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 Primrose School’s Item 19 Financial Performance Representations (2012 FDD) – Part 1
- Primrose School Franchising Company dba Primrose Schools (“PSFC”) offers franchises for the establishment, development, and operation of facilities under the Primrose Schools mark, which provide learning and educational oriented activities, including child care services, to children from six weeks to twelve years old (each, a “Facility”).
- Should you choose to lease the Facility from a developer or independent third party unaffiliated with you, the total investment necessary to begin ownership of a Primrose franchise ranges from $561,575 to $2,784,175 (using the Developer Lease Program, Build-to-Suit Program, or Permanent Lease Program). This includes approximately $119,500 to $234,500 that must be paid to PSFC.
- Should you have extensive construction experience and the company permits you to develop the Facility without any assistance from them, the total investment necessary to begin ownership of a Primrose franchise ranges from $2,810,500 to $3,905,500 (using the Independent Development Program). This includes approximately $119,500 that must be paid to PSFC.
- PSFC may offer you the option to sign an “Option Addendum” that will give you the option to develop additional Facilities within a specific geographic area during a specified development period. When you sign the Option Addendum, you must pay PSFC an option fee of $20,000 for each additional Facility that can be developed under the Option Addendum, and upon exercising each option, you must pay PSFC its then-current initial franchise fee minus the portion of the option fee paid for the option on the Facility.
Summary of Annual Revenues of Company and Franchised Primrose Schools During the Period January 1, 2011 Through December 31, 2011
- The two tables directly below set forth the historical average annual revenues achieved by franchised Facilities that were open and operating throughout the Summary Period.
- For purposes of this Item 19, the Summary Period means the 24-month period from January 1, 2010 to December 31, 2011.
- The revenue data is based solely on data for Facilities that were open and in operation throughout the entire Summary Period. A total of 1 company-owned Facility and 206 franchised Facilities, including 13 Smaller Facilities and 193 Larger Facilities, were open and in operation throughout the Summary Period and are represented in the two tables directly below.
- Smaller Facilities have a capacity of between 126 and 144 children, and Larger Facilities have a capacity of between 145 and 296 children.
- The Facilities represented in this Item 19 are located in free-standing buildings in Alabama, Arizona, Colorado, Florida, Georgia, Indiana, Kansas, Minnesota, Nebraska, North Carolina, Ohio, Oklahoma, Tennessee, Texas, and Virginia.
- Revenues in this Item 19 are calculated based on gross receipts less any allowable credits or discounts, and the data is based on revenues reported to the company by franchisees. This data has not been audited.