FDD Talk Daily (Children’s Franchises): Average Gross Sales of Franchised and Company-Owned KidsPark Centers

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 KidsPark’s Item 19 Financial Performance Representations (2012 FDD)

• KidsPark franchisees operate drop-in hourly childcare centers for children from 2 to 12 years of age.

• The estimated total investment necessary to begin operation of a KidsPark center franchise is $172,500 to $304,000, including the initial franchise fee of $19,500 that must be paid to the franchisor.

• The franchise fee for multiple KidsPark centers purchased at the same time is discounted.

Average Gross Sales for KidsPark Centers in 2011

• The figures below are average gross sales in 2011 for the 13 KidsPark centers in the United States that operated for the full 2011 calendar year. The 13 centers are divided into 5 subsets and presented below as follows:

• a) 2 Developing Centers all located in California which have been in business for 2 years or less,
• b) 4 Maturing Centers in California which have been in business for more than 2 years,
• c) 1 Developing Center located in Tennessee which has been in business for 2 years or less,
• d) 4 Maturing Centers in Arizona, Florida, Kansas, and Texas which have been in business for more than 2 years, and
• e) 2 Company-Owned Centers both located in California which have been in business for 17 years or more.

• The figures below are unaudited. Information that is related to franchised centers is based upon unverified reports to the company from 3rd party franchisees.

• The recession impacted KidsPark centers in 2009, 2010, and 2011, including gross sales at the centers, and so this should be taken into consideration in reviewing the figures below.

• Another important aspect that should be taken into account is the particularly severe impact of the recession in certain states, including California, due to a significant downturn in the real estate market and higher unemployment rates than occurred in the nation on average. The company believes that the recession’s increased adverse impact in California is reflected in the gross sales figures below for all of its California centers.

• The financial performance representation figures presented below do not reflect the costs of sales, operating expenses, or other costs or expenses that must be deducted from the gross sales figures to obtain the net income or profit.