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The Economic Outlook Of Education Franchising Sector

Oftentimes, the decision to start an education business/franchise is one of passion. However, passion is now being combined with higher profits. That's because demand for services within the education sector are expected to reach the highest levels ever in the coming years. With advances in technology, new and innovative education delivery models, and the expansion of private educational franchises into larger markets, the education franchising sector will experience a significant increase in both revenue and growth.

Projected growth for this industry is 8.1% compounded annually from 2017 to 2024. This growth rate is significantly higher than the projected compound annual growth rate for the franchising sector in general, which is pegged at only 6.7% during the same time period. This growth rate is largely due to the increasing demand for educational services from both consumers and businesses.

Businesses often prefer to outsource educational training, as they require fewer costs and are able to achieve results quickly. This allows the businesses to focus on their core competencies and continue generating revenue. That's not all, though. The ability of educational franchises to leverage technology to expand their reach across global markets fuels growth. And while this is an international industry, the United States is one of the most lucrative markets in the world for educational franchises. In the US, according to the Franchise Business Review, five states account for the majority of demand in the industry. These states are:

  • Texas
  • California
  • New York
  • Virginia
  • Florida

Together, these states account for 60 percent of all educational franchise opportunities in the United States.

Texas is the most lucrative state for educational franchises; between 2013 and 2017, the number of educational franchises in the state more than doubled. Additionally, in 2018 the state earned nearly a quarter of the total revenue generated by educational franchises in the United States. California is not that far behind Texas. Educational franchises in the Golden State earn close to 20% of all total US revenue in 2018. New York, Virginia, and Florida are also becoming increasingly popular locations for educational franchises. In 2018, educational franchises in New York earned close to 11% of all US total revenue, while those in Virginia and Florida earned a combined 10%. Education franchises in New York are particularly popular due to its large student population. An exciting partnership is forming between universities/traditional educational institutions in Virginia and Florida as they join forces with educational franchises to provide innovative learning solutions.

The educational franchising sector is a vibrant and ever-growing industry. With the aforementioned advances in technology, increased demand for educational services, and the expanding presence of private educational franchises in larger markets, education franchises can expect to experience a significant surge in reach and demand.  With these factors at play, the economic outlook for education opportunities looks very promising and is expected to continue to grow in the foreseeable future. If you are passionate about education/are excited about the potential profits of the industry, now is the time to start. So, is the right answer to start a business? When the business grows minds and wallets, the answer is a clear yes!

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