Parents spend a lot on their kids. For example, according to the most recent Consumer Expenditures Survey, a family will spend nearly $13,000 annually per child in a middle-income household until that child turns 18. In fact, according to the Department of Agriculture, parents who have a child today (in 2021) will spend, on average, $284,570 by the time the baby turns 18.
Of course, most of that output is towards housing and food. However, a good deal of that money is spent in child care and extracurricular activities—places where there are no shortage of franchise options.
Parents spending on their kids’ extracurricular activities has steadily risen over the years—and it’s not showing any signs of slowing.
According to Charles Schwab, “From sports to music to dance to computer coding, the world of kids’ extracurricular activities keeps growing. […] According to a recent survey, 46 percent of parents spend more than $1,000 annually on their kids’ activities; 27 percent spend more than $2,000.”
And these figures are on the low end, some extracurricular activities can add as much as $100,000 to a family’s annual monetary spending.
Children’s franchises today go well beyond the typical daycares and tutoring. Particularly, because of the funding cuts to school and after school programs, nowadays you can find a children’s franchise for anything from fitness to cooking and so much more too.
Here’s a sample of the range of service areas in which you can find a children’s franchise:
- Art
- Clothing and other retail
- Dance
- Driving instruction
- Education and tutoring
- Entertainment
- Fitness and sport
- Food
- Hair salons and spas
- Photography
- Martial arts and safety
- Music
Initial Investment and Opening Costs for Children Franchises
The amount necessary to open a franchise varies depending on the unique business system and execution requirements. To illustrate, according to Franchise Grade, the initial investment required for a franchise in children’s services can range from a low of around $10,000 to a high of over $5,600,000.
The exact opening costs for a given children’s franchise depends on many factors, including but not limited to: the franchise fee, training expenses (such as travel and living expenses, not the actual training courses), grand opening advertising and marketing costs, and more.
It’s important to note, however, that children’s franchises that have opening costs in the millions commonly involve a significant land purchase and require a facility to be built. Many children’s service franchises have an initial investment range significantly under $200,000, particularly those that can operate as a mobile operation with the franchisee’s home as the base.
The franchise profiles on our website will present you with a basic range for the initial investment or minimum cash required to open a franchise. But when it comes to finding out the details of an initial investment, the Franchise Disclosure Document is the best place to look. Franchisors offer itemized estimates in their FDD based upon their experience establishing, and in some cases operating, units.
Keep in mind these estimates are just that, though—an estimate. Prospective franchisees should review the figures presented with a business advisor, taking into consideration their unique circumstances, before making the decision to enter into a franchise agreement.
Considerations When Becoming an Owner of a Children’s Franchise
Here are just a few things to keep in mind when considering becoming the owner of a children’s franchise.
What attributes are well-suited for being a children’s franchise owner?
Anyone who works with children should possess patience, enthusiasm, stamina, and a bit of imagination. These attributes need to present along with good management and organizational abilities to take care of the managerial and administrative responsibilities. Also on the business side, interpersonal skills to lead staff and deal with parents are equally important.
In some cases, the managerial and administrative side is where the franchisee will be doing the largest percentage of their work as some franchises allow what is sometimes called “executive” ownership. In franchises with an executive ownership option, the franchisee will hire employees to complete the main tasks of the franchise (e.g. hiring instructors for a swim school instead of doing the teaching themselves). In these franchises, oversight is the main function of the franchisee.
Do I Need Prior Experience?
As with virtually all franchises, previous experience in the franchise industry isn’t a necessity—just a passion for the area and the willingness to work hard.
“Our ideal franchise owner will have a passion for both business and for making a difference in their communities, more specifically with protecting and safeguarding our youngest,” Brian Garrison of British Swim School says, for instance. Franchisees “do not need aquatic experience nor necessarily experience working directly with children. [Though] it is typically more beneficial to have a good business background – either as a small business owner or in corporate America – combined with a passion for helping people.”
Alan Majerko of Winmark Corporation, a franchisor of several retail brands, including Once Upon A Child, echoes those feelings. “Interestingly enough, a typical Winmark franchisee does not have previous retail experience,” he told us.
“We look for people who have a strong work ethic, demonstrate solid character, possess previous management and leadership experience, and are committed to being a hands-on, owner operator. It is also important to take note of their involvement in the local community, both in the past and present, because we encourage our franchisees to continue that outreach.”
Keeping Year-Round Revenue
One topic prospective children’s franchise owners need to address is how the franchise system they are researching copes with busy and quieter periods, for example during school breaks and conversely when children are in school.
Special Regulations
It is the franchisee’s responsibility to make sure he or she is in compliance with the franchisor’s requirements, as well as all applicable laws and regulations of his or her area.
Some states may require franchisees to obtain specific certifications or licenses to operate an education-based franchise, and most states will require a background check for those employed to work with or around children. In addition, depending on local zoning codes, a franchisee may experience additional requirements such as the need for separate bathrooms for boys and girls, water fountains, special exit doors equipped with panic bars, fire safety improvements, and accommodations for disabled persons.
While the franchisor will be of great assistance, a prospective franchisee should consult the appropriate local authorities for requirements that may apply to the franchise before signing any agreement.
You can also check out many more exciting opportunities, such as Child Care Franchises and Tutoring Franchises, here on Franchise Direct.