FDD Talk Daily (Children’s Franchises): Average Revenue, Certain Expenses, and Gross Profit of Mature Kiddie Academy Businesses

This special FDD Talk series will highlight the financial performance representations of over 20 Children’s franchises, with a cross-analysis of the featured franchises to be published at the end of the series.

Highlights of Kiddie Academy’s Item 19 Financial Performance Representations (2012 FDD)

• The franchisee will operate a specially designed early childhood learning center and child care facility offering programs for children between 6 weeks and 12 years of age under the name Kiddie Academy.

• The total investment necessary to begin the operation of a Kiddie Academy Franchise is:  for a leased Kiddie Academy Franchised location, the initial investment ranges from $351,700 to $620,000; for a purchased Kiddie Academy Franchised location, including the real estate and the building in which your business will be located, the initial investment ranges from $1,851,700 to $3,070,000. This includes $120,000 in Initial Fees that must be paid to the franchisor or an affiliate.

Average Revenue, Certain Expenses, and Gross Profit of Mature Academies

• The information in this Item 19 represents an actual historical financial performance representation.

• Franchised Academies that have been open and operational for less than 18 months are called “ramping academies.” Franchised Academies that have been open and operational for more than 18 months are called “mature academies.”

• The company has excluded the ramping academies from the historic financial performance representation below because mature academy revenues and expenses more accurately reflect revenues and expenses achieved at existing academies in that they include only stabilized, full year revenues and expenses actually achieved over time.

• Of the mature academies in the system, 64 reported all of the required expense information for the calendar year ending December 31, 2010 pursuant to their contractual requirements.

• The company has not conducted an independent investigation or an audit to verify the figures presented; the information presented was provided to the company by its franchisees.