Estimated pre-tax owner-operator benefit for one mature U.S. Kumon Math and Reading Center. The base scenario is about $106,000 a year. These figures are not official Kumon earnings. They combine 2026 Franchise Disclosure Document operating obligations with selected official tuition observations, a historical system enrollment reference, and a U.S. government expense benchmark.
Legal franchisor: Kumon North America, Inc. Disclosure: 2026 U.S. FDD, issued March 27, 2026; Item 19 makes no financial performance representation. Applicable operation: a Kumon Center offering Math and Reading programs from an approved retail site, with a full-time Instructor. External inputs: official U.S. Kumon tuition pages, the IRS 2023 Nonfarm Sole Proprietorship income statement for Educational Services, the Census definition of NAICS 611691, and FTC guidance. Checked: July 20, 2026.
The 2026 FDD supplies the royalty formula, required marketing obligation, initial operating-cost ranges, center format, owner-participation rule, and outlet counts. It does not disclose average sales, median sales, operating profit, net income, owner compensation, or cash flow.
The earnings range depends materially on modeled subject enrollments, selected local tuition observations, annualized Item 7 cost ranges, and a broad government benchmark rather than a same-brand Item 19 sales or profit population.
Before personal income taxes, financing principal, and cash capital spending.
Includes compensation for the owner’s required full-time operating labor.
Average billed subject enrollments; one student taking two subjects counts twice.
Per full-paying student enrolled in each Subject-Franchise.
Per subject; these selected center prices are not a system average.
Derived from specified IRS Educational Services expense categories, not Kumon units.
What does Kumon’s 2026 Item 19 actually report?
Official answer: no sales or earnings figures. Item 19 states that Kumon North America, Inc. does not make representations about future franchisee financial performance or past performance of franchised or company-owned outlets. That means there is no official average unit volume, median revenue, operating margin, owner salary, or owner profit to use as the primary earnings answer. Source: 2026 Kumon North America, Inc. FDD, Item 19, p. 47.
The official U.S. Kumon franchise website gives the same practical answer: independently owned centers do not report total income to the franchisor, so Kumon does not publish a hard owner-income number. The Federal Trade Commission’s Item 19 guidance explains why this matters: a franchisor does not have to make a financial performance representation, but any sales or earnings claim it does make generally belongs in Item 19 and must have a reasonable basis and written substantiation.
Does Item 20 provide a useful performance sample?
Official answer: it provides system structure, not economics. Item 20 shows 1,705 franchised U.S. outlets and five company-owned outlets at the end of 2025, but it does not report the revenue or profit of those outlets. The falling company-owned count also makes company-operated economics a weak proxy even if separate company results were available.
| Year | Franchised outlets at year-end | Company-owned outlets at year-end | System net change |
|---|---|---|---|
| 2023 | 1,637 | 22 | +13 |
| 2024 | 1,671 | 18 | +30 |
| 2025 | 1,705 | 5 | +21 |
Source: 2026 Kumon North America, Inc. FDD, Item 20, Table No. 1, pp. 47–48. Outlet growth or contraction does not establish outlet-level profitability.
How is the annual earnings range calculated?
Estimated answer: annual tuition revenue minus modeled unit-level expenses and disclosed recurring franchise fees. The model uses average monthly subject enrollments, because tuition and the principal royalty are charged by subject. It assumes a mature center that has completed the Temporary License Period, operates for 12 months, and bills each modeled subject enrollment throughout the year.
The revenue inputs are not Item 19 results. Kumon’s consumer FAQ says tuition varies by location and is normally charged per subject. Current official center pages show examples including $170 per subject per month in Hopkinton, Massachusetts, $190–$200 in Reading, Massachusetts, and $220 in Parkland, Florida. These are selected local prices, not a national average or a promised pricing range.
For an enrollment reasonableness check, a 2018 official Kumon system release reported more than 280,000 U.S. subject enrollments across 1,520 centers, or roughly 184 subject enrollments per center. That historical snapshot is too old to serve as a current performance claim, but it provides an order-of-magnitude check for the 125, 160, and 200 scenario inputs.
| Scenario | Revenue inputs | Annual tuition revenue | Other-cost factor |
|---|---|---|---|
| Conservative | 125 active subjects × $170 × 12 months | $255,000 | 21.2% |
| Base | 160 active subjects × $190 × 12 months | $364,800 | 18.2% |
| Upside | 200 active subjects × $210 × 12 months | $504,000 | 15.2% |
The 18.2% base other-cost factor is derived from selected 2023 IRS Educational Services sole-proprietor expense categories: depreciation, insurance, legal and professional services, office expenses, repairs, supplies, business taxes, and utilities, divided by business receipts. The conservative and upside scenarios apply plus or minus three percentage points. The IRS Statistics of Income source is broad and includes many businesses unlike a retail Kumon Center, so it is a benchmark rather than same-brand evidence. The Census NAICS 611691 definition confirms that exam-preparation and tutoring businesses include academic tutoring services and learning centers, but the IRS table is reported at the broader Educational Services sector level.
- Assistant payroll: $56,000, $50,000, and $64,000. The first two values are within the annualized range implied by Item 7’s three-month payroll estimate; the upside value adds staffing for the larger modeled enrollment.
- Occupancy: $66,000, $60,000, and $78,000. These figures sit within the $48,000–$120,000 annualized range implied by Item 7’s three-month rent estimate before the first-year rent subsidy.
- Royalty: $38 per full-paying subject enrollment per month after the Temporary License Period.
- Marketing and lead system: $3,600 required annual marketing, $4,800 recommended local advertising, and $600 for the lead-management system, totaling $9,000.
- Not modeled: registration or materials revenue, the $30 initial-enrollment royalty, partial-payment students, discounts, uncollectible tuition, optional insurance pricing, and unusual one-time fees because the required volume data are not disclosed.
Initial investment treatment: the FDD’s $101,630–$233,780 initial investment range is not an annual operating expense and is not subtracted from one year of tuition revenue. Financing payments and cash capital replacements must be modeled separately. Because the IRS other-cost factor includes depreciation, the scenario result is not a pure cash-flow measure.
Estimated annual owner-operator benefit by scenario
Modeled pre-tax operating benefit after unit-level expenses, including a broad depreciation proxy, before financing principal and personal income taxes.
Interpretation: the range is wide because enrollment, tuition, fixed occupancy, staffing efficiency, and broad operating-cost assumptions compound rather than move independently.
Sources: 2026 Kumon North America, Inc. FDD, Items 6, 7, 15, and 19, pp. 8–21, 39–41, and 47; official Kumon center tuition pages; IRS 2023 Nonfarm Sole Proprietorship Table 2. Values are independent calculations rounded to the nearest $1,000 for the chart.
What turns $364,800 of modeled revenue into about $106,000?
Estimated answer: payroll, occupancy, the per-subject royalty, marketing, and other operating costs absorb about $258,400 in the base case. The remaining $106,379 is estimated owner-operator benefit, not passive business profit and not after-tax take-home pay.
| Base-case bridge | Evidence treatment | Annual amount |
|---|---|---|
| Tuition revenue | Scenario: 160 subjects × $190 × 12 | $364,800 |
| Assistant payroll | Scenario within annualized Item 7 range | −$50,000 |
| Occupancy | Scenario within annualized Item 7 range | −$60,000 |
| Post-TLP royalty | Derived from official Item 6 formula | −$72,960 |
| Marketing and lead system | FDD obligations and recommended local spend | −$9,000 |
| Other operating expenses | 18.2% IRS benchmark applied to revenue | −$66,461 |
| Estimated owner-operator benefit | Independent scenario result | $106,379 |
Base-case revenue-to-benefit waterfall
Each expense reduces the running balance from modeled annual tuition revenue.
Interpretation: the royalty is a major variable expense because it is assessed per enrolled subject rather than as a percentage of tuition revenue. Local tuition therefore changes the effective royalty burden as a percentage of revenue.
Source and formula: same inputs as the base scenario table. Rounded chart labels reconcile to the unrounded result of $106,379.
Is this passive profit or compensation for running the center?
Official answer: it is an active owner-operator model. Item 15 requires an individual franchisee to instruct students personally, be at the Center during student sessions except in extraordinary personal circumstances, and devote full time to the franchise. Assistants may instruct only under the Instructor’s supervision unless Kumon grants an exception. A corporation or limited liability company must designate an approved Corporation Instructor who is personally responsible for operations. Source: 2026 Kumon North America, Inc. FDD, Item 15, pp. 39–41. The official Kumon buyer FAQ also states that the owner must devote full time to the Center.
Accordingly, the scenario result is labeled owner-operator benefit. It combines residual business economics with the value of work the owner is contractually expected to perform. It should not be compared directly with passive investment income, and it should not be read as profit after paying a market salary to a non-owner general manager.
- Owner compensation
- Not deducted. The modeled benefit includes compensation for the owner’s full-time instructional and operating labor.
- Manager compensation
- Not included because an absentee manager-run structure is not the standard FDD operating model. A Corporation Instructor still must satisfy the personal-responsibility requirement.
- Assistant payroll
- Included as a unit-level operating expense.
- Interest
- Excluded. Item 10 states that Kumon does not finance the initial investment, and borrower-specific interest terms are not available.
- Depreciation
- Included indirectly within the selected IRS other-cost ratio.
- Capital expenditures
- Cash replacement and remodel spending is excluded; depreciation is only a broad proxy and may not match actual cash needs.
- Debt principal
- Excluded and should be subtracted separately from owner cash flow.
- Personal income taxes
- Excluded. Entity structure, state, deductions, and owner circumstances determine after-tax take-home pay.
What if the Center is still in the Temporary License Period?
Derived answer: the royalty burden is higher. Item 6 lists $42.75 per full-paying subject enrollment per month during the Temporary License Period versus $38 after completion. At 160 full-paying subject enrollments, the difference is $9,120 a year: 160 × ($42.75 − $38) × 12. A center still in the TLP would therefore show roughly $9,120 less benefit than the base scenario, before considering partially exempt students, initial-enrollment royalties, or different operating conditions.
Which assumptions can move Kumon owner earnings the most?
Estimated answer: average billed subject enrollments are the largest driver, followed by local tuition, occupancy, and assistant staffing. The per-subject royalty makes enrollment growth valuable but not costless, while fixed rent can sharply compress a low-enrollment center’s economics. The largest unresolved issue is that the FDD provides no current same-brand sales distribution against which to test the revenue scenarios.
- Monthly subject enrollments: verify average, low, and peak billed Math and Reading enrollments separately; do not substitute unique student count for subject count.
- Tuition realization: verify list price, discounts, sibling policies, partial months, scholarships, refunds, late payments, and uncollected balances.
- Royalty status: identify whether each Subject-Franchise is in the TLP or post-TLP and quantify initial-enrollment royalties.
- Assistant labor: obtain hours, wage rates, payroll taxes, workers’ compensation, and staffing ratios for comparable center sizes.
- Occupancy: include base rent, common-area maintenance, property tax pass-throughs, utilities, insurance requirements, and scheduled lease increases.
- Owner hours: separate economic return on capital from compensation for full-time instruction, parent meetings, grading, planning, marketing, administration, and supervision.
- Capital and debt: model loan interest, principal payments, equipment replacement, signage, leasehold refreshes, and required upgrades separately.
What does the model still omit?
Uncertain answer: several items could raise or lower actual cash flow. The model excludes registration and materials revenue because center-level enrollment and fee-realization data are unavailable. It also excludes the FDD’s $30 initial-enrollment royalty for the same reason. It treats all modeled subject enrollments as full-paying and continuously billed, which can overstate revenue. Conversely, it does not include possible ancillary registration or materials collections. The selected IRS ratio omits broad “other business expenses,” vehicle costs, travel, meals, contract labor, interest, and cost-of-sales categories because their comparability is unclear; an actual center may incur some of them.
The Item 7 rent and payroll values cover the initial three-month operating period, not a mature annual center. Annualizing those ranges is an editorial scenario method, not a franchisor representation. The 2018 enrollment reference is historical, the local tuition pages are selected observations, and the IRS Educational Services data include many sole proprietorships that do not resemble a franchised retail learning center. Conservative, Base, and Upside are sensitivity cases, not probabilities or forecasts.
What should a buyer verify before relying on any earnings estimate?
Decision answer: obtain center-level evidence that matches the specific territory, lease, maturity, and owner role. The scenario range is useful for testing whether a proposed center can support the owner’s income needs, but the purchase decision should turn on verifiable operating records and current franchisee experience.
- Read the complete current Item 19 and ask for written substantiation of any sales, profit, salary, or income statement made outside the FDD.
- Use Item 20 contacts to interview current and former franchisees with similar rent markets, center age, session schedule, and enrollment scale.
- Request 24 to 36 months of monthly subject-enrollment reports and profit-and-loss statements for any existing Center under consideration.
- Reconcile tuition billed to cash collected, then reconcile every royalty debit to Math and Reading subject counts.
- Separate the Instructor’s labor value from residual business profit and record actual weekly owner hours.
- Build a downside case that includes TLP royalties, lower retention, higher assistant wages, lease escalations, financing, and capital replacements.
What is the strongest defensible annual earnings range?
Approximately $13,000 to $185,000 in estimated pre-tax owner-operator benefit for one mature, post-TLP U.S. Kumon Center, with a base scenario near $106,000. This is a scenario-based result with limited evidence confidence, not an official Item 19 earnings figure. Average billed subject enrollments multiplied by realized local tuition are the most important earnings driver. The largest unresolved uncertainty is the absence of current same-brand sales and profit distributions. A buyer should verify Item 19, obtain substantiation for any earnings claim, and test the model against franchisee interviews and center-level enrollment, collection, payroll, rent, royalty, capital, and owner-hour records.
All figures are pre-tax and should not be interpreted as guaranteed income, average owner salary, passive return, or after-tax take-home pay.