FDD Talk: Mathnasium Franchise Costs, Fees, Average Revenues and/or Profits (2022 Review)


In this FDD Talk post, you’ll learn the following:

  • Section I – Estimated initial investment (franchise costs) for a Mathnasium franchise, based on Item 7 of the company’s 2022 FDD
  • Section II – Initial franchise fee, royalty fee, and marketing fee for a Mathnasium franchise, based on Items 5 and 6 of the company’s 2022 FDD
  • Section III – Number of franchised and company-owned Mathnasium outlets at the start of the year and the end of the year for 2019, 2020, and 2021, based on Item 20 of the company’s 2022 FDD
  • Section IV – Background information on the Mathnasium franchise opportunity, including relevant news updates
  • Section V – Presentation and analysis of Mathnasium’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:
  • 2021, 2020, and 2019 average, median, high, and low gross receipts for the franchised Mathnasium centers that had been open for 12 months or longer as of December 31, 2021, 2020, and 2019, respectively, broken down by quartiles and halves

Section I – Mathnasium Franchise Costs

  • Initial Franchise Fee:  $49,000 for your first franchise; $26,500 if you are buying an additional franchise
  • Expenses While Training:  $2,500 to $3,000
  • Base Royalty Fee:  $0 to $500 per month
  • Technology Fee:  $110 per month
  • Additional Technology Fee:  $0 to $45 per month
  • Rent (1st and last month’s rent):  $6,000 to $14,000
  • Paint, Carpet, and Tenant Improvements:  $5,500 to $13,500
  • Furniture, Signs, Equipment, and Supplies:  $10,000 to $17,000
  • Insurance:  $1,200 to $1,500
  • Business License and Registration:  $250 to $1,000
  • Professional Services (Legal and/or Accounting):  $1,300 to $2,000
  • Phone and Utilities:  $500 to $1,000
  • Video Surveillance and Related Equipment:  $500 to $2,500
  • Pre-Open Advertising:  $4,000
  • Additional Funds for 4 Months:  $32,000 to $40,000
  • Total Estimated Mathnasium Franchise Costs (1st Center):  $112,860 to $149,155
  • Total Estimated Mathnasium Franchise Costs (Subsequent Center):  $90,360 to $126,655

Section II – Mathnasium’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

  • Initial Franchise Fee:  $49,000 for your first franchise; $26,500 if you are buying an additional franchise
  • Monthly Royalty:  initially, 10% of your monthly Gross Receipts from all sources plus a base royalty fee of $500 per month. Beginning in the 24th month of operation of the Center, the base royalty fee plus the greater of (i) the 10% monthly royalty or (ii) $1,500
  • Monthly Marketing Fee:  $250 plus 2% of your monthly Gross Receipts

Section III – Number of Franchised and Company-Owned Mathnasium Outlets

Franchised

2019

  • Outlets at the Start of the Year:  860
  • Outlets at the End of the Year:  935
  • Net Change:  +75

2020

  • Outlets at the Start of the Year:  935
  • Outlets at the End of the Year:  927
  • Net Change:  -8

2021

  • Outlets at the Start of the Year:  927
  • Outlets at the End of the Year:  948
  • Net Change:  +21

Company-Owned

2019

  • Outlets at the Start of the Year:  13
  • Outlets at the End of the Year:  7
  • Net Change:  -6

2020

  • Outlets at the Start of the Year:  7
  • Outlets at the End of the Year:  7
  • Net Change:  0

2021

  • Outlets at the Start of the Year:  7
  • Outlets at the End of the Year:  3
  • Net Change:  -4

Section IV – Background Information on the Mathnasium Franchise

13 Things You Need to Know About the Mathnasium Learning Centers Franchise

Acquired by Roark Capital

1.  In mid-November 2021, Roark Capital, an Atlanta-based private equity firm focused on franchised and multi-location businesses, announced that its affiliate has acquired Mathnasium. Shant Assarian, CEO of Mathnasium, said, “Mathnasium is honored to join the Roark family of brands. Working together, we see a powerful opportunity for Mathnasium to transform the lives of many more children around the world and enable our franchisees to achieve even greater success.”

2.  Clay Harmon, managing director at Roark, said, “Peter Markovitz, David Ullendorff and Larry Martinek founded and built a purpose-driven brand focused on high quality, effective and fun math tutoring. We look forward to supporting the Mathnasium team and franchisees in continuing their mission.”

3.  Roanne Daniels, managing director at Roark, added, “We are excited to be part of the next chapter for Mathnasium. We want to bring the benefits of the Mathnasium Method to more families around the globe.”

Rolls Out New Great Foundations Program for 4-6 Year Olds

4.  At the end of January 2022, Mathnasium Learning Centers rolled out its new Great Foundations program to give 4-6 year olds an advantage as they head into their school years. Research shows that an early start in math can make a big difference in a child’s future, and Mathnasium is taking the lead.

5.  According to John Bianchette, Mathnasium’s associate vice president of education and training, “Mathnasium is ecstatic to release Great Foundations to the U.S. system. Following a significant period of strategy, development and testing, what has emerged is a world-class program crafted specifically for the unique needs of pre-kindergarten and kindergarten students, delivered by the community’s local highly-trained instructional staff. Great Foundations will solidify a child’s awareness of the mathematical world around them, develop their inquisitive minds and incorporate a lot of fun while doing it. The result is a tremendous introduction to Mathnasium for early mathematical thinkers, preparing them for our transformational Numerical Fluency Addition and Subtraction program and beyond.”

6.  The Great Foundations program includes curriculum designed to engage the younger age group and is taught using the same caring, face-to-face instruction Mathnasium is known for. Because the lessons are engaging and fun, children develop a love of learning as well as an ability to work independently.

7.  Great Foundations was introduced in a successful pilot program over the last year, and Mathnasium is enthusiastic about expanding the program to its franchisees of over 1,000 Learning Centers across the country after receiving positive feedback from parents. “My kids loved the program and asked to go more,” said parent Mark M. “They started kindergarten well ahead of the rest of the students.”

Seeks Franchisees to Expand in the Northeast

8.  At the end of March 2022, Mathnasium Learning Centers announced that it was seeking qualified franchisees to open over 80 locations throughout the Northeast. To help more children gain lifelong skills, confidence, and math comprehension, the franchise plans to open the new math learning centers within the next two years. They have identified prime growth opportunities in the following states: Massachusetts, Connecticut, New Jersey, New York, and Pennsylvania.

9.  The 2022 franchising outlook for the Northeast region projects an economic output of $143.7 billion, and the International Franchise Association estimates that 121,533 establishments can contribute to over 1 million employment opportunities. With over 80 new centers, collectively Mathnasium franchisees could add anywhere between 500-700 jobs in the Northeast, with each center typically needing 6-9 employees.

10.  Shant Assarian, CEO of Mathnasium, said, “We currently have 96 Mathnasium centers throughout the area, all dedicated to teaching children math so that they understand it, master it, and love it. Each center has countless stories of how math has changed lives. Math matters in school and in life as it promotes critical thinking and teaches problem-solving. We’re continuing to grow as more entrepreneurs discover how rewarding this business is when they can use a tailored curriculum designed with the student’s engagement in mind. Franchisees and center directors see firsthand the value Mathnasium brings as confidence increases, grades improve, college acceptance rises and new doors of opportunity open for students.”

Company History

11.  Mathnasium Learning Centers was founded in 2002 by Larry Martinek, David Ullendorff, and Peter Markovitz in the Westwood neighborhood of Los Angeles, California. Martinek, who was a math teacher, had been writing his own supplemental material for decades and published Math Tips for Parents in 1985. In the 1990s, Ullendorff and Markovitz, who also worked in education, recognized that students needed a better understanding of math to be successful. All three of them felt that the math curriculum that schools offered was not adequate enough and they set out to change things. Ullendorf and Markovitz came across Martinek’s work and they hired him to develop the Mathnasium Method.

12.  The first Mathnasium was a success and Martinek, Ullendorff, and Markovitz began franchising the concept in 2003. Over the next decade, Mathnasium quickly grew around the U.S. and internationally. By 2019, there were more than 1,000 centers opened across North America, South America, Europe, the Middle East, and Asia. In 2021, Mathnasium Learning Centers was acquired by Roark Capital.

Entrepreneur’s Franchise 500

13.  Mathnasium Learning Centers ranked No. 95 on Entrepreneur’s 2022 Franchise 500 list.

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Mathnasium Franchise (Item 19, 2022 FDD)

  • The following is a historic financial performance representation for the period from (i) January 1, 2021 through December 31, 2021, (ii) January 1, 2020 through December 31, 2020, and (iii) January 1, 2019 through December 31, 2019.
  • It includes average and median annual Gross Receipts of Mathnasium’s existing Mathnasium centers that had been open for 12 months or longer as of December 31, 2021, 2020, and 2019, respectively, broken down by quartiles and halves.
  • “Gross Receipts” means the annual Gross Receipts from all sources in the operation of a Mathnasium Center, including student tuition, registration and testing fees, sales of learning materials, hourly per student private tutoring, and any other approved services.
  • “Gross Receipts” excludes only sales tax receipts that you must by law collect from customers and that you pay to the government, any customer refunds actually paid, and coupons or promotional discounts approved by the company.
  • As of December 31, 2021, there were 948 franchised Mathnasium centers in operation. Of the franchised Mathnasium centers, 48 were not included in this financial performance representation because they had not been open for 12 months or longer as of December 31, 2021.
  • In addition, 4 franchised Mathnasium centers that had been open for at least 12 months were not included because they had not reported their Gross Receipts to the company for the full 12-month period.
  • As of December 31, 2020, there were 927 franchised Mathnasium centers in operation. Of the franchised Mathnasium centers, 48 were not included in this financial performance representation because they had not been open for 12 months or longer as of December 31, 2020.
  • In addition, 8 franchised Mathnasium centers that had been open for at least 12 months were not included because they had not reported their Gross Receipts to the company for the full 12-month period.
  • As of December 31, 2019, there were 935 franchised Mathnasium centers in operation. Of the franchised Mathnasium centers, 88 were not included in this financial performance representation because they had not been open for 12 months or longer as of December 31, 2019.
  • In addition, 4 franchised Mathnasium centers that had been open for at least 12 months were not included because they had not reported their Gross Receipts to the company for the full 12-month period.
  • The annual averages and medians of Gross Receipts for franchised Mathnasium centers open at least 12 months and reporting throughout the year shown were calculated by Mathnasium based on reports on Gross Receipts furnished to Mathnasium by its franchisees. Neither the submitting franchisees nor Mathnasium audited this information.
  • The financial information in the tables below shows only historic Gross Receipts of franchised Mathnasium Centers.
  • The financial information below does not reflect the costs of sales, operating expenses, or other costs or expenses that you will incur and that must be deducted from the Gross Receipts to obtain your net income or profit.

2021 Average Gross Receipts for Mathnasium Centers Operating 12 Months or More

Top 25% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $430,421
  • Category Average Gross Receipts:  $481,829
  • Number of Centers Meeting or Exceeding Average for Category:  84 or 38% of 224 Centers
  • Range of Gross Receipts for Category:  $336,945 to $1,994,339

Mid-Upper 25% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $276,613
  • Category Average Gross Receipts:  $278,823
  • Number of Centers Meeting or Exceeding Average for Category:  102 or 46% of 224 Centers
  • Range of Gross Receipts for Category:  $234,591 to $335,679

Mid-Lower 25% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $198,669
  • Category Average Gross Receipts:  $201,239
  • Number of Centers Meeting or Exceeding Average for Category:  109 or 48% of 224 Centers
  • Range of Gross Receipts for Category:  $234,299 to $165,906

Bottom 25% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $124,463
  • Category Average Gross Receipts:  $120,819
  • Number of Centers Meeting or Exceeding Average for Category:  127 or 57% of 224 Centers
  • Range of Gross Receipts for Category:  $44,238 to $164,589

Top 50% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $336,945
  • Category Average Gross Receipts:  $380,553
  • Number of Centers Meeting or Exceeding Average for Category:  153 or 34% of 448 Centers

Bottom 50% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $165,906
  • Category Average Gross Receipts:  $161,118
  • Number of Centers Meeting or Exceeding Average for Category:  239 or 53% of 448 Centers

2020 Average Gross Receipts for Mathnasium Centers Operating 12 Months or More

Top 25% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $367,663
  • Category Average Gross Receipts:  $409,533
  • Number of Centers Meeting or Exceeding Average for Category:  74 or 34% of 218 Centers
  • Range of Gross Receipts for Category:  $278,607 to $1,085,199

Mid-Upper 25% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $221,209
  • Category Average Gross Receipts:  $225,312
  • Number of Centers Meeting or Exceeding Average for Category:  100 or 46% of 218 Centers
  • Range of Gross Receipts for Category:  $185,740 to $278,451

Mid-Lower 25% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $157,555
  • Category Average Gross Receipts:  $158,292
  • Number of Centers Meeting or Exceeding Average for Category:  106 or 49% of 218 Centers
  • Range of Gross Receipts for Category:  $132,637 to $185,550

Bottom 25% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $106,017
  • Category Average Gross Receipts:  $99,353
  • Number of Centers Meeting or Exceeding Average for Category:  124 or 57% of 217 Centers
  • Range of Gross Receipts for Category:  $35,764 to $132,628

Top 50% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $278,529
  • Category Average Gross Receipts:  $317,423
  • Number of Centers Meeting or Exceeding Average for Category:  155 or 36% of 436 Centers

Bottom 50% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $132,637
  • Category Average Gross Receipts:  $128,890
  • Number of Centers Meeting or Exceeding Average for Category:  236 or 54% of 435 Centers

2019 Average Gross Receipts for Mathnasium Centers Operating 12 Months or More

Top 25% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $442,163
  • Category Average Gross Receipts:  $495,511
  • Number of Centers Meeting or Exceeding Average for Category:  71 or 34% of 211 Centers
  • Range of Gross Receipts for Category:  $336,940 to $1,094,504

Mid-Upper 25% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $274,983
  • Category Average Gross Receipts:  $279,285
  • Number of Centers Meeting or Exceeding Average for Category:  90 or 43% of 211 Centers
  • Range of Gross Receipts for Category:  $237,370 to $336,037

Mid-Lower 25% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $201,875
  • Category Average Gross Receipts:  $200,967
  • Number of Centers Meeting or Exceeding Average for Category:  107 or 51% of 211 Centers
  • Range of Gross Receipts for Category:  $165,174 to $236,402

Bottom 25% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $129,734
  • Category Average Gross Receipts:  $124,529
  • Number of Centers Meeting or Exceeding Average for Category:  116 or 55% of 210 Centers
  • Range of Gross Receipts for Category:  $31,460 to $165,112

Top 50% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $336,489
  • Category Average Gross Receipts:  $387,398
  • Number of Centers Meeting or Exceeding Average for Category:  153 or 36% of 422 Centers

Bottom 50% of Centers by Gross Receipts

  • Category Median Gross Receipts:  $165,174
  • Category Average Gross Receipts:  $162,839
  • Number of Centers Meeting or Exceeding Average for Category:  216 or 51% of 421 Centers

Section VI – Mathnasium Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇



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