Updated August 23, 2020.
Detailed Estimates of Kiddie Academy Franchise Costs Based on Item 7 (Estimated Initial Investment) of Kiddie Academy’s 2020 Franchise Disclosure Document
For a Leased Kiddie Academy Facility
1. Total Initial Fees: $135,000
- You must pay Kiddie Academy an Initial Fee of $135,000, which is payable in installments. You could pay a Reduced Initial Fee if you qualify for one of Kiddie Academy’s discount programs. The Reduced Initial Fee Programs, 2020 Initial Fee Credit, and Focused Development Credit (as described in Item 5), if applicable, are not reflected in the figure above.
2. Lease Deposit: $15,000 to $110,000
- This is Kiddie Academy’s estimate of the range of security deposit amounts that will be required if the premises for your Academy are leased. However, your deposit may be higher or lower depending upon your landlord’s requirements.
3. Tenant Contributions for Improvements and Construction Soft Costs: varies
- If you intend to lease your Academy premises, you may consider an agreement with your landlord for a “build-to-suit” program whereby the landlord pays for (and may perform) all or most of the build out of the Academy and those costs are included in the monthly rent and/or additional rent paid by you during the term of your lease.
- A build-to-suit agreement will increase the monthly payments you make to your landlord under your lease, but will significantly lower your initial, out-of-pocket costs and the amount of your debt service.
- This amount ranges from $0 to $3,980,000 and varies greatly depending upon the condition and size of your Academy, the amount of the tenant improvement costs paid by your landlord, whether the landlord pays for playground surfacing materials, and your own decisions regarding your Academy.
4. Professional Fees and Loan Fees: $10,000 to $55,000
- You may decide to obtain advice from professionals, such as an attorney, an accountant, an architect, a civil engineer, design professionals, a geotechnical engineer, a code requirement engineer inspector, and others, regarding the meaning of the terms of your agreements with Kiddie Academy, the terms of your lease and/or purchase agreement, and other issues with respect to the overall design and development of your Academy.
- In addition, based upon the size of the Academy you decide to develop and build and the financing or payment structure you use (if any), the size of your loan will vary. The size of your loan will determine the size of the loan fees you will be required to pay. Loan fees and professional fees will increase significantly as the size of your loan increases.
5. Kitchen Equipment and Supplies: $15,000 to $30,000
- You are required to acquire commercial grade kitchen equipment, appliances, and kitchen supplies (i.e. pans, smallware, and initial food inventory) for your Academy.
- You may purchase these items, or a leasing arrangement may be available through a vendor for some of them.
6. Supplies/Equipment for Inside of Academy, Playground, and Online Training Component: $74,000 to $260,000
- You must purchase classroom supplies and equipment that Kiddie Academy specifies (the “Specified Supplies and Equipment”). The Specified Supplies and Equipment will include, for example, window blinds, appliances, children’s tables and chairs, shelves, carpets, active play equipment, books, arts and crafts supplies, cribs and cots, changing tables and supplies, cleaning supplies, high chairs, manipulative toys, riding toys, balls, language development materials, music and movement materials, science and discovery materials, and teacher resource materials.
- You will also be required to pay for an online training program to a third-party vendor that will cost approximately $500.
7. Outdoor Fixed Playground Equipment: $0 to $103,000
- You must provide outdoor play equipment for your Academy. The costs may be included in your rent expenditures during the lease term, if paid for by your landlord. Accordingly, your initial out-of-pocket costs for such purchases may be zero.
8. Computer Hardware and Software and Classroom Technology: $25,000 to $56,000
- You must purchase (or lease) at least one desktop computer and at least two tablet computers for each three-year-old, four-year-old, five-year-old, and school-age classroom area of your Kiddie Academy Franchise in order to offer the computer instruction in Kiddie Academy’s Life Essentials Curriculum to the children enrolled in your Academy.
- In addition, you must purchase one tablet computer per classroom for parent communication through AcademyLink.
9. Office and Lobby Furniture, Office Equipment and Supplies, and Telephone System: $10,000 to $30,000
- You must purchase basic office and lobby furniture, equipment and supplies, and a telephone system. You also may purchase and install, at your option, a security system, the cost of which is not included in this estimate.
10. Indoor and Outdoor Signage: $9,500 to $45,000
- Kiddie Academy will provide you with specifications for your signs, which must be built to conform to Kiddie Academy’s requirements, as well as those of your lease and local jurisdiction.
11. Travel and Living Expenses While Training and Plan Review: $2,000 to $11,000
- You are responsible for the costs incurred by you and your Academy Director to attend Kiddie Academy’s mandatory training courses and, if required, for the meeting to review your Academy plans (the “Plan Review”).
- The estimated cost presented for Franchisee Training, Plan Review, and Director Training is for transportation, meals, and lodging for two people for nine days, as well as one person for one week for Director’s Training.
12. Transportation Vehicles and Equipment: $0 to $5,000
- You are responsible for the costs relating to the purchase or lease, and maintenance of all transportation vehicles and equipment utilized by you and your Academy for a before and after school program, should you choose to operate such a program at your Franchised Business.
13. Insurance and Utility Deposits: $2,500 to $10,000
- These amounts are for initial deposits that will be required for insurance policies, telephone service installation, utilities, and related items. These amounts are payable to third parties as incurred.
14. Business Licenses: $1,000 to $5,000
- Many states and localities, but not all, impose license or permit fees on local businesses, including child care license fees. These fees vary from jurisdiction to jurisdiction.
15. Start-Up Marketing and Advertising Expenses: $35,000
- You must spend at a minimum this amount on your pre-opening and post-opening marketing and advertising programs.
- This is for your pre-opening marketing campaign in your targeted market area, other pre-opening marketing items, and certain promotional items, including a Start-Up Marketing Kit.
- This is also for the marketing that will occur in support of special promotional events that occur during the initial period after your Academy opens.
- If you purchase an existing Academy, you must investment no less than $10,000 up to a maximum of $20,000 to support marketing activities related to the change of ownership.
16. Additional Funds/Working Capital – 3 Months After Opening: $11,000 to $145,000
- This is an estimated range of your startup expenses and working capital needed for the first three months of the operation of your Franchised Business. These expenses include payroll costs for operations, but do not include any allowance for a franchisee’s remuneration or the payment of any personal expenses of the franchisee.
17. Total: $345,000 to $1,035,000
- These figures are estimates of the complete initial investment required to open a Kiddie Academy franchise and additional operating funds you will need for the first three months of operations. It is possible you will significantly exceed these estimated costs in any or all of the areas listed above.
For a Purchased Kiddie Academy Facility
- The total estimated initial investment necessary to begin operation of a purchased Kiddie Academy Facility ranges from $3,254,500 to $5,605,000.