FDD Talk 2020: The Learning Experience Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

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

• Section I – Background information on The Learning Experience franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for The Learning Experience franchise, based on Item 7 of the company’s 2020 FDD

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

• Section IV – Number of franchised and company-owned The Learning Experience 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 The Learning Experience’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• 2019 average, median, highest, and lowest gross sales for the 121 franchised and 16 company-owned (separately stated) Learning Experience centers that were open for more than 48 months (“Mature Centers”)

• 2019 average, median, highest, and lowest gross sales for the 34 franchised and 3 company-owned (separately stated) Learning Experience centers that were open 24-47 months (“Intermediate Centers”)

• 2019 average revenue, imputed royalties, gross profit, salaries and benefits, school supplies, advertising, utilities and repairs, admin expenses, miscellaneous expense, total expenses, and EBITDAR (earnings before interest, taxes, depreciation, amortization, and rent) for the 17 company-owned Mature Centers that corporate owned the entire year in 2019

• 2019 average revenue, imputed royalties, gross profit, salaries and benefits, school supplies, advertising, utilities and repairs, admin expenses, miscellaneous expense, total expenses, and EBITDAR for the 1 company-owned Mature Center that was purchased by corporate from franchisees in 2019

Section I – Background Information

23 Things You Need to Know About The Learning Experience Franchise

Franchisee Wins National Chairman’s Award of Excellence

1.  In late July 2020, The Learning Experience announced that its Jacksonville-Southside center was the recipient of the brand’s “Chairman’s Award of Excellence.” Each year, this recognition is bestowed upon the highest performing center and is the highest honor one of 300 centers nationwide can receive.

2.  Richard Weissman, chairman and CEO of The Learning Experience, said, “Our Jacksonville-Southside center is emblematic of our company’s proven academic franchise system, and we are pleased to honor the center and its team with our annual Chairman’s Award of Excellence. This center exemplifies The Learning Experience brand, mission and core values in all they do: demonstrating an innovative mindset, positively inspiring and collaborating with other centers, and contributing to their local community.”

3.  A member of The Learning Experience family since 2008, Dr. Grace Huxtable-Mount is the owner of five branches of The Learning Experience Academy of Early Education. Her career in education spans 20 years, including teaching children as well as leading, training, and developing other educators, while shaping positive culture in both public and private educational organizations.

4.  Dr. Grace Huxtable-Mount, owner of The Learning Experience in Jacksonville, said, “We are honored to receive such an esteemed recognition from The Learning Experience. Our entire team is dedicated to setting a standard of excellence in our performance as a business, brand and building block of early childhood education.”

Co-Founder and CEO Appointed Chairman of Make-A-Wish Southern Florida

5.  In early March 2020, Richard Weissman, co-founder, chairman, and CEO of The Learning Experience, was selected to lead the board of directors for Make-A-Wish Southern Florida. Weissman will work with the board and Make-A-Wish team to fulfill the nonprofit’s mission of granting life-changing wishes to critically-ill children. His new role as board chair was effective January 2020 and will initially run through the organization’s 2020-2021 fiscal year.

6.  Weissman, a Boca Raton resident, is a longtime board member of Make-A-Wish Southern Florida. He has led many fundraising events both personally and through The Learning Experience, which have collectively raised more than $2 million for Make-A-Wish. Additionally, he has been instrumental in the creation of The Learning Experience’s first-of-its-kind proprietary preschool curriculum in partnership with Make-A-Wish which focuses on teaching philanthropy to children 3 to 5 years of age.

7.  Weissman said, “It is both humbling and a great honor to be named Chairman of the Make-A-Wish Southern Florida Board of Directors. I look forward to helping lead this purpose driven group in furthering the goal of granting wishes to create experiences of a lifetime for children and their families as well as delivering an iconic ‘Wish House’ in Florida.”

8.  Founded in 1983, Make-A-Wish Southern Florida will soon grant its 13,000th wish. The volunteer board of directors is comprised of more than 30 business leaders, medical professionals, and philanthropists. It concentrates on fundraising, governance, and strategic leadership of one of the region’s most impactful charitable organizations, which grants wishes in 22 counties in the state.

9.  According to Norman Wedderburn, president and CEO of Make-A-Wish Southern Florida, “Richard Weissman and his family have been integral during some of our chapter’s most transformational and impactful years. His unique servant leadership qualities and ability to mobilize and inspire ideally fit the mold for Chairman as we continue to build and grow.”

10.  Weissman co-founded The Learning Experience with his parents Michael and Linda in 2002. The early education academy and franchise has become one of the country’s fastest-growing preschool companies with over 400 locations open or under development in the U.S. and additional openings slated for 2020 in Europe.

11.  Its philanthropy curriculum is dedicated to continuously teaching the youngest of learners the value and application of kindness and generosity in class, at home, and in their communities. The curriculum is a direct reflection of Weissman’s charitable values and an essential component of The Learning Experience’s company culture.

12.  Make-A-Wish Southern Florida is currently building a Wish House in Miami to house its operations and host wish families. Currently headquartered in Davie, the nonprofit has regional offices in Bonita Springs, Sarasota, Tampa, and the U.S. Virgin Islands.

13.  The critically-ill children Make-A-Wish serves most often ‘wish to be’ (something), ‘wish to meet’ (someone), ‘wish to go’ (somewhere), ‘wish to have’ (something), or ‘wish to give’ (to a cause). The organization makes this happen for the child and his/her entire family at no cost or obligation.

New Location

14.  In early March 2020, The Learning Experience opened its newest Academy of Early Education center in Colorado Springs, Colorado. The independent franchise location in Colorado Springs is owned by local husband and wife Rashid and Shazia Khan. The center in Colorado Springs marks the franchise’s first location in the Colorado Springs metropolitan area.

15.  The first-time franchise owners will employ over 30 certified preschool teachers and staff to serve upwards of 180 children in the community. The center provides childcare, enrichment programs, and early childhood education for children from six weeks to six years of age.

16.  The Learning Experience’s all-inclusive programs and well-rounded curriculum include phonics, mathematics, science, physical fitness, music, foreign languages, and a philanthropy program that teaches children the value of kindness and helping others in the classroom, at home, and in their communities.

17.  Franchisee Shazia Khan said, “The Learning Experience provides the perfect balance of owning your own small business, along with the support of a nationally-recognized franchise brand with a proven track record of success. My husband and I are thrilled to provide exceptional childcare and a well-rounded curriculum to help children learn, thrive and make a positive difference in our community.”

18.  The Learning Experience’s proprietary Learning Experience Academic Program (L.E.A.P.) curriculum and enrichment programs were developed through more than 30 years of experience in early childhood education. Its early literacy programs have 9 out of 10 children reading before Kindergarten, and the unique philanthropy curriculum was created in partnership with Make-A-Wish.

Company History

19.  The Learning Experience was founded in 1980 by Michael Weissman and Richard Weissman in Florida. The company combines child care and early childhood pre-kindergarten education for children between the ages of six weeks and six years. The Learning Experience’s curriculum covers a wide range of topics, including yoga, foreign languages, philanthropy, sign language, basic math, English language skills, and science.

20.  Over the next few years, the Weissmans built up The Learning Experience brand and in 1987, the family acquired Tutor Time, a childcare company with over 200 centers in 25 states and four countries. In the late 1990s, the Weissmans retired from running Tutor Time and The Learning Experience brand. However, a few years later, in 2002, the Weissmans re-entered the childcare industry and revived The Learning Experience.

21.  The first new location was opened in Boca Raton, Florida and the Weissmans started franchising The Learning Experience in 2003. The Weissmans continued to grow The Learning Experience over the next decade and in 2014, the Weissmans sold a majority interest of the company to Norwest Venture Partners.

22.  A few years later, in 2018, The Learning Experience was acquire by Golden Gate Capital, a leading private equity investment firm. Despite the acquisition, the Weissmans are still involved with The Learning Experience and Richard Weissman serves as the company’s CEO. Today, there are The Learning Experience locations across the United States.

Entrepreneur’s Franchise 500

23.  The Learning Experience ranked No. 62 on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of The Learning Experience 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 The Learning Experience’s 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:  162
• Outlets at the End of the Year:  193
• Net Change:  +31

2018

• Outlets at the Start of the Year:  193
• Outlets at the End of the Year:  210
• Net Change:  +17

2019

• Outlets at the Start of the Year:  210
• Outlets at the End of the Year:  242
• Net Change:  +32

Company-Owned

2017

• Outlets at the Start of the Year:  22
• Outlets at the End of the Year:  18
• Net Change:  -4

2018

• Outlets at the Start of the Year:  18
• Outlets at the End of the Year:  23
• Net Change:  +5

2019

• Outlets at the Start of the Year:  23
• Outlets at the End of the Year:  25
• Net Change:  +2

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

Part 1 – Average Gross Sales for Certain Franchised and Company-Owned Centers for January 1, 2019 to December 31, 2019

• As of December 31, 2019, there were 267 centers in the United States, 174 of which had been open for at least 24 months. The gross sales information for those 174 Centers for the period January 1, 2019 to December 31, 2019 (“Reporting Period”) is set forth below.

• The information presented excludes 93 Centers (87 Franchised Centers and 6 Company-Owned Centers) that have been open for fewer than 24 months as of December 31, 2019.

• Company-Owned Centers are majority owned by the franchisor or its affiliates, which are operated in a substantially similar manner as Franchised Centers.

• The information is divided into subsets: Centers that were open for more than 48 months (“Mature Centers”) and Centers that were open for 24-47 months (“Intermediate Centers”), as follows:

A.  Mature Centers

Mature Franchised Centers