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

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

• Section I – Background information on the Lil’ Kickers franchise opportunity, including relevant news updates

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

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

• 2016 actual gross sales and enrollment figures for all Lil’ Kickers franchisees running “traditional” Lil’ Kickers Programs and all Arena Sports’ licensees, provided that the location was in business and operating for all or most of the 12-month period ending December 31, 2016

Section I – Background Information

8 Things You Need to Know About the Lil’ Kickers Franchise

New Locations

1.  The Lil’ Kickers franchise continues to grow across the United States. Two new locations were opened in the fall of 2017. A new locally-owned indoor sports complex in the Miami Township of Cincinnati, Ohio is now home to a Lil’ Kickers franchise. In September, The Mill Works in Westford, Massachusetts, launched its Lil’ Kickers program. Sandra Habe, the owner of The Mill Works, said that she was excited to see what Lil’ Kickers becomes and that she believes she has the staff and facility to maximize the program’s potential.

Offers Classes for Children From 18 Months to 12 Years Old

2.  Lil’ Kickers offers different classes for a wide range of age groups. The franchise has eight different age group programs that “help kids tackle key developmental milestones.” Children are divided into the following categories:

• “Bunnies” (18 to 24 months). These classes introduce toddlers to soccer and are geared toward their unique way of learning. The focus for this age group is on balance and coordination. Classes are 50 minutes long and require parent participation.

• “Thumpers” (2 to 3 years old). Thumper classes are 50 minutes long and parents are required to participate. The children and parents play organized games that help develop children’s listening skills, balance, cooperation, sharing, ball skills, and foot-eye coordination.

• “Cottontails” (2.5 to 3.5 years old). This is the last age group that requires parent participation and is for kids who are ready for activities that are more challenging than the Thumpers classes. These classes are designed to build fundamental skills such as balance, coordination, and ball kicking in addition to helping build a sense of independence.

• “Hoppers” (beginner classes for children 3 to 4 years old). Children in the Hoppers category focus on improving balance, coordination, and learning fundamental soccer skills. This is the first class category where children participate independently.

• “Jackrabbits” (intermediate classes for children 3 to 4 years old). These classes are for advanced toddlers who are ready to transition into non-competitive team play. Jackrabbits learn basic soccer skills, such as dribbling, passing, trapping, and scoring, and are introduced to more one-ball-oriented games and scrimmaging.

• “Big Feet” (beginner classes for children 5 to 6 years old). The Big Feet classes are for school-aged children that have never played soccer before. These classes concentrate on basic soccer skills (dribbling, passing, trapping, scoring) and building confidence on the field.

• “Micro Classes” (intermediate classes for children 4/5, 6/7, and 8/9). These classes focus on continued development and offer non-competitive games. They teach proper soccer techniques and as kids progress, the skills get more advanced.

• “Skills Institute” (advanced classes for children 5/6, 7/8, and 9 to 12). In the Skills Institute classes, children improve their technical and tactical soccer skills while focusing on key developmental milestones.

Offers Camps and Parties

3.  In addition to its regular classes, Lil’ Kickers also offers camps and soccer parties. The camps are half-day sessions for boys and girls 3 to 5 years old. Camp sessions include soccer activities taught by Lil’ Kickers instructors, a short snack break (with snacks provided by Lil’ Kickers), as well as an inflatable playground “Fun Zone” at participating locations. Parents can register for a full week or half-day sessions, which are offered from either 9:00 a.m. to 12:00 p.m. or 1:00 p.m. to 4:00 p.m.

4.  Lil’ Kickers parties are available for children 2 to 9 years old. The party packages include 50 minutes of field time, a party room, and a host to handle the event.

Company History

5.  Lil’ Kickers was founded in 1999 by Arena Sports, a family-run sports business based in the Seattle, Washington area. Arena Sports wanted to develop a children’s soccer program to help fill its indoor soccer facility’s off-peak hours as well as make a difference in the lives of local kids.

6.  Lil’ Kickers’ curriculum was created using renowned child development theories, child development professionals, experienced coaches, and thousands of hours working with children. The company began offering the Lil’ Kickers program at its three facilities and eventually expanded to other locations in the Seattle area.

7.  Today, there are over 100 Lil’ Kickers programs in 27 states and Canada. According to the company’s website, a Lil’ Kickers Soccer League (LKSL) will be coming soon.

Entrepreneur’s Franchise 500

8.  Lil’ Kickers has not yet ranked on Entrepreneur’s annual Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Lil’ Kickers 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 Lil’ Kickers’ 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 table below presents unaudited information about the actual gross sales and enrollment figures for all Lil’ Kickers franchisees running “traditional” Lil’ Kickers Programs and all Arena Sports’ licensees, provided that the location was in business and operating for all or most of the 12-month period ending December 31, 2016 (the “Reporting Outlets”).

• The table excludes any Micro Lil’ Kickers Programs because these are a new offering from the franchisor and it does not have enough historical data upon which to base any representation. The table also excludes franchisees and licensees that opened or closed during the 2016 calendar year, as well as all corporate locations.

• The Arena Sports licensees operate businesses very similar to the type being franchised, though they are not permitted to use any trademark of the company or of Arena Sports. Incorporating the information from these licensees provides a much larger set of data than franchisees alone, thereby allowing a more accurate representation of historical performance.

• As of December 31, 2016, there were 69 traditional franchisees in the Lil’ Kickers system and 3 licensees in the Arena Sports system. The Reporting Outlets consist of 69 traditional franchisees (68 who were franchisees for all of 2016, and 1 licensee that converted to a traditional franchise during 2016), and all 3 licensees.

• Gross sales means the aggregate of all revenue from the sale of services from all sources in connection with the Franchised Business, including, without limitation, all sales of classes, camps, parties, facility memberships, field trips, local program sponsorships, and proceeds from any business interruption insurance, but excluding:

• (a) all refunds made in good faith,
• (b) any sales and equivalent taxes that are collected by an outlet for or on behalf of any governmental taxing authority and paid thereto, and
• (c) any rebate received by an outlet from a manufacturer or supplier.

• Membership sales refer to individuals who paid annual membership or registration fees charged by a facility as a direct result of signing up for a Lil’ Kickers program.

• Enrollment figures represent individuals who registered for one quarter of classes. An individual is counted each time he or she enrolls; thus, the same person may be counted 4 times in one year’s results if they participated for the entire year.

• Enrollment occurs on a rolling basis, so the enrollment figures may also include partial seasons, for which class fees are typically pro-rated.

• Outlets use different numbers of fields in connection with the Franchised Business. Of the 72 Reporting Outlets, 4 outlets (or 6%) use three or more fields, 23 outlets (or 32%) use two fields, and 45 outlets (or 63%) use one field.

• Some outlets also have different sized fields, which accommodate different numbers of class participants, and some that have multiple fields do not use all fields as part of the Franchised Business.

• The breakdown by number of fields in the table below corresponds to the number of fields at each facility, but does not take the size or actual use of those fields into account.

• Subject to the company’s standards, outlets can run classes at local community centers, fitness clubs, gymnasiums, or, in the summer months, local parks, within their Exclusive Area. Of the 72 Reporting Outlets, 12 (or 16%) run these types of off-site programs. The gross sales and enrollment figures in the table below include activities at off-site locations, if any. Your area may not be suitable for off-site programs.

2016 Gross Sales