Prep Academy TutorsFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
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]. The 2025 FDD does not disclose unit-level revenue (no Item 19). Verdict grade: B. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $53K – $66K
- 14th pct Education
- Avg gross sales
- N/A
- 47th pct Education
- Royalty
- 8.0%
- 31st pct Education
- Units
- 16
- 33rd pct Education
- SBA default
- N/A
Quick verdict · Education · color = vs category peers
Green = >15% above Education avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
The franchisor's auditor raised doubt about continued operations. This is a serious risk signal.
Bottom line
- Total investment $53K – $66K including a $43K franchise fee, 8.0% ongoing royalty.
- No Item 19 financial performance data disclosed. The franchisor chose not to publish revenue figures.
- Verdict B (Above Average) with a risk score of 54/100.
- Auditor disclosed a going-concern note, which flagged doubt about the franchisor's ability to continue operations. Verify against the latest FDD.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Prep Academy Tutors USA, Inc.
- Parent company
- 2496939 Ontario Inc.
- Incorporated in
- DE
- HQ
- 191 Deloraine Avenue, Toronto, Ontario, Canada M5M 2B1
- Auditor
- SRCO, C.P.A., Professional Corporation
- Audited financials
- Franchisor revenue
- $67K
- vs $174K prior year
- ⚠ Going-concern note
- Disclosed in FDD 2025
- Auditor flagged doubt about continued operations. Verify against the latest FDD before deciding.
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
Prep Academy Tutors franchisees operate one-on-one and small-group tutoring services in protected territories, delivering personalized academic support across K–12 subjects. Day-to-day operations include recruiting/managing tutors, scheduling sessions, client acquisition and retention, curriculum delivery oversight, and payment processing. Most franchisees serve as owner-operators or managers, handling client relationships and tutor supervision directly.
- CEO
- Adrian Dougherty
- Founded
- 2020
- FDD year
- 2025
- States available
- 13
FDD Item 7 · 2025 filing · 9 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
- Better than avg vs category
- Liquid capital req'd
- $3K – $8K
- Better than avg vs category
- Franchise fee
- $43K – $43K
- Better than avg vs category
- Royalty
- 8.0%
- percentage_of_gross · 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 |
| Total fee load | 10.0% of rev |
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
vs Education averages
How Prep Academy Tutors Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 16
- Opened
- 8
- Last reporting year
- Closed
- 1
- Turnover rate
- 6.3%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- +77.8%
- Net unit change last year
- 3-yr CAGR
- Outlier (see FDD)
- Likely small-sample artifact
3-year detail · Item 20
- Opened (3yr)
- 8
- Closed (3yr)
- 1
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
- 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 20 · 9 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Available to sell in · Item 12
- Illinois
- Indiana
- Maryland
- Michigan
- Minnesota
- New York
States where the franchisor is registered to sell new franchises (FDD registration filings).
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.
- Total loans
- 11
- Loan volume
- N/A
- Amount data pending
- Median loan
- N/A
- Charge-off rate
- N/A
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 0
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Early-stage tutoring franchise with concerning financial opacity, no Item 19 disclosure, and unclear royalty floor structure that could make unit economics unviable for low-revenue locations.
Litigation (Item 3)
0 case reference(s): 0 pending, 0 settled.
Largest disclosed settlement: $43,000
Bankruptcy (Item 4)
Disclosed in last 7 years
BANKRUPTCY No person previously identified in Items I or 2 of this addendum has been involved as a debtor m proceedings under the U.S. Bankruptcy Code required to be disclosed in this Item. Item 6 OTHER FEES Regional advertising cooperatives of the nature described in Items 6 and 11 of the disclosur
Audited financials (Item 21)
Yes · SRCO, C.P.A., Professional Corporation⚠ Going-concern note flagged
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Must buy proprietary products: No
- Restricted to system-approved products: No
Score breakdown · what drove the 54 / 100 rating
- 01MINORNo average revenue or net income disclosure (Item 19) — impossible to validate ROI claims or profitability benchmarks
- 02MINORVery small system with only 16 units limits peer support network and economies of scale; high growth rate (77.8% YoY) may indicate instability or cherry-picked data
- 03MINORMonthly minimum service fee structure creates fixed overhead risk regardless of actual sales — unclear what the minimum is and how it impacts franchisees with slower months
- 04MEDHigh initial investment ($52.6k–$65.6k) + 8% royalty with no disclosed average revenue means breakeven timeline is completely opaque
- 05MINORProtected territory is positive, but 10-year term is longer than industry standard (5–7 years typical) and limits exit flexibility
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Territory type | Geographic |
| Protected territory | Yes |
| 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 |
| Right of first refusalℹ | Yes |
| Termination notice | 5 days |
| Curable defaultsℹ | 3 |
| Mandatory arbitration | No |
| Governing law | New York |
| Litigation count | 0 |
View Item 3 litigation summary
0 case reference(s): 0 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 28 hrs
- On-the-job training
- 15 hrs
- Training location
- On-site and corporate
- 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
FDD download
Prep Academy Tutors · FDD (2025) PDF
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 does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
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 3 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 risk score of 54 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. 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.
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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.