Franchising and the Indian Preschool Industry

Though at a nascent stage, the Pre-school industry in India with a current estimated size of Rs 7000 crores, is expected to top $ 1 billion by 2012, clocking a growth of over 28 percent per year. And taking advantage of this huge growth opportunity, most of the players are out to scale up their operations through the franchise route. There is a huge growth opportunity in the sector and most players have scaled up their operations through the franchise route. 

By Priyanka Kapoor

As three-year-old Sanika’s parents shifted from Gurgaon to Bangalore, her mother’s biggest concern was putting the child in a pre-school similar to her last one. Much to her relief she found exactly the same one. With pre-school franchises growing across the country, life has become much easier for young parents with transferable jobs. “My biggest concern was that Sanika should not feel uprooted and alienated,” says Sanika’s mother Nidhi Pandey, a housewife. “Since she was used to the toys, classroom set-up and general ambience in her previous pre-school there was not much issue settling down here.”

Playschools, popularly known as pre-schools cater to children between the age of one and a half and four years, the time when children are too young to start formal education. The concept of pre-schools is relatively new in India, but the trend is fast growing due to increasing awareness about the fact that about 40% of a person’s ability to learn is developed in the first four years of his life. It is an environment which imparts a smooth transition to a child from informal homely atmosphere to a formal schooling set-up and hence passion and care are two most important ingredients of this segment.

The transition, too, has been relatively painless for the operators behind these franchises. In several cases, these franchisees are housewives looking to gain fully utilize their time. Unlike schools that run from nursery to class 12, which largely are mandated by states to be run by non-profi t trusts, pre-schools can be set up as profi t companies. And with increasing awareness among parents about the benefits of a quality preschool education, the school chains and creches, are reportedly turning profi table within the first year—quite uncommon in the franchise model.

Lina Ashar, founder of Brainworks and Kangaroo Kids Education, elaborates,“This is a critical period in a child’s life when specific types of learning take place. The brain is especially receptive to stimulation in the area of language, for example, during the first three years. Therefore, children that are exposed to speech (talking, reading, singing, etc) on a regular basis, exhibit language skills that far exceed those with little verbal stimulation.” Lina, along with many specialists in the educational fi eld are now pitching this concept and stressing towards the importance of pre-schools in a child’s life. Even parents are realizing the signifi - cance of building a foundation for their kids, thanks to tough competition with regards to school admissions.

They no longer go for any neighborhood play school or day care center but are on the lookout for a pre-school with a reputed name and infrastructural facilities for their child’s overall development. Several pre-school chains have already opened up in the past few years to cater to the growing need. But with around 126 million children expected to be in the age group of 0 to 4 by the end of this year, the demand for pre schools in the organized segment may well soar like never before.

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