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FDD Talk 2017: What You Need to Know About the Goddard School Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

by Franchise Chatter on October 12, 2017

in Child-Related Franchises, Childcare Franchise, Education Franchise, FDD Talk 2017: Children's Franchises, Franchise Earnings



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Goddard School Exterior Photo by sqwynch

In this FDD Talk 2017 post, you’ll learn the following:

  • Section I – Background information on the Goddard School franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Goddard School franchise, based on Item 7 of the company’s 2017 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Goddard School franchise, based on Items 5 and 6 of the company’s 2017 FDD
  • Section IV – Presentation and analysis of the Goddard School’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
  • 2016 average gross sales, payroll, occupancy costs, miscellaneous expenses, total expenses, and EBITDA for the 423 Goddard Schools that had been open and operating for over 18 months as of December 31, 2016
  • 2016 average gross sales, payroll, occupancy costs, miscellaneous expenses, total expenses, and EBITDA for the 423 Goddard Schools that had been open and operating for over 18 months as of December 31, 2016, grouped by occupancy level (less than 70%, 70% to 80%, 80% to 90%, 90% to 100%, and greater than 100%)
  • average monthly EBITDA and average EBITDA for the first full year of operations for all 23 Goddard Schools that had their first full month of operation in 2015

Section I – Background Information

13 Things You Need to Know About The Goddard School Franchise

Hires New Director of Real Estate



1.  In early February, The Goddard School hired seasoned real estate professional Amy Williams as the system’s new Director of Real Estate. Williams comes to the company with an extensive background in real estate management with more than 15 years of experience in a variety of industries, including franchising, outdoor advertising, commercial real estate, and retail. Prior to joining The Goddard School, Williams was the real estate manager at Outfront Media, an outdoor media company formerly known as CBS Outdoor.

2.  In her new role as Director of Real Estate for The Goddard School, Williams will be tasked with establishing and executing a long-term vision and strategy for growth, managing development for franchise trade areas in the GSI market plan, and performing in-depth industry, market, and competitor research.

3.  Jim DiRugeris, VP of Franchise Development for GSI, said that Williams’ “proven history of developing strategic real estate plans supports our philosophy of reasonable and responsible growth.”

Nearing 500th Location

4.  At the start of 2017, The Goddard School stated that 2016 marked another successful year for the preschool franchise as it had opened 23 new schools around the country. The company also said that it plans to open 27 new locations over the course of 2017 and that it was on track toward achieving its goal of opening 150 new schools by 2020.

5.  The Goddard School currently has over 460 schools open around the country and will hit its 500th location milestone sometime in 2018. The brand said that it awarded more franchise license agreements to existing franchisees in 2016 than it did in 2015 and 2014 combined.



6.  In the press release, The Goddard School said that throughout 2017 it will be opening new schools in new markets across the country, including its first school in Arkansas. It will also be opening more schools in major metro areas that will accommodate Millennial parents living and working in their respective state’s city centers.

Celebrates Seventh Annual Root for Earth Campaign

7.  From April 17 to April 21, The Goddard School held its seventh annual Root for Earth campaign, which engages preschoolers in a variety of eco-friendly and hands-on projects. All of the schools in the franchise system participated in the event and showed the kids how to build robots from recycled materials, plant gardens, and offered other activities inspired by STEAM (science, technology, engineering, art, and math).

8.  Each school also participated in an Upcycling Challenge that asked the children to turn discarded materials into new creations. The children’s work was posted to The Goddard School’s Facebook page and members of the public were able to vote on their favorite submission, with the winner of the challenge announced on May 15.

9.  Additionally, on April 21, the day before Earth Day, all schools joined in the Lights Out! Initiative by turning off all non-essential lighting for an hour beginning at 10 a.m. local time. According to the company, the Lights Out! Initiative saved more than 3.4 million watts of energy.

Company History



10.  The Goddard School (originally called Goddard Early Learning Centers) was founded in 1983 by Lois Goddard Haines in Malvern, Pennsylvania. The school offers year-round programs for children aged six weeks to six years. In addition to the daily curriculum, it offers after school enrichment programs in subjects such as art and music.

11.  In 1988, Haines sold the Goddard School to Joseph Scadone and later that year, Anthony A. Martino, the founder of AAMCO Transmissions and MAACO Auto Painting and Bodyworks franchises, established Carousel Systems, Inc. in order to begin franchising the Goddard School.

12.  The company changed its name to The Goddard School in 1993 and by the end of the 1990s, the 100th Goddard School opened in the U.S. Today, there are over 460 Goddard Schools around the U.S.

Entrepreneur’s Franchise 500

13.  The Goddard School has ranked on Entrepreneur’s annual Franchise 500 list every year in the past decade. The company’s highest rank was No. 87 in 2011, while its lowest rank was No. 132 in 2008.

Section II – Estimated Costs

  • Please click here for detailed estimates of the Goddard School’s franchise costs, based on Item 7 of the company’s 2017 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Please click here for detailed information on the Goddard School’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis

  • The following are Statements of Gross Revenue and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for The Goddard Schools.
  • The first report is a Statement of Gross Revenue and EBITDA for the Schools in operation over 18 months for the year ended December 31, 2016 (“Mature Schools”).
  • The second report is a Statement of Average Gross Revenue and EBITDA for Mature Schools by Occupancy Group for the year ended December 31, 2016.
  • The third report is a Statement of Average EBITDA for the first 12 months of operation for Schools opened in 2015 and following them for their first 12 full months of operations in 2015 and/or 2016, depending on what month the School opened.

Part 1 – 2016 Average Gross Revenue, Payroll, Occupancy, and Miscellaneous Operating Expenses for Mature The Goddard School Businesses Operating as of December 31, 2016

  • The following is a report identifying the actual gross revenue, payroll, occupancy (representing rent plus property tax expense), and miscellaneous operating expenses prepared on a cash basis for all mature The Goddard School businesses (open over 18 months) operating as of December 31, 2016.
  • The net result of these items is “EBITDA” which is defined as gross revenue less all expenses directly related to operating the School excluding interest, taxes, depreciation, and amortization.
  • The items included in the expense category identified as miscellaneous items include bank charges, office supplies, telephone, transportation, payroll taxes, employee costs, advertising, royalties, repairs and maintenance, school supplies, snacks, technology, marketing, and professional fees.
  • The expenses reported may also include miscellaneous items that are subject to the discretionary spending of the individual franchisee.
  • The report has not been audited.
  • As of December 31, 2016, there were 461 The Goddard School businesses in operation, all of which 461 schools were owned by franchisees. Of these 461 Schools, 423 Schools had been open and operating for over 18 months as of December 31, 2016 and considered mature schools.

2016 Average – 423 Mature Franchise Schools



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