Building Kidz School: $1.10M Average Sales vs. $266K-$1.08M Franchise Cost

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

Section I – Estimated initial investment (franchise costs) for a Building Kidz School franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Building Kidz School franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned Building Kidz School outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the Building Kidz School franchise opportunity

Section V – Presentation and analysis of Building Kidz School’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2022 average, median, highest, and lowest revenue, expenses, EBITDA, and margin for the top third, middle third, and bottom third of the 23 franchise Building Kidz Schools that were operational for the entire 2022 calendar year, and provided Building Kidz School with reliable data

• 2022 average, median, highest, and lowest revenue, expenses, EBITDA, and margin for the 17 franchise Building Kidz Schools that have been in continuous operation as a franchise location for no less than three years as of December 31, 2022

• 2022 average, median, highest, and lowest revenue, expenses, EBITDA, and margin for the 21 franchise Building Kidz Schools that have been in continuous operation as a franchise location for no less than two years as of December 31, 2022

• 2022 average, median, highest, and lowest revenue, expenses, EBITDA, and margin for the 23 franchise Building Kidz Schools that have been in continuous operation as a franchise location for the entire 2022 calendar year

Section VI – Key ratios, comparables, computations, and analyses for the Building Kidz School franchise opportunity (exclusive content for Platinum subscribers)

Section I – Building Kidz School Franchise Costs

• Building Kidz School franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $50,000
• Pre-Opening Activity Fee:  $25,000
• Costs for Attending Initial Training (per person):  $0 to $5,000
• Grand Opening Cost:  $2,500 to $5,000
• Real Property Lease Deposit:  $10,000 to $50,000
• Real Property Lease Initial Months’ Rent:  $5,000 to $30,000
• Equipment, Fixtures, Other Fixed Assets:  $45,000 to $120,000
• Construction, Remodeling, Leasehold Improvements:  $40,000 to $600,000
• Remote Visibility and Security System:  $5,000 to $10,000
• Opening Inventory:  $1,000 to $2,500
• Learning Through Life Experience (LTLE) Set-up:  $25,000 to $45,000
• CRM Set-up and Hardware Cost:  $1,000 to $2,500
• Hardware Required for Building Kidz Connect Application (1 tablet per classroom):  $1,000 to $4,000
• Outside Signage and Front Lobby Requirements:  $4,000 to $10,000
• Business Licenses and Permits:  $1,500 to $3,000
• Additional Funds for 3 Months:  $50,000 to $125,000
• Total Estimated Building Kidz School Franchise Costs:  $266,000 to $1,087,000

Section II – Building Kidz School’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Building Kidz School’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $50,000
• Royalty:  the greater of 7% of Gross Revenue or the Minimum Royalty ($500 per month)
• Advertising Fund:  1% of Gross Revenue; may be raised to 1.5%
• Advertising Cooperative:  up to 1.5% of Gross Revenue
• Local Advertising Requirement:  $250 to $1,500 per month

Section III – Number of Franchised and Company-Owned Building Kidz School Outlets

Franchised

2020

• Outlets at the Start of the Year:  24
• Outlets at the End of the Year:  30
• Net Change:  +6

2021

• Outlets at the Start of the Year:  30
• Outlets at the End of the Year:  30
• Net Change:  0

2022

• Outlets at the Start of the Year:  30
• Outlets at the End of the Year:  34
• Net Change:  +4

Company-Owned

2020

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  3
• Net Change:  +1

2021

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  3
• Net Change:  0

2022

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  6
• Net Change:  +3

Section IV – News Updates on the Building Kidz School Franchise

• Social Responsibility Drives the Building Kidz Worldwide

• Building Kidz Worldwide: An Award Winning Educational Franchise That Combines Passion, Profits, and Innovation

• Building Kidz School Did Not Rank on Entrepreneur’s 2024 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Building Kidz School Franchise (Item 19, 2023 FDD)

• The information in the tables below is derived from the operation of 23 franchise Building Kidz Schools (“Franchise Locations”) during the period extending from January 1, 2022 through December 31, 2022 (“Reporting Period”) that (i) were operational for the entire Reporting Period, and (ii) provided Building Kidz School with reliable data (“Initial Criteria”).

• Eleven Franchise Locations that were open as of December 31, 2022 did not satisfy the Initial Criteria. Specifically, four Franchise Locations began operations during the Reporting Period and seven locations did not provide Building Kidz School data, or provided data that Building Kidz School did not feel was reasonably reliable.

• The Franchise Locations that met the Initial Criteria (“Qualified Locations”) are broken into various groups with their own criteria for inclusion (“Inclusion Criteria”).

• To meet the Inclusion Criteria for the first three groups (the “Top Third”, “Middle Third”, and “Bottom Third”, respectively), the Qualified Locations must have reported EBITDA margins among the top seven Franchise Locations, middle eight Franchise Locations, or bottom eight Franchise Locations, respectively, of the Qualified Locations.

• To meet the Inclusion Criteria for the fourth group (“School Group 1”), the Qualified Location must have been in continuous operation as a Franchise Location for no less than three years as of December 31, 2022. Six Qualified Locations did not meet the School Group 1 Inclusion Criteria.

• To qualify for inclusion in the fifth group (“School Group 2”), the Qualified Location must have been in continuous operation as a Franchise Location for no less than two years as of December 31, 2022. Two Qualified Locations did not meet the School Group 2 Inclusion Criteria.

• To qualify for inclusion in the sixth group (“School Group 3”), the Franchised Location must have been in operation as a Franchise Location for the entire Reporting Period. All Qualified Locations met this Inclusion Criteria.

• The tables show average and median performance of individual Franchise Locations for the Reporting Period.

• Franchise Locations disclosed in this Item 19 are different in their geographic location, length of time in operation, degree of competition, and services.

Part 1 – 2022 Averages for the Top Third, Seven Franchise Locations

Average

• Revenue:  $1,495,833
• Expenses:  $1,029,052
• EBITDA:  $466,781
• Margin:  31.74%
• Franchised Locations in Group:  7
• Number of Franchised Locations in Group That Met or Exceeded the Average Margin:  3

Median

• Revenue:  $1,155,800
• Expenses:  $830,687
• EBITDA:  $345,967
• Margin:  30.21%

High

• Revenue:  $2,615,443
• Expenses:  $1,835,891
• EBITDA:  $779,552
• Margin:  39.17%

Low

• Revenue:  $598,479
• Expenses:  $431,139
• EBITDA:  $167,340
• Margin:  27.96%

Part 2 – 2022 Averages for the Middle Third, Eight Franchise Locations

Average

• Revenue:  $1,081,557
• Expenses:  $804,580
• EBITDA:  $276,976
• Margin:  25.48%
• Franchised Locations in Group:  8
• Number of Franchised Locations in Group That Met or Exceeded the Average Margin:  4

Median

• Revenue:  $1,163,757
• Expenses:  $878,066
• EBITDA:  $285,691
• Margin:  25.33%

High

• Revenue:  $1,598,022
• Expenses:  $1,163,445
• EBITDA:  $434,577
• Margin:  27.64%

Low

• Revenue:  $556,517
• Expenses:  $427,631
• EBITDA:  $128,887
• Margin:  23.16%

Part 3 – 2022 Averages for the Bottom Third, Eight Franchise Locations

Average

• Revenue:  $779,494
• Expenses:  $679,789
• EBITDA:  $99,705
• Margin:  12.19%
• Franchised Locations in Group:  8
• Number of Franchised Locations in Group That Met or Exceeded the Average Margin:  5

Median

• Revenue:  $526,473
• Expenses:  $459,046
• EBITDA:  $93,389
• Margin:  15.10%

High

• Revenue:  $1,826,489
• Expenses:  $1,683,314
• EBITDA:  $247,608
• Margin:  22.01%

Low

• Revenue:  $333,250
• Expenses:  $285,752
• EBITDA:  -$27.989
• Margin:  -8.40%

Part 4 – 2022 Averages for School Group 1 (Open at Least Three Years), 17 Franchise Locations

Average

• Revenue:  $1,148,317
• Expenses:  $869,912
• EBITDA:  $278,405
• Margin:  21.54%
• Franchised Locations in Group:  17
• Number of Franchised Locations in Group That Met or Exceeded the Average Revenue:  11

Median

• Revenue:  $1,044,970
• Expenses:  $830,687
• EBITDA:  $224,922
• Margin:  25.71%

High

• Revenue:  $2,615,443
• Expenses:  $1,835,891
• EBITDA:  $779,552
• Margin:  35.06%

Low

• Revenue:  $333,250
• Expenses:  $285,752
• EBITDA:  -$27,989
• Margin:  -8.40%

Part 5 – 2022 Averages for School Group 2 (Open at Least Two Years), 21 Franchise Locations

Average

• Revenue:  $1,139,541
• Expenses:  $861,216
• EBITDA:  $278,325
• Margin:  22.28%
• Franchised Locations in Group:  21
• Number of Franchised Locations in Group That Met or Exceeded the Average Revenue:  14

Median

• Revenue:  $1,124,907
• Expenses:  $873,173
• EBITDA:  $247,608
• Margin:  24.95%

High

• Revenue:  $2,615,443
• Expenses:  $1,835,891
• EBITDA:  $779,552
• Margin:  35.06%

Low

• Revenue:  $333,250
• Expenses:  $285,752
• EBITDA:  -$27,989
• Margin:  -8.40%

Part 6 – 2022 Averages for School Group 3 (Open at Least One Year), 23 Franchise Locations

Average

• Revenue:  $1,102,576
• Expenses:  $829,492
• EBITDA:  $273,083
• Margin:  24.76%
• Franchised Locations in Group:  23
• Number of Franchised Locations in Group That Met or Exceeded the Average Revenue:  15

Median

• Revenue:  $1,044,970
• Expenses:  $830,687
• EBITDA:  $247,608
• Margin:  24.95%

High

• Revenue:  $2,615,443
• Expenses:  $1,835,891
• EBITDA:  $779,552
• Margin:  39.17%

Low

• Revenue:  $333,250
• Expenses:  $285,752
• EBITDA:  -$27,989
• Margin:  -8.40%

• For purposes of this Item 19, the calculation of “revenue” does not include (i) any grants received by a franchisee, or (ii) any loans received by a franchisee that were forgiven (including forgiven Paycheck Protection Program loans).

• The term “EBITDA” is defined as earnings before interest, taxes, depreciation, and amortization.

• The average and median years in operation, revenue, expense, and EBITDA information provided in the tables above was prepared from the sales records and reports, as generated by Building Kidz School’s Franchisees’ accounting system, and provided by Building Kidz School’s Franchisees in order to calculate the EBITDA numbers reflected and the underlying data.

• Building Kidz School does not know of an instance, nor does it have reason to believe, that the manager of any Franchise Location would overstate or understate the Franchise Location’s revenues or expenses in the manager’s report.

• The EBITDA numbers include the gross profit minus all ordinary and recurring operating expenses, except interest, income taxes, depreciation, and amortization. The EBITDA percentages reflect the percentage of revenue remaining after all operating expenses, except interest, taxes, depreciation, and amortization have been deducted from total revenue.

• You must receive approval from Building Kidz School before selling any product or service other than its authorized services or products.

Section VI – Building Kidz School Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️