Thinking about opening a preschool? Here's a realistic cost picture, based on published franchise terms and conversations with centre owners.
The two routes
Route 1: Take a franchise. Pay a brand fee, follow their playbook. Route 2: Go independent. Keep the royalty, build everything yourself.
Typical franchise economics (tier-2 city)
| Item | Range |
|---|---|
| Franchise/brand fee (one-time) | ₹1 to 15 lakh depending on brand tier |
| Interior setup & equipment | ₹8 to 25 lakh for ~2,000 sq ft |
| Curriculum kits & materials | ₹1 to 3 lakh |
| Royalty | 10 to 20% of collections, ongoing |
| Working capital (first year) | ₹5 to 10 lakh |
Budget brands (Hello Kids famously markets a "no royalty" model) can bring entry costs under ₹10 lakh total. Premium brands in metros can cross ₹50 lakh.
The costs everyone underestimates
- Rent deposits, 6 to 10 months' deposit is standard for school properties
- The second year, enrolment ramps slowly; most centres don't fill before year 2 to 3
- Teacher salaries during summer, you pay 12 months, parents pay 10 to 11
- Compliance, local municipal trade licence, fire NOC, and in some states education department registration
Revenue reality
A 2,000 sq ft centre at healthy occupancy runs 60 to 100 children. At an average annual fee of ₹35,000 to 60,000 (tier-2), that's ₹25 to 50 lakh gross, before rent (typically ₹40 to 80/sq ft), salaries (₹12,000 to 25,000/teacher/month), royalty, and marketing.
Realistic break-even: 18 to 36 months. Anyone promising 6 months is selling you a franchise, not a forecast.
Franchise or independent?
Take a franchise if this is your first education venture and you value a ready playbook. Go independent if you have an education background, a strong local network, and the patience to build reputation from zero. The royalty you save is real money, but only if enrolment comes.