In this FDD Talk 2017 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 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Kiddie Academy franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Kiddie Academy’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average revenue, labor expense, occupancy expense, miscellaneous expense, and gross profit for the 102 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
- 2016 average revenue, labor expense, occupancy expense, miscellaneous expense, and gross profit for the top quarter and bottom quarter (by gross profit) of the 102 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
9 Things You Need to Know About the Kiddie Academy Franchise
Raised Money for Houston-Area Kiddie Academy Families
1. In late August, following the destruction caused by Hurricane Harvey in the Houston, Texas area, Kiddie Academy announced that it was raising money for Kiddie Academy families affected by the storm. Kiddie Academy’s corporate office made an initial donation of $25,000 and said that it would match all additional donations of up to $25,000 made by its national community of franchisees and families.
2. A week after the announcement, Kiddie Academy had already raised $35,000 of its $75,000 goal. The company said that all funds raised were going directly to those who were in urgent need. The donation drive ended on September 15, with Kiddie Academy raising more than $75,000. The final donation of $5,000 came from Kiddie Academy of Cupertino who raised money from its families, with Kiddie Academy matching those funds.
Grows Corporate Team With a Total of 16 New Hires and Promotions
3. In mid-June, Kiddie Academy announced nine new hires and seven promotions to its corporate team, including two new appointments to its executive leadership team. The expansion of its corporate team is a result of the success Kiddie Academy experienced in 2016, which was its most successful growth year to date.
4. Kiddie Academy President Greg Helwig said, “We’re proud to be growing our corporate team with skilled and passionate employees as we prepare to ramp up for the company’s next stage of growth. With 35 new academies slated to open this year, we look forward to tapping into our new team members’ combined expertise to build upon the momentum, as well as continue driving strategic growth and long-term success for the company.”
Named Fastest-Growing Childhood Learning Franchise of 2017
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5. Toward the end of October, Kiddie Academy announced that it had been named the fastest-growing childhood learning franchise in 2017 by the Franchise Times Top 200+, an annual ranking of the 500 largest franchise systems in the United States by global system-wide sales, based on the previous year’s performance. During 2016, the childcare industry’s sales were up 9.3 percent category-wide, with Kiddie Academy experiencing a 22.2 percent growth in the same period.
6. Greg Helwig, President of Kiddie Academy, said, “With thousands of childcare options available nationwide, we are honored to be acknowledged as the leading childhood learning franchise in terms of system-wide growth by Franchise Times Top 200+ this year. We look forward to expanding on this growth through the remainder of the year, with 240 locations expected to be open and operating by the end of 2018.”
7. Kiddie Academy was founded in 1981 by George and Pauline Miller in Baltimore County, Maryland. As a mother and educator, Pauline Miller wanted to provide better childcare options and felt that she would be able to do that through the curriculum she developed for the first Kiddie Academy.
8. The first franchised location opened in 1992. The franchise continued to grow over the next decade and in 2000, Kiddie Academy launched its summer program (now called CampVentures). In 2016, the company opened its new flagship location in Hartford County, Maryland to serve families and train franchisees. Today, there are over 180 Kiddie Academy locations across 24 states.
Entrepreneur’s Franchise 500
9. Kiddie Academy has ranked on Entrepreneur’s annual Franchise 500 list every year for the past 10 years. The company’s highest rank was No. 114 in 2017, while its lowest rank was No. 497 in 2013.
Section II – Estimated Costs
- Please click here for detailed estimates of Kiddie Academy 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 Kiddie Academy’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 information below represents an actual historic financial performance representation.
- The information was obtained from the franchised system’s existing mature outlets (franchisee-owned that have been open for at least 24 months) and was gathered from the financial information reported to Kiddie Academy during the 2016 calendar year by its mature outlets (as of December 31, 2016) under their reporting requirements as described below.
- As of December 31, 2016, there were 170 franchised locations, of which 48 locations (which have been open and operational for less than 24 months and which Kiddie Academy calls “ramping academies”), or 28% of the total, have been excluded from the historic financial performance representation below.
- Revenue and expense information for the ramping academies is excluded because mature academy revenues and expenses more accurately reflect revenues and expenses achieved at existing academies in that they include only stabilized, full year revenues and expenses actually achieved over time.
- Of the 122 mature academies, 16% of the total did not report the required expense information for the calendar year ending December 31, 2016. Accordingly, operating information is presented for the 102 fully reporting mature academies in the tables below.
- Financial performance information about Kiddie Academy’s mature outlets includes Gross Revenue, payroll, occupancy, and miscellaneous expenses.
- All units offer substantially the same services and products to the public. However, the actual sales and expenses of any franchised unit may vary substantially.
- The results presented in the tables below represent the Gross Profit, which equals the Gross Revenue minus the listed operating expenses.
- The time periods expressed in the chart below are not meant to be an indication as to when or if a unit will reach maturity. Each unit’s growth rate will vary by location, competitive environment, the region and market area in which the unit is located, labor costs, programs, and the individual franchisee’s marketing efforts and management skills.
- Accordingly, the information presented should only be used as a reference guide in conducting an independent analysis of the proposed business.
For Calendar Year Ended December 31, 2016
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