Moneyweb investigates KleuterZone, a national preschool franchise that advertises high returns on investment (36% to 62.4%). Concerns arise from prospective and existing investors regarding the sustainability of these returns. KleuterZone founder Anthonie Bougas claims the schools generate sufficient profits, stating that investors who haven't received the expected returns invested in schools operating below full capacity. Bougas also highlights the franchise's aggressive marketing campaigns and its growth from a single school in 2018 to a claimed network of 120 schools today.
The founder of the franchise has a background in entertainment and says the brand spent nearly R14m on advertising on Facebook last year. Picture: Moneyweb
This is based on KleuterZone’s website stating it has attracted 1 300 clients, and from marketing material stating that minimum investments amount to between R200 000 and R300 000. If the school runs at full capacity, the projected returns are R3 200 per month per R100 000 investment. This represents a return on the investment of 38.4%.
Bougas stated that they are between R4 800 and R5 200 per month per R100 000 invested, translating to returns of 57.6% to 62.4% per year.In their interaction with Moneyweb, two investors have reported discrepancies between expected and actual payouts. They claimed Bougas preferred to interact telephonically and that interactions mostly related to the Bougas denied the claims and said KleuterZone provides investors with detailed information regarding the number of children attending the school, the total capacity, the quantum of school fees and the nature of monthly running expenses.
After deductions for tax and a 15% administration fee, an amount of R120 300, or 31.5% of the total revenue, is available to distribute to investors.‘Returns easily achieved’ and aggressive marketing The media release reveals that KleuterZone spent nearly R1.1 million on television advertisements in January 2024.
Given KleuterZone’s claim of 120 schools, it is notable that Bougas provided unaudited management accounts for a newly acquired school and not audited or reviewed financial statements of an established and best-performing school. After more than a week, Moneyweb approached Van Zyl and queried why no response had been forthcoming.
A prospective investor provided Moneyweb with a proposed investment contract KleuterZone sent to him after he expressed interest in investing. The agreement, signed by Bougas but not the proposed investor, offered the investor a 5% interest in the school for R500 000.
Finance Preschool Franchise Investments Returns Marketing Financial Performance
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