Prep Academy Tutors Franchise Cost, Revenue & Review 2026
- Investment
- $53K – $66K
- Disclosed sales
- not disclosed
- SBA charge-off
- Not SBA-matched
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
Prep Academy Tutors is a tutoring franchise offering one-on-one and small-group in-home and online tutoring for K-12 students. Franchisees run local operations, managing tutors, scheduling, and enrollment.
FranchiseVerdict summary · 2026
A Prep Academy Tutors franchise requires a total initial investment of $53K – $66K, including a $43K franchise fee and an ongoing 8.0% royalty[2]. This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✗ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored5 of 5 headline figures on this page cite a page of the filing.
Overview
- Investment
- $53K – $66K
- 13th pct Education
- Avg gross sales
- N/A
- Royalty
- 8.0%
- 44th pct Education
- Units
- 16
- 36th pct Education
- SBA charge-off
- N/A
Quick verdict · Education · color = vs category peers
Green = favorable by >10% vs Education median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $53K – $66K including a $43K franchise fee, 8.0% ongoing royalty.
- RETURNSThis franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
- RISKVerdict B (Above average), verdict score 61/100 (higher is better).
- GROWTHPositive: net +7 franchised outlets in the latest year (8 opened, 1 closed); 1 signed but not yet open (Item 20).
- DATAThis franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Prep Academy Tutors USA, Inc.
- Parent company
- 2496939 Ontario Inc.
- FDD Item 1, page 6 of the 2025 FDD
- CEO title
- President and Director
- Adrian Dougherty
- Incorporated in
- Delaware
- HQ
- 191 Deloraine Avenue, Toronto, Ontario, Canada M5M 2B1
- Auditor
- SRCO, C.P.A., Professional Corporation
- Audited financials
- Franchisor revenue
- $174K
- vs $67K prior year
Independent franchisee associations
- Independent Franchisee Association
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Affiliated brands
- PAT Canada
Other brands the franchisor or its parent operates (Item 1).
Overview
About
- CEO
- Adrian Dougherty
- Founded
- 2020
- FDD year
- 2025
- States available
- 13
Can you afford it, and what does the money buy?
Entry cost runs 70% below the typical education franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown9 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $43K | $43K | |
| Inventory/Start-up Suppliesnot refundable | $2K | $2K | |
| Professional/Legal Feesnot refundable | $2K | $10K | |
| Equipment Purchasenot refundable | $1K | $1K | |
| Opening Advertisingnot refundable | $1K | $1K | |
| Insurancenot refundable | $500 | $500 | |
| Telephone and Internetnot refundable | $600 | $600 | |
| Rentnot refundable | — | — | |
| Additional Funds - 3 Monthsnot refundable | $3K | $8K | |
| Total initial investment | $53K | $66K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $53K – $66K
- Top 40% of category vs category
- Liquid capital req'd
- $3K – $8K
- Top 40% of category vs category
- Franchise fee
- $43K – $43K
- Top 40% of category vs category
- Royalty
- 8.0%
- Set by a formula · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 10.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 8.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $200 |
| Transfer fee | $2K |
| Renewal fee | $2K |
| Inventory (initial) | $2K – $2K |
| Total fee load | 10.0% of rev |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
Prep Academy Tutors makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. The return models need a revenue figure to start from, and the operating costs that turn gross sales into a profit are in no FDD. Enter your own and the calculator runs on your assumptions — nothing here is modelled until you do.
Returns model · single-unit ROIC
What would one Prep Academy Tutors unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for annual revenue, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
Financial Performance
No financial performance representation
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
Total ongoing fee load of 10.0% (near the Education median).
Disclosure
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator retention
System expanding at 433.3% CAGR over 3 years across 16 units — operators are staying and new ones are joining.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Education medians
How Prep Academy Tutors Compares
Category median of published Education brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 16
- Opened
- 8
- Last reporting year
- Closed
- 1
- Terminated
- 1
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 6.3%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- Outlier (see FDD)
- Likely small-sample artifact
- 3-yr CAGR
- Outlier (see FDD)
- Likely small-sample artifact
Last fiscal year · Item 20 exits and transfers
- Terminated
- 1
- Not renewed
- 0
- Transferred
- 0
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 1
- 0.06 per open outlet · Item 20 Table 5
- Projected new
- 1
- Franchisor's next-year forecast
- Ceased ops
- 0.1%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 13 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
13
states with franchisees (per FDD Item 12)
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Negative franchisor equity of -$224,190 and a net loss of -$152,345 on $173,992 revenue for a small 16-unit system that began franchising in 2020. No litigation, bankruptcy, or going-concern note, and audited, but negative equity plus operating losses stack as concerns; no Item 19.
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
No litigation disclosed in Item 3.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · SRCO, C.P.A., Professional Corporation
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Total revenue and net income figures are for franchisor Prep Academy Tutors USA, Inc. only (not systemwide franchisee sales); Item 19 discloses no financial performance representation for franchisee outlets.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: No
- Must buy proprietary products: No
- Restricted to system-approved products: No
Score breakdown · what drove the 61 / 100 verdict
- 01MINORNegative net worth -$224,190
- 02MINORNet loss -$152,345 on $173,992 revenue
- 03MINORNo Item 19; small/young system
- 04MINORNo litigation or going-concern; audited
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 10.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory population | 50,000 |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 50 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 45 days |
| Transfer requires consent | Yes |
| Termination notice | 5 days |
| Termination groundsℹ | 7 |
| Curable defaultsℹ | 3 |
| Mandatory arbitration | No |
| Governing law | New York |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation disclosed in Item 3.
Items 10, 11
Training & Operations
- Classroom training
- 28 hrs
- On-the-job training
- 15 hrs
- Training location
- On-site and corporate
- Ongoing training
- Required
- Site selection
- franchisee
- Franchisor financing
- Offered
- Item 10
- POS system
- Teachworks
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Teachworks
Item 20 · call current owners
Franchisee Contacts
37 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Prep Academy Tutors franchise?
The total investment to open a Prep Academy Tutors franchise ranges from $53K – $66K, with an initial franchise fee of $43K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Prep Academy Tutors franchise owners earn?
Prep Academy Tutors makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns Prep Academy Tutors?
Prep Academy Tutors is franchised by Prep Academy Tutors USA, Inc.. Its parent company is 2496939 Ontario Inc.. Source: FDD Item 1, 2025 filing.
What is Item 19 in the Prep Academy Tutors FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Prep Academy Tutors FDD and qualifies whose outlets they describe.
What is Prep Academy Tutors's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Prep Academy Tutors (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Prep Academy Tutors franchise locations are there?
As of their most recent FDD filing, Prep Academy Tutors has 16 total units in the United States, including 16 franchised units and 0 company-owned units. 8 new units were opened in the latest reporting year.
Is Prep Academy Tutors a good franchise to buy?
FranchiseVerdict rates Prep Academy Tutors as a B-grade franchise with a verdict score of 61 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.