FranchiseWorks.com: Ken, can you tell us a little bit about how LearningRx got started?
Mr. Ken Gibson: We had been licensing our brain training concepts to physicians, health, mental health professionals and educators and then training them on how to do it. In 15 years we've trained approximately 1000 people in our technology, but, the problem was that many of them were not helping a whole lot of people because of all the other things they did as part of their professions.
So in 2002 we opened up a center basically to show and prove to individuals that, if all they did were the things that we provided, they could be successful. From August 15th to the end of the first year, which was four and a half months, we had generated over $258,000 in fees, which proved that this was a healthy concept, a financially healthy concept.
At that point we decided that what we had to do is not only teach people our program on how to train the brain and get big results, but we had to also show them how to run a business, hire people, control quality, handle the finances, how to make a sale, how to market, and all the other things involved. At that point, we decided to go into franchising.
FranchiseWorks.com: So, you’ve really been franchising since 2002?
Mr. Ken Gibson: Well, we started franchising in July, 2003.
FranchiseWorks.com: Well, we know that franchise ownership isn’t for everyone. What qualities do you guys look for in your ideal candidate?
Mr. Ken Gibson: They need to have a lot of passion for people and really want to help them succeed and do better in life. They need to have the finances available so that they can cover their time till break-even.
They have to be able to manage people by serving people. They need the ability and the willingness to add to their staff, people whose skills they need because they don’t have, such as maybe sales or marketing. They need to be planners.
What’s really important for us is values. We’re dealing with kids. We’re dealing with families and since we are in partnership with them, we want people of integrity, people that believe in excellence, people that share and serve and also can have fun in business.
FranchiseWorks.com: What do you think is the single best reason you can give someone to invest in your franchise?
Mr. Ken Gibson: I think we are in an exploding niche. We are the first ones in it, and, if we can grow a little bit more, we’ll own that niche and control that niche. There’s not many times people get an opportunity to go into blue oceans where we don’t have a competitive group doing the same thing. We have the opportunity to be it.
I don’t see any end to it. It’s like being in physical fitness back 30 years ago when it started taking off. We’re in mental fitness, and it’s just beginning to take off.
I just looked at a report that shows that this market is growing. The brain training market is growing at a 100 percent rate every two years.
FranchiseWorks.com: Well, you mentioned that there aren’t a lot of competitors in your space right now. Can you really target any competition directly? And if so, what do you think separates you or offers a LearningRX franchise that competitive advantage?
Mr. Ken Gibson: Even though we don’t have competition in the sense they don’t provide the same service as we do, we have competition in that other people seek to help other people learn better, and so the traditional tutoring business would be a competition.
In a sense, schools are our competition. Any professional that may deal with kids that have difficulty learning becomes a little bit of competition. I think the basic difference between us and them is that they are treating symptoms and we treat causes. We determine why the individual is having a problem performing or learning and get to the causes and the underlying mental skills and tools that are required, and make a difference in those. It’s like if you’re planting seed on hard ground and it’s not growing very well, it’s because the ground isn’t tilled. And we are tillers of the ground or tillers of the mind to make that mind work a whole lot better, a whole lot faster. So, learning is easier, faster, and better.
FranchiseWorks.com: What are some of the biggest challenges your franchise owners face, and what is your company doing to address those challenges?
Mr. Ken Gibson: Three challenges. One, the fact that we don’t have a brand that is recognizable across the country, and that is due to our size. So, it’s important for us to grow relatively quickly in the next four or five years so that we own our market.
Number two, the cost of a prospect. It’s expensive being a new prospect, partly because we are providing a new service with a new brand, and that always costs more money than something that is already established. So, we need to educate more, which gives us some advantages, because education is a good way of reaching people. What we’re doing about that is we’re gaining a presence on the Internet, and we’re increasing that significantly. We want to be the presence on the Internet in our keywords and phrases. In the past six months, we have increased almost tenfold our response from the Internet.
The other thing we’re doing is we provide services that people talk about. And we have a very high, on a scale of zero to 10, our students and parents rates us at 9.3 in terms of how likely they are to refer others to us. And so, word of mouth is really big, and building on that and referrals is the areas that, as we get better at that, we’ll reduce our cost of gaining a prospect.
The third thing is the cost of administration. Part of it is because we want to wow every single client we have, and we may be spending a little bit and doing too much to wow them. Maybe if we cut out half the things we’re doing, we’ll have just the same wow. We have to experiment with that.
But also, the administration of working with a location, a student, a time, a trainer, and putting that all together can be too much administration. We’re in the process of building Internet digital processes to ease that expense. We’ve got to figure out how to simplify some of the things that we’re doing.
FranchiseWorks.com: Well, you’ve touched on something else we wanted to talk about, which is starting the franchise business itself from the franchisee’s perspective. We know that starting a franchise business, like any business, requires a lot of work. What do you tell prospective franchisees to help them have realistic expectations before they purchase a LearningRX franchise?
Mr. Ken Gibson: I think they have to realize that going into business is not an automatic successful thing, that in if they were to go into a non-franchised business, there’s a better chance that they are going to fail than they are going to succeed. We keep hearing the figure that only 20 percent of non-franchised businesses survive after five years. Whether it’s accurate or not, we know it must be close.
In the franchise business, you maybe almost turn that around. I think we’ve been talking about an 80/20. I think it’s probably truer to a 35 percent fail, but 65 percent succeed after five years. And so, there’s some help there.
They have to realize that they have to work at this, and they have some responsibilities. And I basically tell our people when they come to see us that we have a tremendous product. We have a product that is unmatched. We have a product that nobody else has. So, we’ve got something special. Part of our job is to be stewards of that, and part of that is to make sure a lot of people get the help that we can provide. It’s their job, the franchisee’s job, to market, make this product available, sell the product and serve the student and their parents and families in their area. That’s their job.
There’s a part that LearningRx brings to it, a part that they have to bring and it takes both of us doing it to be successful. I want to examine how well they think we can do our part, like when they evaluate us, and it’s my job to determine how well they can do their part as I select them.
FranchiseWorks.com: Where do you see LearningRX going over the next few years? Growth, new services, changes in operations?
Mr. Ken Gibson: The expansion of our product will start increasing. We’re a small company and we don’t want to chase too many rabbits, but there’s a lot of rabbits out there for us to chase. Until we can handle the first few rabbits, we’re not chasing the others.
Some of the places that our business is going, besides just working with a student that’s struggling, which would include learning disabilities, dyslexia and attention deficit disorders, or those kids that would be considered slow learners, we are going to be going into the schools.
We already are moving in that direction. We’ve created digital products so that we can bring our program to a cost-effectives basis for that. Working with prison systems. Working with government workforces for people that are unemployed that need to learn better and easier.
A little bit later, we see us possibly going into the corporate world or the sports world, but we’ve got new products that deal with the preschoolers, because a lot of learning problems you can prevent. We have products for senior citizens, because there’s going to be a boomer where we’ll move into that area, where they're concerned about the lack of mental abilities as they get older and they live longer, and those things can be changed. We can boost that. We can reverse the effects of loss of processing abilities as one gets older. Those are some of the primary areas we’re moving into.
Also, right now, we’re working with a number of TBI--that’s traumatic brain injury--we’re working with soldiers coming back from Iraq right now. But, there’s a lot of people that have been in accidents that have had head blows that affect their short-term memory, their ability to process information.
We’re really getting tremendous results, more so than almost any other program that I’m aware of. In fact, more so than any program that I’m aware of, and so that’s another market for us.
FranchiseWorks.com: It sounds like you have a product offering for pretty much any age bracket in the US, or abroad, for that matter?
Mr. Ken Gibson: You know, in a population of 100,000, there might be 20 dentists that service that population. There is no one else that has a brain training or does brain training like we do.
FranchiseWorks.com: Well, do you think your franchisees will be able to establish partnerships with local schools, hospitals, and really become a service provider for these types of organizations?
Mr. Ken Gibson: Some of those are going to take some work on our part and/or their part, and some of them are just coming to us. I was in a meeting yesterday, which was a follow-up to a meeting I had two weeks before that, where we had a hundred school superintendents, principals, administrators, most of which were private schools, meet with me and want to learn what we’re doing. To the letter, almost every single one wants to implement brain training within part of their curriculum in their schools.
One, it differentiates those schools, but also it meets a need because kids, particularly inner-city kids, are having such a difficulty learning, that tutoring isn’t doing the job.
A normal tutoring program in a whole course of a year might improve that person’s reading ability two to three weeks after a whole year of work. That’s not much. And we’re talking about changes of three to four years' improvement in six months. That’s a dramatic difference.
So, they’re approaching us. In fact, I had a couple of senator aides in the meeting I had yesterday, US senator aides here, their top people, just learning what we’re doing so that they can help us make some of the connections.
FranchiseWorks.com: For prospective franchisees, do you have any final words or encouraging advice for someone considering a LearningRX franchise?
Mr. Ken Gibson: Well, if they’re passionate about helping people, if they are willing to and can take a look at our product and be happy with it, if they can explore and find out and discover that our desire for excellence in the franchise delivery system is as great as what we have for our product, that we’re a young organization, we’re only a few years out of the blocks but we’ve grown pretty rapidly and I think we’re doing a lot of things right. If they can see that and be comfortable with that, and if they really believe that they can sell and market this product in the territory they want to live in, then they ought to be contacting us.