Home >companies >Preschools find homing in on transition pays off

Bangalore: As three-year-old Mahika’s parents shifted from Jammu to Bangalore, her mother’s biggest concern was putting the child in a preschool similar to her last one.

She ended up finding exactly the same one.

Active learning: Activities at a Shemrock franchisee school in Bangalore. Curricula in these schools include singing, listening to stories, drama, plays, dances, group projects and outdoor games. (Photo: Hemant Mishra / Mint)

With school franchises growing across India, life has become a bit easier for young parents with transferable jobs. “My biggest concern was that Mahika should not feel uprooted and alienated," says Mahika’s mother Varsha Bhasin, a human resource consultant. “She did not have much issue settling down here as she was used to the toys, classroom set-up and general ambience."

The transition, too, has been relatively painless for the operators behind these franchises. In many cases, they are homemakers looking to fill their time and earn some additional income. Unlike schools that run from nursery to class 12, which largely are mandated by states to be run by non-profit trusts, preschools can be set up as for-profit companies. And against a greater awareness of and hunger for early childhood education, the school chains and creches, they report, are turning profits within the first year—uncommon in the franchise model.

Preschools cater to those between age one and a half and four years, when children are too young to start formal education. The concept of preschool or playschool, as they are also known, is relatively new in India, but the trend is fast growing, due to increasing, awareness that 40% of learning takes place before the age of four, experts say.

“We broke even in the first year itself. I think it is the only business of its kind where one can generate profits from the second year on," says Ritu Bora, who owns a 3,000 sq. ft franchise of Eurokids in Pune. “If you have patience and strength, preschools can be a very rewarding experience."

Bora, a housewife, says she started the school 18 months ago by investing Rs7 lakh. She declined to disclose her revenues, but the centre now has 83 students, each paying Rs19,000 a year.

Currently, the preschool industry in the country is estimated to gross about Rs4,004 crore ($985 million). The sector is likely to cross Rs13,821 crore by 2012, a growth of more than 28% per year, according to estimates from brokerage firm CLSA Asia-Pacific Markets. With nearly three-quarters of the country’s population under the age of 35, the demand for quality preschools is expected to only intensify.

Over the years, a handful of preschool chains have emerged. Among the more prominent includes New Delhi-based EuroKids International Pvt Ltd, with 450 centres across 160 cities and towns in the country and 30,000 students. Except for 25 centres, all others are franchises.

Another preschool chain Shemrock Schools—which was the school the Bhasins of Bangalore found for Mahika—has 85 branches, with 8,000 students. Kangaroo Kids Inc., established in 1993, has more than 55 centres across 15 cities and one international centre in Dubai. Preschool chain Kidzee, an arm of Zee Interactive Learning Systems Ltd, has more than 600 centres across India.

The preschool chains remain on the lookout for new franchisees and the basic requirements include a minimum of 2,000 sq. ft (owned or rented), and an investment of above Rs4 lakh, which also dependent on location.

Eurokids managing director Uday Mathur says the company prefers women, ideally with a teaching background, as their operating person for the franchise. The companies say franchise costs vary; for a second-tier city, for example, it’s Rs3-7 lakh, while for cities, Rs7-8 lakh. But a playschool in south Delhi, downtown Mumbai or upmarket Indiranagar in Bangalore requires an investment of more than Rs16 lakh.

Like the businesses behind them, the schools are not all play. Actual curricula includes singing, listening to stories, drama, plays, dances, group projects and outdoor games— the ultimate goal to learn through play, not pressure.

Fees differ depending on location, and can vary from Rs8,000 to Rs35,000 a year.

“We generally take a royalty of 15% from our franchise. The royalty is on the total fee generated by the school in a year," says Amol Arora, managing director of New Delhi-based Shemrock.

Franchise owners go through a training programme that can vary from a day to a week. They also receive a set of manuals which indicate the equipment and furniture they have to buy to provide similar ambience at all centres. Some school chains also provide toys and books to the franchisees. An ideal teacher-child ratio is 1:8, but its differs from school to school.

Aware of a more migratory middle class, all preschool chains allow both long and short transfers between centres. Some schools also operate creches, targeting double-income parents, but that seems to be the exception for the time being because they require more full-time staff, even as the margins are lower.

Parents say a right preschool can bring out positive changes in a kids’ personality. “My daughter used to cling to me before I enrolled her in a preschool. However, now with her attention being divided on other people and new things, she has become much more relaxed and self-reliant," says Debashree Basu of Bangalore, whose daughter Zoe is nearly three years old.

The franchisees say it is not easy to attract parents at the initial stage, but once the brand is established, it becomes easier. Many parents mistakenly think a certain playschool will guarantee them admission to a formal school when the child has to move on, but principals say that is all but impossible.

“We do not have any formal tie-up with any school. However, with our reputation and the belief that a child is ‘ready’ for schooling as he was with us, a few schools are giving preference to our students," says Eurokids’ Mathur.

Preschool chain owners say large- and medium-sized cities are also gradually opening to them. But they caution that rising real estate prices and parents’ expectations of a sea change in their child’s attitude overnight do act as a hindrance.

Competitors, in the form of the so-called ‘aunty-next-door’ schools, definitely outnumber them, but the franchisees plug their training, facilities and standards.

“There are so many players in this segment. At every nook and corner there is a lady running such a school. However, it will not take long for parents to realize the difference in the two approaches," says Vikas Sharma, who runs four Shemrock centres in Bangalore.

In some cases, parents resist the commercialization and mass approach to schooling at such a young age.

Sarita Sharma, a mother in the New Delhi suburb of Faridabad, says three-year-old Kia went through severe distress after she was enrolled in a reputed preschool franchise of a national chain; she declined to divulge the name.

Within a week, Kia became reserved, weepy and started wetting her bed. Sharma says her inquiries revealed that Kia was not performing at the same level as other kids and was being pressurized by the teacher and had, therefore, developed fear.

“This kind of mental trauma for my child after paying through my nose for what they call as annual fees; I think I should have got her admitted in a next-door school, where I could just walk in to see how my child is being treated," says Sharma.

Experts say parents should double-check a pre-school’s teaching method, curriculum and training level of the staff before enrolling their children. They say an unpleasant experience at a young age can leave negative impressions and permanently scar their approach to learning.

Importantly, they say it is crucial for parents to realize when their child is ready to join school and not enroll only when they feel he or she is ready, they suggest.

“A child should not feel isolated...by parents by the sudden initiative to go to school. Also, stringent discipline at school can be harsh for a child," says Nooraa Sinha, a child psychologist in Bangalore.

“They can become withdrawn and fearful and can reach a stage of not being able to communicate what they feel. Such things can hamper a child’s confidence and growth permanently."

Subscribe to newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaperLivemint.com is now on Telegram. Join Livemint channel in your Telegram and stay updated

My Reads Logout