There are Kip McGrath franchises all over Australia. What started out as a simple tutoring service back in 1976 is now an ASX-listed business which is 565 franchises strong. Founders Kip and Dugnea McGrath started Kip McGrath after noticing that “some children were not getting the individual attention they need in school to learn to read and do mathematics”.
That same principle still drives the business but technology has revolutionised Kip McGrath. While it took five years for Kip McGrath to make its first million dollars the business is now growing at an incredible rate of 575%. The growth has been spearheaded by Kip and Dugnea’s son, Storm McGrath, who now heads up the family business.
Storm McGrath says the Kip McGrath business has undergone a “transformation” over the last four years from franchisees using written material and a basic computer program. “We now have a cloud deployed back office and curriculum business. Students now log in to the program and receive tuition face to face or online with a tutor,” McGrath says.
All new Kip McGrath franchises use centralised payroll, profit and loss, BAS statements and cash flow management along with a global payment system using PayPal and Google AdWords marketing for all franchisees. But this transformation hasn’t come easily though or without a cost. “We have had to spend all of our profit for the past fours years to make our business relevant for the world today,” McGrath says. “In particular our customers are young and they want the technology to be relevant.”
This has caused “a lot of angst” with franchisees who do not want to change. “We had to choose a path and head down it because if we did not we would be out of business by now,” McGrath says. “As Henry Ford once said, ‘If I asked people what they wanted they would have asked for faster horses'.” McGrath has his sights set on further innovation, with online tutoring with real teachers the “next big move” for the business.
Kip McGrath plans to have just as many online students as face to face in five years. “If you have a clear goal and belief, you can overcome anything,” McGrath says.
KME Price at posting:
32.0¢ Sentiment: Hold Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)