FDD Talk Daily (Children’s Franchises): Average Gross Sales, Operating Expenses, and Operating Profits of The Learning Experience 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 The Learning Experience’s Item 19 Financial Performance Representations (2012 FDD)

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  The franchisee will operate a childcare center business with the systems, trademarks, procedures, and curriculum (“Centers”) that are licensed by The Learning Experience Systems LLC, under a franchise agreement with the company.

• The total investment necessary to begin operation of a Center is between $495,299 and $3,585,549 per Center, depending on whether you purchase an existing Center, develop your own Center, or retain the franchisor to develop your Center. This includes payments that must be paid to the franchisor or affiliate that range from $525,000 to $2,625,000 if you purchase an existing Center, $162,399 to $212,399 if you develop your own Center, and $267,399 to $384,899 if the company develops the Center for you.

• The company also grants development rights to developers which enable them within a designated development area to (a) open, themselves or through affiliates or unaffiliated third parties, no fewer than 30 childcare Centers; (b) to promote the sale of franchises on the company’s behalf; and (c) service franchisees. The total investment necessary to begin operation as a Zone Developer will range from $641,500 to $1,600,000. This includes payments that range from $400,000 to $1,500,000 that must be paid to the franchisor or affiliate.

Gross Sales of The Learning Experience Centers

• As of March 31, 2012, there were 96 open and operating Centers located in the United States, 66 of which were open and operating for more than 24 months. The following analysis sets forth the annual gross sales results of all 66 Centers during the Reporting Period, broken down into 2 subsets:

• those that were open and operating for more than 48 months (“Mature Centers”), which is 26 units, and
• those that were open and operating for 25-48 months (“Intermediate Centers”), which is 40 units.

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