Buyer Guide
Kumon Franchise Cost: $2K Fee, No Territory Protection
Kumon costs $73K-$166K with a $2,000 franchise fee but charges per-student royalties, offers no territory protection, and does not disclose revenue. 7.5% SBA default rate across 53 loans.
Kumon is the world's largest after-school math and reading enrichment program, with 1,659 locations in the United States and thousands more worldwide. Founded in Japan in 1958, the brand has built its reputation on a specific pedagogical method: worksheet-based, self-paced learning with minimal instructor intervention.
That simplicity extends to the franchise model. Kumon has one of the lowest franchise fees in the industry and a non-traditional royalty structure. But the FDD also reveals a system in decline with significant transparency gaps.
The investment: lowest in education
A Kumon franchise costs $73,783 to $165,920 per the 2024 FDD. The franchise fee is just $2,000, which is the lowest we have tracked across any franchise brand in our database.
- Franchise fee: $2,000
- Lease deposits and improvements: $20,000 to $60,000
- Furniture and equipment: $10,000 to $30,000
- Kumon materials and supplies: $5,000 to $15,000
- Working capital and other: $36,783 to $58,920
The midpoint investment of $120K is dramatically below the Education category average of $765K. For someone looking to enter the education franchise space without a six-figure build-out, Kumon is one of the most affordable options.
The unusual royalty structure
Kumon does not charge a standard percentage royalty. Instead, the franchisor collects a per-student fee: $36 per month for full-paying students and $18 per month for partial-paying students. This creates variable monthly costs that scale directly with enrollment.
On the surface, this sounds fair: you only pay when you have students. But it also means your royalty costs are unpredictable and directly tied to enrollment volume, which fluctuates seasonally and with local school schedules. There is no cap, and at scale the per-student fees can exceed what a percentage royalty would cost.
For a center with 200 students (a strong enrollment), the monthly royalty would be approximately $7,200 per month or $86,400 per year. On estimated revenue in that range, that is a substantial percentage.
Revenue and profit: not disclosed
Kumon does not provide Item 19 financial performance representations. Average revenue and net income are not disclosed in the FDD. This is a meaningful transparency gap for a system with 1,659 locations and nearly 70 years of operating history.
The absence of Item 19 data means you cannot determine expected revenue, margins, or payback from the franchise disclosure document. You will need to contact existing franchisees directly (Kumon is required to provide a list in Item 20) and conduct your own financial diligence.
The system is shrinking
Kumon went from 1,637 to 1,606 to approximately 1,659 units over three years. The most recent year shows a -1.2% year-over-year contraction. More centers are closing than opening.
For an education brand with this much history, negative growth signals one of two things: either the tutoring market is shifting toward digital alternatives (Khan Academy, IXL, AI-powered tutoring) or the unit economics are not working for enough franchisees to sustain expansion. Both possibilities should concern a prospective buyer.
Territory: no protection
Kumon does not provide exclusive territory protection. The franchise agreement explicitly allows Kumon to open additional franchised or company-owned centers in your area without restriction. In a system with 1,659 locations already, that means you could have another Kumon center open within miles of yours.
For an education franchise where parents choose based on convenience and proximity, the absence of territory protection is a material risk. A new center nearby directly cannibalize your enrollment.
SBA performance: below average
Kumon has 53 SBA loans with a 7.5% charge-off rate. The sample is small compared to brands like The UPS Store (3,051 loans), but the rate exceeds the Education category average of 7.3%.
| Metric | Kumon | Mathnasium | Education Avg |
|---|---|---|---|
| Investment (midpoint) | $120K | $131K | $765K |
| Franchise fee | $2,000 | $49,000 | -- |
| Net income disclosed? | No | Yes ($115K) | -- |
| Territory protection | None | Geographic | -- |
| SBA default rate | 7.5% | 1.8% | 7.3% |
| Term length | 5 years | 5 years | -- |
The $2,000 franchise fee: what it really means
The $2,000 franchise fee sounds almost too good to be true, and in a sense it is. The low fee exists because Kumon's revenue model is built on the per-student royalty, not the upfront fee. The franchisor makes money when you have students, not when you sign the agreement.
This aligns franchisor and franchisee incentives, which is positive. But it also means the total cost of the franchise relationship over a 5-year term can far exceed what a traditional $30K-$50K franchise fee with a 5-6% royalty would cost, depending on your enrollment numbers.
The bottom line
Kumon offers the lowest barrier to entry in the education franchise space: $120K midpoint investment, $2,000 franchise fee, minimal build-out requirements. For a career educator or someone passionate about tutoring, the brand has recognition and a proven method.
But the FDD raises three concerns: no territory protection, no financial performance disclosure, and a shrinking system. If you are comparing education franchises, Mathnasium offers a similar investment level with geographic territory protection, disclosed financials, and a lower SBA default rate. Read the full comparison on our Kumon profile and Mathnasium profile.
Related franchise research
Continue your research with our Mathnasium franchise analysis, best franchises under $100K, and cheapest franchises analysis.
Research Kumon further
- 📄 Download the Kumon FDD summary — $5 per brand
- 📞 Get Kumon's verified franchisee contacts — $49 per brand. Call real owners before you sign.
- 📊 Category profitability report — $99. See how Kumon ranks against every competitor.
Frequently Asked Questions
- How much does a Kumon franchise cost?
- A Kumon franchise costs $73,783 to $165,920 in total investment, per the 2024 FDD. The franchise fee is just $2,000, the lowest of any franchise brand we track. The midpoint investment of approximately $120,000 is well below the Education category average of $765,000.
- How does Kumon's royalty work?
- Kumon does not charge a percentage royalty. Instead, franchisees pay $36 per month for each full-paying student and $18 per month for each partial-paying student. For a center with 200 students, this would equal approximately $7,200 per month or $86,400 per year in royalty payments.
- How does Kumon's royalty compare to Mathnasium?
- Kumon charges per-student royalties rather than a percentage of revenue, making direct comparison complex. Mathnasium charges a 10% royalty on gross revenue. The key difference: Kumon has no territory protection while Mathnasium provides geographic territory. This makes cannibalization risk a major factor in the Kumon model.
- How many Kumon locations closed last year?
- Kumon has experienced unit fluctuations in recent years. The lack of territory protection means multiple Kumon centers can open in the same area, creating direct internal competition. The 7.5% SBA default rate across 53 loans reflects these competitive pressures.
- What does a Kumon franchise owner's daily schedule look like?
- Kumon is strictly an owner-operator model: corporate requires the franchisee to be the center's instructor and run day-to-day operations personally. A typical schedule includes 4-6 hours of afternoon and evening instruction (when students arrive after school), plus administrative time for grading worksheets, parent communication, and marketing. Most centers operate Monday through Friday with Saturday morning sessions. This hands-on requirement limits scalability to a single location for most owners, which is a key tradeoff for the low $73K-$166K investment.