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

• Section I – Background information on the Code Ninjas franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Code Ninjas franchise, based on Item 7 of the company’s 2020 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Code Ninjas franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned Code Ninjas outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD

• Section V – Presentation and analysis of Code Ninjas’ financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• fiscal year 2019 average, median, high, and low annual gross sales for the 76 Code Ninjas franchisees that were open 12 months or more as of February 29, 2020

• fiscal year 2019 annual gross sales for the one affiliate-owned Code Ninjas center (located in Pearland, Texas, a suburb of the greater Houston, Texas area) that the affiliate operated for the entire 12-month period from March 2019 to February 2020

Section I – Background Information

21 Things You Need to Know About the Code Ninjas Franchise

Opens Milestone 100th Location

1.  Near the end of May 2019, Code Ninjas crossed yet another milestone – the opening in Spring, Texas of its 100th franchise location. With 300+ additional locations in the pipeline (at the time of the announcement), Code Ninjas was also ranked among Entrepreneur magazine’s Fastest Growing Franchises and Top New Franchises – a testament to the company’s success and growth since its launch just two years earlier.

2.  Although Code Ninjas has centers nationwide, the milestone 100th location in Spring, Texas falls in the backyard of the brand’s corporate headquarters and flagship location in Pearland, which opened in 2017. Local entrepreneurs and owners of the new location, Wendy and James Nguyen, gave visiting parents a tour of the center and hosted a complimentary game building session for their children.

3.  James Nguyen, owner of Code Ninjas in Spring, said, “It’s an honor to be part of the Code Ninjas family and to know that we have helped play a vital role in the brand’s growth. We are thrilled to have the opportunity to work alongside the Code Ninjas corporate team and our fellow franchise partners to live out the brand’s mission of teaching kids how to code in a fun way while learning valuable life skills.”

4.  Entrepreneur’s highly-competitive Fastest-Growing Franchises list recognizes the 150 companies with the greatest franchise unit growth in North America, based on their net franchise-unit growth in the United States and Canada from July 31, 2017 to July 31, 2018, as part of data submitted for Entrepreneur’s Franchise 500 ranking. As a result of its exceptional growth – opening 81 units over the course of one year – Code Ninjas was ranked No. 66, demonstrating the brand’s rising popularity with both franchisees and customers.

5.  In addition, Code Ninjas was ranked No. 60 in the publication’s Top New Franchises list. The ranking recognizes the top 100 new rising stars in franchising and is based on more than 150 data points in areas including costs and fees, size and growth, franchisee support, brand strength, and financial strength and stability.

6.  David Graham, founder and CEO of Code Ninjas, added, “We are honored to be recognized by Entrepreneur in two of its prestigious rankings and are humbled to be included among franchising’s finest brands. Reflecting on Code Ninjas’ tremendous growth over the last couple of years and seeing how far we’ve come starting from ground zero, for us to reach 100 open locations in such a short time makes me so proud to be part of a system so passionate and dedicated to changing the lives of kids in communities around the world.”

Launches New JR Program

7.  In mid-March 2020, Code Ninjas announced the launch of its new curriculum – Code Ninjas JR – to help younger kids further advance their technological skills. Code Ninjas JR., developed in partnership with codeSpark Academy, will combine the highly accessible and powerful coding platform with the hands-on activities, guidance, and live interaction offered at Code Ninjas.

8.  The new curriculum, spearheaded by Grant Smith, vice president of education for Code Ninjas, targets kids aged 5-9. Reading skills are not required for the new program, which allows younger children enrolled in classes as early as kindergarten and those with learning disabilities to have access to learn logic, problem solving, and teamwork skills early-on.

9.  Smith said, “Kids are already using technology at a young age – some can even navigate it better than their parents! With this in mind, we wanted to give these younger kids a chance to add to their already-impressive skillset by giving them a chance to explore computer programming. Our goal is to help build up a new generation of kids who can become technology creators vs. just consumers, ultimately giving them a leg up in driving technological innovation early-on.”

10.  Code Ninjas encourages families to incorporate STEM education into their routine throughout the school year. With a robust, nine-belt curriculum inspired by martial arts, Code Ninjas keeps kids excited and engaged, while parents see their children gain life-changing STEM skills. Parents across the country have witnessed firsthand how Code Ninjas has transformed their children in a fun, educational setting.

11.  According to David Graham, co-founder and CEO of Code Ninjas, “Code Ninjas continues to thrive at the forefront of the edutainment industry by giving kids the tools that they need to pave the way for a successful future. We are thrilled to add Code Ninjas JR to our curriculum and look forward to playing our part in making an impact on even more kids around the world.”

Unveils New Franchise Opportunity

12.  In mid-May 2020, Code Ninjas announced the launch of Code Ninjas Studio, a new franchise opportunity designed specifically for smaller markets. Code Ninjas Studio offers a more flexible business model, with lower startup costs and scaled-back requirements, backed by the world’s largest and fastest-growing coding franchise.

13.  With the introduction of the Studio model, forward-thinking entrepreneurs can now deliver Code Ninjas’ high-quality coding education to more communities nationwide. More families than ever can experience the life-changing opportunities that Code Ninjas offers through owning a franchise and building a community where children can have fun while gaining life-changing skills.

14.  Code Ninja Studio features reduced franchise fees and build-out requirements, coupled with lower overhead and staffing expenses, enabling prospective franchisees to get their business off the ground in a matter of weeks at a fraction of the cost. New franchisees also benefit from the brand’s unrivaled infrastructure, including development and support from in-house education, technology, operations, and marketing teams.

15.  Studio locations will have the flexibility to operate inside existing public-use spaces like local schools, colleges, community centers, and libraries. Through this model, franchisees will have complete access to the full offering of proprietary programs and curriculum, including Code Ninjas JR, CREATE, PRO, and Camps, with the same level of guidance and training for their instructors (Code Senseis) as they would through the traditional model.

16.  David Graham, co-founder and CEO of Code Ninjas, said, “Code Ninjas is committed to providing quality coding education to as many kids as possible. With Studios, we can broaden our reach and impact, as well as help current franchisees expand their businesses. We believe these new Studios are a win-win for both franchisees and smaller communities.”

17.  The first Code Ninjas Studios will be owned and operated by current franchisees who are looking to expand their business to reach more communities in different areas. Studio territories will not conflict with territories already being serviced by traditional Centers and will have their own claim to a protected territory. The new, flexible Studio model will only be available to new students who are not currently attending programs at an existing location.

Company History

18.  Code Ninjas was founded in 2016 by David Graham in Pearland, Texas. Graham was a computer programmer, who had started another business Coder Camps, which was a program that taught adults how to be successful software developers. Coder Camps was a success.

19.  When Graham became a father, he realized that there weren’t any quality coding programs for children. Graham also felt that coding was a valuable life skill as coders learn how to use logic, be resourceful, and solve problems, giving them a distinct advantage in everyday life. So Graham came up with the idea for Code Ninjas and built upon his previous success with Coder Camps.

20.  As Graham predicted, there was great demand for a program like Code Ninjas and the concept was an immediate success. Graham started franchising Code Ninjas in 2017 and the company had 25 centers open and over 225 more in development by the end of 2018. Today, there are Code Ninjas locations around the United States and Canada.

Entrepreneur’s Franchise 500

21.  Code Ninjas did not rank on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Code Ninjas franchise costs, based on Item 7 of the company’s 2020 FDD.

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

• Please click here for detailed information on Code Ninjas’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2017

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  2
• Net Change:  +2

2018

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  72
• Net Change:  +70

2019

• Outlets at the Start of the Year:  72
• Outlets at the End of the Year:  194
• Net Change:  +122

Company-Owned

2017

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2018

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2019

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  2
• Net Change:  +1

Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis

• Code Ninjas provides prospective franchisees with certain information regarding actual historical annual gross sales related to the operation of Code Ninjas Centers in the 12 months ending February 29, 2020. This gross sales data is based on the 76 Code Ninjas franchisees that were open 12 months or more as of February 29, 2020.

• Code Ninjas has also included information on the outlet that was owned by its affiliate for this entire 12-month period separately below.

• There are no material differences in the gross sales or operating expenses of franchise and company-owned outlets. The Code Ninjas Centers reported, including the company-owned outlet, offer substantially the same products and services as you will as a franchisee operating a Code Ninjas Center.

• Code Ninjas does not provide any financial performance information relating to the operation of a Code Ninjas Studio.

• Code Ninjas Centers currently offer 3 primary types of learning opportunities: (1) drop-in learning; (2) summer camps; and (3) after-school programs. Drop-in learning is the only currently required service offering. Drop-in students can pay on a month-to-month basis or on a paid in full basis, which generally entitles them to attend 2 one-hour drop-in classes per week.

• Figures below include all 3 types of learning opportunities; however, after-school programs and summer camps are seasonal and therefore can vary greatly based on the timing of the opening of the Franchised Location.

Annual Gross Sales