FDD Talk: The Kiddie Academy Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

In this FDD Talk 2016 post, you’ll learn the following:

• Section I – Background information on the Kiddie Academy franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Kiddie Academy franchise, based on Item 7 of the company’s 2016 FDD

• Section III – Presentation and analysis of Kiddie Academy’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:

• 2015 average revenue, labor expense, occupancy expense, miscellaneous expense, and gross profit for the 81 mature Kiddie Academy outlets (i.e. franchisee-owned academies that have been open for at least 24 months) that submitted the required expense information to Kiddie Academy

Section I – Background Information

Helping Children Learn for Nearly 40 Years

The first Kiddie Academy location was opened in 1981 by Pauline and George Miller in Baltimore County, Maryland. Two years later, the second location opened in the Baltimore County area. That same year, the Millers and Kiddie Academy’s staff moved into the company’s first corporate headquarters. For the rest of the decade, the Millers continued to open Kiddie Academy locations in Maryland.

In 1992, the Millers obtained permission to begin franchising and formed Essential Brands, Inc. The first franchised location opened in 1994.

Sometime in the late 90s, the Millers retired from daily operations and their son Michael took over as head of Kiddie Academy. Around this same time, the first Kiddie Academy outside of Maryland opened.

Throughout the rest of the 90s and the early 2000s, Kiddie Academy continued to grow all across the country. In 2007, Kiddie Academy received accreditation from The Commission on International and Trans-Regional Accreditation (CITA).

Today, there are over 150 Kiddie Academy locations in the U.S.

Plans to Accelerate Growth

In early 2016, Kiddie Academy announced that the company had plans to develop 30 new locations by the end of the year. The announcement came as the company continues to grow; Kiddie Academy experienced 20 percent growth in 2015.

The company plans to enter two new markets, Georgia and Tennessee. There are also plans to further expand into Texas and Kiddie Academy’s home-state of Maryland. According to Kiddie Academy, the recent growth is due to existing franchisees opening additional locations.

Also in 2016, Kiddie Academy opened a flagship location in Maryland that is being used as a franchisee training center.

Launched National Ad Campaign

Earlier this year, Kiddie Academy launched a new national ad campaign. The ad campaign features children dressed as their favorite historical icons and “depicts the power of imagination, exploration, and invention, as nurtured through Kiddie Academy’s program.”

The campaign is called Amazing Starts Here and the ads can be heard over the radio and seen on TV.

Named a Top Franchise for 2017

Kiddie Academy earned a Top 10 spot on Franchise Gator’s fourth annual Top 100 list. The company landed at spot No. 8. Kiddie Academy was also on the list in 2016 at spot No. 5. Franchise Gator’s rankings are based on a franchise system’s fiscal strength, stability, and development.

The franchise was also identified as a “Fastest Growing Franchise” by Franchise Gator last year.

A Regular on the Franchise 500 List

Kiddie Academy has earned a spot on Entrepreneur’s annual Franchise 500 list every year in the past decade. The company landed at spot No. 117 in 2017, which is the highest Kiddie Academy has placed. This is up over 100 spots from 2016’s spot of No. 258. Kiddie Academy earned its lowest rank in 2013 at No. 497.

Section II – Estimated Costs

• Please click here for detailed estimates of Kiddie Academy franchise costs, based on Item 7 of the company’s 2016 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis