Kiddie Academy: $2.06M Average Sales vs. $405K-$1.05M Franchise Cost

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

Section I – Estimated initial investment (franchise costs) for a Kiddie Academy franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Kiddie Academy franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Kiddie Academy outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Kiddie Academy franchise opportunity

Section V – Presentation and analysis of Kiddie Academy’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 average revenue, labor expense, occupancy expense, miscellaneous expense, and gross profit for the bottom quarter, top quarter, and all 269 Mature Academies (i.e., franchisee-owned Kiddie Academy outlets that have been open for at least 24 months) that submitted the required expense information to Kiddie Academy

• 2023 average revenue, labor expense, occupancy expense, miscellaneous expense, and gross profit for the bottom quarter, top quarter, and all 19 Ramping Academies (i.e., franchisee-owned Kiddie Academy outlets that have been open for at least 12 months, but less than 24 months) that submitted the required expense information to Kiddie Academy

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

Section I – Kiddie Academy Franchise Costs

• Kiddie Academy franchise costs (for a leased facility), based on Item 7 of the company’s 2024 FDD:

• Total Initial Fee:  $65,000 to $145,000
• Lease Deposit:  $25,000 to $40,000
• Tenant Contributions for Improvements and Construction Soft Costs:  varies
• Professional Fees and Loan Fees:  $10,000 to $85,000
• Kitchen Equipment and Supplies:  $20,000 to $40,000
• Supplies/Equipment for Inside of Academy, Playground, and Online Training Component:  $95,000 to $225,000
• Outdoor Fixed Playground Equipment:  $50,000 to $225,000
• Computer Hardware and Software, and Classroom Technology:  $25,000 to $65,000
• Office and Lobby Furniture, Office Equipment and Supplies, and Telephone System:  $10,000 to $30,000
• Indoor and Outdoor Signage:  $20,000 to $40,000
• Travel and Living Expenses While Training and Plan Review:  $3,000 to $5,000
• Transportation Vehicles and Equipment:  $0 to $5,000
• Insurance and Utility Deposits:  $4,000 to $10,000
• Business Licenses:  $3,000 to $5,000
• Start-Up Marketing and Advertising Expenses:  $35,000
• Additional Funds/Working Capital – 3 Months After Opening:  $40,000 to $100,000
• Total Estimated Kiddie Academy Franchise Costs:  $405,000 to $1,055,000

Section II – Kiddie Academy’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Kiddie Academy’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2024 FDD:

• Initial Fee:  $65,000 to $145,000
• Royalties:  7% of Gross Revenues
• Brand Building Fund:  2% of Gross Revenues

Section III – Number of Franchised and Company-Owned Kiddie Academy Outlets

Franchised

2021

• Outlets at the Start of the Year:  270
• Outlets at the End of the Year:  286
• Net Change:  +16

2022

• Outlets at the Start of the Year:  286
• Outlets at the End of the Year:  305
• Net Change:  +19

2023

• Outlets at the Start of the Year:  305
• Outlets at the End of the Year:  326
• Net Change:  +21

Company-Owned

2021

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

2022

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

2023

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

Section IV – News Updates on the Kiddie Academy Franchise

• Kiddie Academy Grows Footprint as US Child Care Needs Expand

• Franchise Offers Relief From Tech-Industry Cutbacks

• Kiddie Academy Earns 2023 FUND Score of 915

• Kiddie Academy Partners With VetFran to Recruit Veteran Franchisees

• Kiddie Academy: The Momentum Continues

• New Kiddie Academy Franchise Location Breaks Ground in Wheaton

• Kiddie Academy in Franchise Times Top 400

• Kiddie Academy Ranked No. 116 on Entrepreneur’s 2024 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Kiddie Academy Franchise (Item 19, 2024 FDD)

• The information below represents an actual historic financial performance representation.

• The information was obtained from the financial results reported to Kiddie Academy by its existing franchisee-owned outlets for the full calendar year ended December 31, 2023 (the “2023 Reporting Period”). This information has not been audited or verified by Kiddie Academy or a third party.

• As of December 31, 2023, there were 326 franchised Academies. As of that date, 23 of these Academies (7.1% of the total) had been open and operational for less than 12 full months and have therefore been excluded from the 2023 Reporting Period data set.

• Of the remaining 303 Academies, 15 Academies (4.9% of the total) had failed to report the required information for the full calendar year ending December 31, 2023. The results of these Academies have also been excluded from the 2023 Reporting Period data set.

• Accordingly, the financial performance information presented in the tables below for the 2023 Reporting Period represents the results of the remaining 288 Academies that had reported results as of December 31, 2023 (the “2023 Reporting Academies”).

• The results reported for the 2023 Reporting Academies are divided into two groups: the 269 Academies open 24 months or more as of the end of the 2023 Reporting Period (the “2023 Mature Academies”) and the 19 Academies open less than 24 months as of the end of the 2023 Reporting Period (the “2023 Ramping Academies”).

• Financial performance information about Kiddie Academy’s 2023 Mature Academies and 2023 Ramping Academies includes Gross Revenue, Labor, Occupancy, Miscellaneous Expenses, and Gross Profit.

• All Academies offer substantially the same services and products to the public. However, the actual financial performance among Academies varies substantially.

• The results presented in the tables below indicate the Gross Profit, which is the Gross Revenue minus the listed operating expenses.

• The time periods expressed in the chart below are not meant to be an indication as to when or if an Academy will reach maturity. Each Academy’s growth rate will vary by location, competitive environment, the region and market area in which the unit is located, labor costs, programs, and the individual franchisee’s marketing efforts and management skills.

• Accordingly, the information presented should only be used as a reference guide in conducting an independent analysis of the proposed business.

Part 1 – Mature Academies (Data for Calendar Year Ended December 31, 2023)

• The data in the table below shows the results achieved by the Mature Academies in the listed categories. 123 Academies or 46% of the 2023 Mature Academies reported Gross Revenue above the reported average. 112 Academies or 42% of the 2023 Mature Academies reported Gross Profit above the reported average.

Average

• Number of Academies:  269
• Average Number of Months Open:  108.35

• Average Gross Revenue:  $2,077,526 (100.0%)
• Average Labor Expense:  $968,026 (46.6%)
• Average Occupancy Expense:  $349,447 (16.8%)
• Average Miscellaneous Expense:  $253,782 (12.2%)
• Average Gross Profit:  $506,272 (24.4%)

Median

• Number of Academies:  269
• Average Number of Months Open:  88.57

• Average Gross Revenue:  $1,983,971
• Average Labor Expense:  $936,099
• Average Occupancy Expense:  $345,985
• Average Miscellaneous Expense:  $244,247
• Average Gross Profit:  $419,243

Top Quarter by Gross Profit

• The data in the table below shows the results achieved by the “Top Quarter” of Mature Academies measured by Gross Profit. This group is comprised of 67 Academies. 27 Academies or 40% of the Top Quarter reported Gross Revenue above the reported average. 24 Academies or 36% of the Top Quarter reported Gross Profit above the reported average.

Average

• Number of Academies:  67
• Average Number of Months Open:  94.87

• Average Gross Revenue:  $2,975,292
• Average Labor Expense:  $1,210,096
• Average Occupancy Expense:  $387,140
• Average Miscellaneous Expense:  $345,530
• Average Gross Profit:  $1,032,526

Median

• Number of Academies:  67
• Average Number of Months Open:  83.03

• Average Gross Revenue:  $2,791,330
• Average Labor Expense:  $1,199,906
• Average Occupancy Expense:  $402,569
• Average Miscellaneous Expense:  $336,563
• Average Gross Profit:  $903,875

Bottom Quarter by Gross Profit

• The data in the table below shows the results achieved by the “Bottom Quarter” of Mature Academies measured by Gross Profit. This group is comprised of 67 Mature Academies. 36 Academies or 54% of the Bottom Quarter reported Gross Revenue above the reported average. 40 Academies or 59% of the Bottom Quarter reported Gross Profit above the reported average.

Average

• Number of Academies:  67
• Average Number of Months Open:  120.62

• Average Gross Revenue:  $1,418,515
• Average Labor Expense:  $801,013
• Average Occupancy Expense:  $330,770
• Average Miscellaneous Expense:  $188,859
• Average Gross Profit:  $97,874

Median

• Number of Academies:  67
• Average Number of Months Open:  97.03

• Average Gross Revenue:  $1,447,616
• Average Labor Expense:  $820,114
• Average Occupancy Expense:  $333,324
• Average Miscellaneous Expense:  $180,888
• Average Gross Profit:  $120,833

Part 2 – Ramping Academies (Data for Calendar Year Ended December 31, 2023)

• The data in the table below shows the results achieved by the Ramping Academies. 9 Academies or 47% of the Ramping Academies reported Gross Revenue above the reported average. 8 Academies or 42% of the Ramping Academies reported Gross Profit above the reported average.

Average

• Number of Academies:  19
• Average Number of Months Open:  19.46

• Average Gross Revenue:  $1,890,633 (100.0%)
• Average Labor Expense:  $926,448 (49.0%)
• Average Occupancy Expense:  $281,830 (14.9%)
• Average Miscellaneous Expense:  $224,445 (11.9%)
• Average Gross Profit:  $457,909 (24.2%)

Median

• Number of Academies:  19
• Average Number of Months Open:  20.87

• Average Gross Revenue:  $1,795,697
• Average Labor Expense:  $861,167
• Average Occupancy Expense:  $270,588
• Average Miscellaneous Expense:  $203,148
• Average Gross Profit:  $421,282

Top Quarter by Gross Profit

• The data in the table below shows the results achieved by the “Top Quarter” of Ramping Academies measured by Gross Profit. This group is comprised of the 5 reporting 2023 Ramping Academies with the highest Gross Profit. 2 Academies or 40% of the Top Quarter reported Gross Revenue above the reported average. 2 Academies or 40% of the Top Quarter reported Gross Profit above the reported average.

Average

• Number of Academies:  5
• Average Number of Months Open:  20.83

• Average Gross Revenue:  $2,567,284
• Average Labor Expense:  $1,161,657
• Average Occupancy Expense:  $300,081
• Average Miscellaneous Expense:  $279,264
• Average Gross Profit:  $826,282

Median

• Number of Academies:  5
• Average Number of Months Open:  21.83

• Average Gross Revenue:  $2,433,288
• Average Labor Expense:  $1,162,171
• Average Occupancy Expense:  $278,419
• Average Miscellaneous Expense:  $293,482
• Average Gross Profit:  $758,625

Bottom Quarter by Gross Profit

• The data in the table below shows the results achieved by the “Bottom Quarter” of Ramping Academies measured by Gross Profit. This group is comprised of the 5 Ramping Academies with the lowest Gross Profit. 3 Academies or 60% of the Bottom Quarter reported Gross Revenue above the reported average. 4 Academies or 80% of the Bottom Quarter reported Gross Profit above the reported average.

Average

• Number of Academies:  5
• Average Number of Months Open:  17.81

• Average Gross Revenue:  $1,442,908
• Average Labor Expense:  $812,943
• Average Occupancy Expense:  $334,133
• Average Miscellaneous Expense:  $200,399
• Average Gross Profit:  $95,432

Median

• Number of Academies:  5
• Average Number of Months Open:  18.50

• Average Gross Revenue:  $1,533,528
• Average Labor Expense:  $806,041
• Average Occupancy Expense:  $270,588
• Average Miscellaneous Expense:  $185,082
• Average Gross Profit:  $134,660

Definition of Terms

• Gross Revenue – Gross sales based on actual operating results as reported monthly by franchisees to Kiddie Academy, representing registration fees, tuition, and other amounts charged to families by the franchisee.

• Labor – Employee-related expenses including: wages, salaries, bonus, commission, payroll taxes, training, insurance benefits, and worker’s compensation expenses (where applicable) as reported monthly by franchisees to Kiddie Academy. This also includes the cost of an Academy Director(s).

• Occupancy – Includes rent, common area maintenance, real estate taxes, and percentage rent (if any). This includes other lease-related charges, such as: maintenance, security, trash removal, association dues, and shopping center marketing expenses as reported monthly by franchisees to Kiddie Academy, if applicable.

• Miscellaneous – Includes other (discretionary) variable expenses related to the operation of the business, including: royalties and Brand Building Fees, telephone, advertising, utilities, cleaning services, and postage as reported monthly by franchisees to Kiddie Academy.

• Gross Profit – Gross Revenue minus Labor, Occupancy, and Miscellaneous Expenses. Other non-listed revenue (i.e., state and federal funds, grants, etc.) and expenses (i.e., supplies, food, insurance premiums, etc.) may impact an Academy’s net profit.

Section VI – Kiddie Academy Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️