the industry. "We welcome anything that truly helps children," she said. "In terms of competition, no, we aren't worried."
Mr. Fowler cites Sylvan's success as proof that self-paced individual tutoring works and fills a need. In a recent phone interview from the W. Berry Fowler Co., based in Spokane, Wash., he said his company's tutoring system will provide the same type and quality of tutoring.
But teachers can be owners, he said, because the license to deliver the system will be affordable: $29,500 for a territory of approximately 10,000 school-age children, including owner training and materials. Additional expenses could raise the start-up cost to $35,000, and there will be a $1,200 annual license fee. Mr. Fowler's company will not charge royalties.
By contrast, starting a Sylvan franchise costs about $92,000 for a territory of between 8,000 to 10,000 children, Ms. Glazar said. In its latest annual report, Sylvan said it collects royalties of 8 percent of its franchises' revenues.
Each Thousand Points of Knowledge center will be able to set its own rates for tutoring students, but Mr. Fowler said it could probably make a profit charging about $18 to $20 an hour. Ms. Glazar said Sylvan centers charge students from $25 to $45 an hour, depending on the location.
Mr. Fowler said his licensees can set lower rates because, in addition to not paying royalties, they can provide the service in their own homes. Therefore, they won't have to buy supplies and furniture from the company--which franchises, including Sylvan, typically require.
Sylvan centers are purposely not run out of homes and use standard fixtures, Ms. Glazar said, to provide quality control and consistency, which she said parents appreciate.
She noted that Sylvan has added computer-based testing, accredited courses, and programs for academically talented students since Mr. Fowler was involved with the company. "These centers hardly resemble those of 15 years ago," she said.
Mr. Fowler's Thousand Points curriculum will be limited at first to reading. Other modules slated for development, such as a mathematics program, will cost licensees extra. But purchasing them is optional, Mr. Fowler said.
John M. McLaughlin, the president of the trend-watching Education Industry Group in Sioux Falls, S.D., said Mr. Fowler's plan for moderately priced tutoring seemed "a reasonable scheme" in the expanded market. "If you look at franchise restaurants, you see higher-end franchise opportunities and lower-end opportunities. They all serve Cokes and soft drinks."
Vol. 18, Issue 9, Page 15