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

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

• Section I – Background information on the Drama Kids franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Drama Kids 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 Drama Kids franchise, based on Items 5 and 6 of the company’s 2017 FDD

• Section IV – Presentation and analysis of Drama Kids’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:

• 2016 average, high, and low gross sales for the full calendar year for the top third, middle third, and bottom third of the 45 Drama Kids franchises that have been operating for over one year on a full-time basis (i.e. holding at least five classes per week during the school year months of September through May)

• 2016 average, high, and low gross sales for the full school year (September through May) for the top third, middle third, and bottom third of the 45 Drama Kids franchises that have been operating for over one year on a full-time basis

• 2016 average, high, and low student enrollments during the school year for the top third, middle third, and bottom third of the 45 Drama Kids franchises that have been operating for over one year on a full-time basis

• 2016 average, high, and low number of classes per week during the school year for the top third, middle third, and bottom third of the 45 Drama Kids franchises that have been operating for over one year on a full-time basis

Section I – Background Information

9 Things You Need to Know About the Drama Kids International Franchise

Named a Top Franchise for Women

1.  In early February, Drama Kids International announced that it had been named a top franchise by Franchise Business Review in their 2017 Top Franchises for Women report and one of their 50 best franchises overall. Drama Kids was one of 300 franchises that participated in Franchise Business Review’s research, which included over 6,400 female franchise owners. It was one of four children’s development/enrichment and tutoring franchises in the Children’s Services category to earn a spot on the list.

2.  The company’s franchisees were surveyed on 33 benchmark questions about their experience and satisfaction regarding critical areas of their franchise systems, including leadership, training and support, financial opportunity, core values, and work/life balance.

3.  Drama Kids International president Charlie Kerr said, “We are very honored and pleased that the most respected franchise market research firm in the U.S. has identified Drama Kids as one of the Top Franchise Businesses for Women, and has also ranked Drama Kids as one of the 50 best franchises overall based on franchisee satisfaction. We are very fortunate to have an amazing group of franchise owners, a high percentage of whom are women, and we work hard to provide excellent support, training, and resources, while also continually listening to our franchise owners to determine how we can improve the system.”

Offers Anti-Bullying Workshops

4.  One of the ways in which Drama Kids International helps children build their confidence is through its ACT UP! to Stop Bullying initiative, which was launched in the fall of 2015. Since then, Drama Kids International has been offering the workshops as a stand-alone program, an add-on option to its traditional drama programs, and as a week-long camp program during the summer.

5.  The workshops are designed for children in the third, fourth, and fifth grades. Through the program, students are asked to participate in drama activities and group discussions that teach them about the various forms of bullying and how they can properly respond in those situations if they ever arise.

6.  Specifically, the workshops are designed to help students:

• Understand the many different forms of bullying, from physical and verbal attacks to more subtle forms, like purposefully excluding someone from a group
• See the different roles they can play when bullying occurs, from silent participant to observer to preventer
• Reinforce that their negative feelings about bullying are very common and shared by their peers
• Learn how to model good behavior
• Role play to learn how to identify bullying and practice safe and effective interventions

Company History

7.  Drama Kids was founded in 1979 by Helen O’Grady in Perth, Australia. O’Grady was a teacher, drama expert, and actress who wanted to provide a developmental program for children through drama. Over the next decade, the company grew to 24 locations in the suburbs of Perth. In 1989, O’Grady started franchising the concept as The Helen O’Grady Children’s Drama Academy.

8.  In 2000, the franchise entered the U.S. market under the name Drama Kids International. Today, there are over 230 Drama Kids locations across 25 countries.

Entrepreneur’s Franchise 500

9.  Drama Kids International has appeared on Entrepreneur’s annual Franchise 500 list almost every year for the past 10 years, except in 2012 and 2016. The company’s highest rank was No. 278 in 2011, while its lowest rank was No. 498 in 2014.

Section II – Estimated Costs

• Please click here for detailed estimates of Drama Kids 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 Drama Kids’ 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

• On December 31, 2016, Drama Kids had 63 Franchises. Of those 63 Franchises, 45 have been operating their Franchises for over one year on a full-time basis (“Reporting Group”).

• The franchisor defines full-time basis as holding at least five classes per week during the school year months of September through May.

• The franchisor divided the Reporting Group into three separate subgroups:

• (a) franchisees in the top 1/3 of all Gross Sales of the Reporting Group (15 franchisees) (“Group One”);
• (b) franchisees in the middle 1/3 of all Gross Sales of the Reporting Group (15 franchisees) (“Group Two”);
• (c) franchisees in the bottom 1/3 of all Gross Sales of the Reporting Group (15 franchisees) (“Group Three”).

• The information in all four tables below is based on Gross Sales reports submitted to the franchisor by the Reporting Group.

Gross Sales for Full Calendar Year

Group One