Revised and updated December 19, 2020.
Childcare plays an essential part in the economy. In 2019, the US population included nearly twenty million children under the age of five. For their parents to go to work, these children need access to daytime childcare, and in many cases, older children also need after school care. Wider economic growth has been built on a foundation of good childcare.
Though much childcare is provided informally by friends and relatives, the past decade has seen a growing reliance on childcare centers, with franchises playing an increasingly important role. The number of home-based providers has been falling, in favor of the larger childcare facilities that franchises favor.
Expectations for what these facilities will provide have been changing too. Fifty years ago, they were often glorified babysitters. Now, parents expect daycare to encourage their children’s development and set them on a path for academic success. For those with an interest in children, it can be both rewarding and challenging work.
The industry had total revenues of $45 billion in 2018, built on decades of growth. However, this hasn’t always translated into big profits for business owners. High overheads and slender profit margins mean that, while childcare can provide a living, it tends to attract those who are passionate about the work, rather than those seeking the biggest earnings. The average childcare center director earns $48,000 per year.
COVID-19 had a powerful and immediate impact on childcare businesses. 25% of parents took their children out of childcare because of safety concerns, even without factoring in local closures. New regulations were brought in to reduce the spread of the disease within childcare facilities. As parents pulled their kids out and authorities set new, stringent regulations, owners incurred expenses for new equipment and cleaning while losing customers. 86% lost custom, with enrollment dropping on average by two-thirds, while 70% incurred substantial additional costs.
With almost half of working parents with children under six working from home, two-thirds changed their childcare arrangements. For some, this was about health and safety concerns, not wanting to risk their children becoming infected or spreading the disease. Others were left with no choice, as childcare facilities near them closed due to rising costs and falling business.
In some cases, existing contracts or the hope of a return to normality kept parents paying. 26% of working parents of under-sixes kept paying for childcare services they weren’t using. But with these arrangements costing an average of $370 per child per month, this wasn’t a cost that could be maintained indefinitely, and many cancelled.
This has led to a shift in patterns of childcare. Parents became more reliant on family or friends as providers, with 33% using this approach in September 2020, compared with 29% pre-COVID. That might not seem like a huge shift, but for an industry working on narrow financial margins, losing 4% of its potential customer base is significant.
This has led to a shrinking industry, in which a quarter of childcare workers lost their jobs. As of July 2020, 40% of childcare businesses predicted that they would have to close if they didn’t receive additional assistance.
Current conditions are bleak for childcare franchises, and the future is deeply uncertain. While the wider economy is reliant on childcare, and this should make it a safe business, the industry needs a wider recovery so that more people can afford paid childcare. In September 2020, 63% of parents expected that they would need to change their childcare arrangements in the next year, making it difficult for childcare franchises to plan for the future.
There is some tentative cause for hope. By September 2020, 61% of working parents of pre-school children had returned to work, and of the remaining 39%, half gave childcare as a reason they had not yet returned. This indicates a level of demand that is currently going unmet. One of the biggest barriers is financial, as economic uncertainty makes it harder for parents to pay childcare costs, while higher overheads leave even less room for providers to lower their fees.
Parents’ decisions over whether to return to work are increasingly reliant on whether they receive financial support for childcare from their employers. 40% of employers have responded by offering additional childcare accommodation, assistance, or benefits, and national or state governments may need to support the industry if they want to reboot a struggling economy.
In the fall of 2020, closures and reductions in capacity meant that childcare center usage was at less than half its pre-COVID levels. There’s clearly a need to increase this capacity, and that may create opportunities for childcare franchises. What’s much more unclear is whether those opportunities can be made profitable for franchisees.
The Top Childcare Franchises of 2021
1. The Goddard School
The Goddard School recently welcomed Dennis Maple to the company as he takes over the role of CEO from Joe Schumacher, who was in the position for ten years. Schumacher will remain involved in the company as the chairman of the board of directors.
The Goddard School provides a more educational approach to daycare. Preschool programming is available to children six weeks to six years old. Its proprietary F.L.EX. Learning Program builds the emotional, academic, social, creative, and physical skills of children through play-based learning that goes beyond the basics to include sign language, yoga, music, foreign languages, and more. Parents receive daily activity reports and regular conferences during the year to discuss progress.
Founded by Lois Goddard Haines in 1986 and franchising since 1988, the number of locations has continued to steadily climb from 371 in 2010 to the current total of 538 (up from the previous year’s total of 509), none of which are company-owned and all of which are located in the US.
2. Primrose Schools
Primrose Schools has joined a growing number of franchises entering what’s called the “whole-business securities” market. The company is able to borrow by issuing investment-grade bonds backed by various assets of the business. Primose is aiming for $275 million.
The company’s focus is on education utilizing its proprietary Balanced Learning curriculum. CEO Jo Kirchner has been with the company since 1990, but was sending her own kids to a location for years before that. Primrose provides year-round programming for children from six weeks to six years old that includes after-school enrichment and summer programs.
A primary focus for each school is social responsibility and community involvement. Each school is accredited by AdvancED as well as either the Southern Association of Colleges and Schools Council or the North Central Association along with its own internal Service Excellence Assurance (SEA) quality assurance program that reviews each school three times a year.
Founded by Paul and Marcy Erwin in Marietta, Georgia in 1982 and franchising since 1988, the number of locations has been on a steady upward trajectory from 213 in 2010 to the current total of 430 (up from the previous year’s total of 405), none of which are company-owned and all of which are located in the US.
3. Kiddie Academy
Kiddie Academy has been making waves recently with its campaign called Storytime LIVE! These free community events at participating Kiddie Academy locations allow children to not only have a great story read to them, but they also get to meet beloved PBS characters like Curious George and Pinkalicious.
Kiddie Academy was founded by George and Pauline Miller to provide education-based childcare. Its Life Essentials curriculum allows children to learn at their own pace by stimulating their curiosity and instinct to learn through age-appropriate activities designed to make every experience a learning opportunity. It is a standards-based learning curriculum but also includes a strong character education component as well as a focus on STEM (science, technology, engineering, and math) education.
Founded in 1982 and franchising since 1991, the number of locations has grown over the past 10 years from 114 in 2010 to the current total of 263 (up from the previous year’s total of 234), only one of which is company-owned and all of which are located in the US.
4. The Learning Experience Academy of Early Education
The Learning Experience Academy of Early Education combines childcare with early education programs to focus on the key educational and care principles covering a child’s cognitive, physical, and social development or, as the chain puts it, “learn, play, and grow.” Its proprietary L.E.A.P. Curriculum covers all the basics but also includes sign language, phonics, foreign languages, manners and etiquette, physical fitness, and a philanthropy program.
The company mascot, Bubbles the elephant, is loved by children and has inspired the related BubblesU.com that creates personalized books featuring your child as the star.
Founded by the Weissman family in Boca Raton, Florida in 1979 and franchising since 2003, the number of locations has risen in recent years from 107 in 2010 to the current total of 243 (up from the previous year’s total of 235), of which 26 are company-owned and all are located in the US.
5. College Nannies, Sitters, and Tutors
College Nannies, Sitters, and Tutors is different from other education-based childcare companies because it focuses on providing nanny sitting and tutoring services in the home rather than standalone centers. It helps match college students, graduates, and teachers with families who want in-home care and education for their children. The overall approach in CNST is one-on-one role modeling, whether a family just needs babysitting, more extensive nanny services, or tutoring to help their children achieve academic success.
Founded by Joseph Keeley in Minnesota in 2001 and franchising since 2005, the number of locations has grown over the past 10 years from 66 in 2010 to the current total of 193 (up from the previous year’s total of 191), none of which are company-owned and all of which are located in the US.
6. Kids ‘R’ Kids Learning Academies
Kids ‘R’ Kids Learning Academies is a company founded by husband-and-wife duo Pat and Janice Vinson that has its roots all the way back to the early 1960s. Pat’s mother, June, renovated their home into a day nursery for kids called Kiddie City, when group childcare was a very new idea. Janice worked at Kiddie City and she and Pat married in 1963, ran the location for more than two decades, and then decided to build their own facility from the ground up, which became the first KRK location.
The company motto is “Hug first, then teach,” which means showing children unconditional love is the first order of business, and only when a child feels loved can they be properly engaged in educational programming. The company’s whole-child approach ensures attention is paid to all areas of the child’s development, including character, intellect, creativity, and physical growth.
Founded in 1985 and franchising since 1988, the number of locations has bumped up in recent years to the current total of 176 (up from the previous year’s total of 173), none of which are company-owned and 11 of which are located outside the US.
7. Children’s Lighthouse Learning Centers
Children’s Lighthouse Learning Centers has established a partnership with St. Jude Children’s Research Hospital and will contribute to St. Jude’s with fundraising activities such as the national Trike-A-Thon program and the St. Jude Walk/Run in September, which is Childhood Cancer Awareness Month.
Children’s Lighthouse provides both academic programming accredited by AdvancED and a character values curriculum for children from infancy through 12 years of age. Focal character values in its Lighthouse CARES curriculum include cooperation, kindness, honesty, fairness, integrity, diversity, and gratitude.
Founded by Pat Brown and his brother G. Michael Brown in Fort Worth, Texas in 1996 and franchising since 1999, the number of locations has grown from 28 in 2010 to the current total of 55 (up from the previous year’s total of 49), none of which are company-owned and all of which are located in the US.
8. Lightbridge Academy
Lightbridge Academy got its start as the Rainbow Academy with a vision that went beyond mere daycare to include creating a “circle of care” to provide educational programming and parental support. The chain has kept up with technology by offering ParentView internet monitoring and an eCommunication app to provide parents with an ongoing connection to their children throughout the day.
Founded by Guy and Julia Falzarano in 1997 and franchising since 2011, the number of locations has grown from 10 in 2011 to the current total of 47 (up from the previous year’s total of 40), of which 14 are company-owned and all of which are located in the US.
9. Discovery Point
Discovery Point fosters a love of learning through child-centered activities promoting self-discovery, problem solving, and creative thinking. The company partners with Teaching Strategies to implement its nationally-recognized Creative Curriculum focused on helping children grow intellectually, physically, emotionally, and socially through a “whole-child” approach where the children feel loved and nurtured.
Founded in 1988 by Cliff and Diane Clark in Duluth, Georgia and franchising since 1990, the number of locations has declined over the past nine years from a high of 58 in 2010 to the current total of 47, of which three are company-owned and all are located in the US.
10. Genius Kids
Genius Kids calls itself an “accelerated learning” franchise with the motto, “Never 2 Little 2 Learn.” The inspiration came from the founder noticing how many otherwise smart adults showed a lack of confidence and interpersonal communication skills. Knowing this was something best addressed when people are kids, she developed her own accelerated learning programs that incorporated speech and public speaking into every aspect of learning. The idea is to nurture children in a way that results in confident thinking and creative expression without fear.
Founded by Rennu Dhillon in Fremont, California in 2001 and franchising since 2011, after a rapid rise from seven in 2011 to a high of 37 in 2018, the number of locations has since declined to the current total of 34, four of which are company-owned and all of which are located in the US.
11. Creative World School
Creative World School has a 3 E’s philosophy grounded in education, exploration, and enrichment. Each location puts it into practice with an Exploratorium – a unique learning environment where children are steeped in iSTEAM – Inquiry is Science, Technology, Engineering, Arts, and Math. The hands-on approach lets children develop critical thinking skills and explore real-world ideas, encouraging curiosity as they develop problem-solving skills and build a foundation for lifelong learning. An inquiry-based approach to learning is all about asking questions and then collaborating, investigating, and exploring to find answers.
The proprietary curriculum is accredited by AdvanceED. Franchisees enjoy a tiered royalties system where no royalties are paid until at least 75 children are enrolled. The franchise fee doesn’t even have to be paid until the company has helped find a site for a school. With this system, no franchisee has ever failed or defaulted on a loan, which is impressive.
Founded in 1970 and franchising since 2000, the number of locations currently stands at 33 (down from the previous year’s total of 35), of which seven are company-owned and all of which are located in the US.
KidsPark offers childcare by the hour and back-up full-day care when a family’s primary provider is closed or parents have an all-day commitment. The focus is on play through imagination, movement, art, and socialization for both preschoolers and school-aged children. Organized activities include arts and crafts, games, cooking, sensory exploration, music, stories, and hands-on science. Play components have been chosen that promote cooperation, socialization, listening skills, and motor development. Each location’s “no walls” floor plan lets children follow their interests while also allowing for continuous teacher and parent observation.
Founded in 1988 by Debbie Milner in San Jose, California and franchising since 2003, the number of locations has risen from three in 2010 to the current total of 25 (up from the previous year’s total of 22), of which seven are company-owned and all are located in the US.
13. KLA Schools
KLA Schools sees and values each child as strong, capable, resilient, and endlessly curious about the world around them. The concept is inspired by the Reggio Emilia approach to education developed by psychologist Loris Malaguzzi and parents in the villages around the Italian city of Reggio Emilia. It is best described as student-centered and constructivist, making use of self-directed experiential learning in relationship-rich environments. In this approach, learning isn’t an activity, it’s an experience in which what is taught is how to love learning.
Founded in 2007 by Candy and Roberto Ortega along with a group of investors in Miami, Florida and franchising since 2009, the number of locations has climbed from one in 2011 to the current total of 18, of which five are company-owned and all of which are located in the US.
14. Adventure Kids Playcare
Adventure Kids Playcare puts more emphasis on fun and adventure than many of the more academically-oriented childcare franchises. The staff or “play crew” at each location are all certified in CPR and First Aid. It provides drop-in childcare and entertainment for kids ages 6 weeks to 12 years old, with a clear emphasis on giving parents a break so they can do things they need and want to do. It calls its approach “guilt-free childcare when YOU need it!”
Kids are allowed to play, explore, and learn in a safe and secure environment. Much of it is free-play, but there are also organized games and craft activities. Each location includes a huge “playscape” with video game systems, computers, LEGO, play kitchens, costumes, and more. Weekend play opportunities are also offered.
Founded in 2004 and franchising since 2006, the number of locations currently stands at 16, of which four are company-owned and all are located in the US.
15. LeafSpring School
LeafSpring School used to be called Rainbow Station, but with “rainbow” already being so overused in the early childhood education market, the company chose a new name. LeafSpring is an allusion to the leaf springs that are an essential foundation in a locomotive train’s suspension system to support the engine.
The company was founded by Gail W. Johnson, a nurse who was interested in supporting parents in returning to work even when their children are mildly or chronically ill. Full-time, on-site nursing care remains a distinguishing feature of this chain. It is also very focused on development beyond academics and calls itself a “leadership preschool” that instills 21st century skills such as compassion, responsibility, and teamwork to help children “learn early, live well, and lead.”
Founded in 1988 and franchising since 1999, the number of locations had risen from nine in 2010 to a high of 24 in 2018, but has since declined to just 12, only one of which is company-owned and all of which are located in the US. It appears the chain lost or sold all their international locations.
An Important Note About Our Methodology
The franchises on this list were ranked according to the number of units in the franchise system. If you are a prospective franchisee searching for franchise opportunities that meet or exceed certain performance benchmarks for sales, profits, and return on investment, please check out this list of America’s Most Lucrative Franchises.