Ten franchise brands run a preschool. Here they are beside the independent version of the same business, with each brand’s fees as it publishes them and worked out in dollars. A brand can bring customers an independent has to earn one by one. The question is whether it brings in more than it costs.
Typical for a preschool: $700k to $1.2M in sales, and the owner keeps 22% to 30% after paying for its own marketing. Change either to your own numbers.
Work each brand out at
How the two sides are counted
Sales. A brand’s name brings customers an independent wins one at a time, so each brand is worked out at the sales it reports where we have them, and at yours where we don’t.
Marketing. On your own you pay for all of it, about 3% of sales here (the SBA’s usual range for ongoing marketing). The ad fund does part of that job, so it is counted once, not twice.
Survival. New franchised businesses were about 5 to 6 points more likely to make it through their first two years in Census data, and about half of all new businesses close within five years. It is not in the dollars; each brand’s details give the sources.
Your own preschool and each brand, side by side
The independent version
Your own preschool
Built and run under your own name
Cost to open
$201k to $1.1M
Annual sales
$920ktypical
Franchise fee
None
Royalty + ad fund
Noneall marketing is yours
$239,200
The owner keeps in a year, after about $28k of marketing
Taking new owners
Building Kidz School
Preschool and child care
Total investment
$327k to $1.5M
Avg. annual sales
$811k to $1.1M
Franchise fee
$60k
Royalty + ad fund
7% + 1% of sales
$184k
The owner keeps in a year at $971k in sales (what it reports), after $78k to the brand
$55k less a year than on your own
Taking new owners
Ivybrook Academy
Half-day preschool
Total investment
$541k to $870k
Avg. annual sales
$839k to $858k
Franchise fee
$50k
Royalty + ad fund
7% + 1% of sales
$161k
The owner keeps in a year at $848k in sales (what it reports), after $68k to the brand
$78k less a year than on your own
Taking new owners
Kiddie Academy
Educational child care
Total investment
$590k to $8.5M
Avg. annual sales
$2.1M to $2.2M
Franchise fee
$150k
Royalty + ad fund
7% + 2% of sales
$408k
The owner keeps in a year at $2.1M in sales (what it reports), after $193k to the brand
$169k more a year than on your own
Taking new owners
The Learning Experience
Child care and preschool
Total investment
$650k to $800k
Avg. annual sales
Franchise fee
$60k
Royalty + ad fund
7% + 1% of sales
$175k
The owner keeps in a year at $920k in sales (your sales), after $74k to the brand
$64k less a year than on your own
Taking new owners
Lightbridge Academy
Child care and early education
Total investment
$835k to $8.1M
Avg. annual sales
Franchise fee
$50k
Royalty + ad fund
4% to 7% + 2% of sales
$175k to $202k
The owner keeps in a year at $920k in sales (your sales), after $55k to $83k to the brand
$37k to $64k less a year than on your own
Taking new owners
Children's Lighthouse
Child care and early learning school
Total investment
$940k to $8.8M
Avg. annual sales
Franchise fee
$60k
Royalty + ad fund
3.5% to 7% + 0.5% to 2% of sales
$175k to $207k
The owner keeps in a year at $920k in sales (your sales), after $37k to $83k to the brand
$32k to $64k less a year than on your own
Taking new owners
The Goddard School
Preschool and child care
Total investment
$1M to $8.9M
Avg. annual sales
Franchise fee
$135k
Royalty + ad fund
7% + 2% to 4% of sales
$166k to $175k
The owner keeps in a year at $920k in sales (your sales), after $83k to $101k to the brand
$64k to $74k less a year than on your own
Taking new owners
Celebree School
Child care and early learning school
Total investment
$1M to $3.6M
Avg. annual sales
Franchise fee
$75k
Royalty + ad fund
7% + 2% of sales
$175k
The owner keeps in a year at $920k in sales (your sales), after $83k to the brand
$64k less a year than on your own
Taking new owners
Primrose Schools
Preschool and child care
Total investment
$2.2M to $8M
Avg. annual sales
Franchise fee
$80k
Royalty + ad fund
7% + 3% of sales
$175k
The owner keeps in a year at $920k in sales (your sales), after $92k to the brand
$64k less a year than on your own
Taking new owners
Ivy Kids Early Learning Center
Child care and early learning school
Total investment
$5M to $5.9M
Avg. annual sales
Ask the brand
Franchise fee
$111k
Royalty + ad fund
7% + 1.5% of sales
$175k
The owner keeps in a year at $920k in sales (your sales), after $78k to the brand
$64k less a year than on your own
Free account
See all 10 preschool brands side by side
Every brand’s investment and fees, and what the owner keeps against running your own
The yearly sales the first 3 report, and a plus to add brands to your comparison and benchmark them in your account
Members see the sales every franchisor reports, for every brand
Free, no card. A new account accepts the Terms and the Privacy Policy. smbnest is a self-assessment tool and never takes a cut of your deal or a fee from a franchisor.
Before you sign: what to read in the disclosure document
Every franchisor must give you its Franchise Disclosure Document at least 14 days before you sign or pay. These are the parts that answer the questions above.
Items 5 to 7, the fees and the investment. The franchise fee, every other fee (technology, training, transfer, renewal), and the full opening budget, including working capital.
Item 19, what owners earn. Whether the brand states owner sales or earnings at all, and for which units. Put its figures in the boxes above in place of the typical ones.
Item 20, units opened, closed and sold. How many owners left in each of the last three years, and a list of current and former owners you can call.
Item 12, the territory. Whether you get a protected area, and what the brand can open or sell inside it.
Item 21, the franchisor’s own finances. Whether the company behind the brand is in good health.
smbnest is a self-assessment tool, not individualized advice. Fees are as each brand publishes them on its franchising page and in its disclosure document, reviewed in the month shown, and change; the figures in dollars are worked out at the sales you enter and are not a forecast. We never take a cut of your deal or a fee from a franchisor. Before you sign, speak with a franchise attorney and a qualified financial adviser, and call owners from the disclosure document.
Your guidesmbnest
The guide is an automated assistant. Answers come from this business’s model, its sources and your plan; they are general information, not legal, tax or financial advice. Talk to a person