The Ultimate Guide to Starting a Daycare Franchise

The Ultimate Guide to Starting a Daycare Franchise

The Ultimate Guide to Starting a Daycare Franchise

Buying into a daycare franchise is a less daunting way to step into the daycare industry than by starting your own business with no brand affiliation. However, franchising comes with a different set of challenges. If you’re considering entering into a franchise, you need the right information to determine if franchising is the right fit for your childcare business. We’ve created the ultimate guide to starting a daycare franchise below, covering everything you need to know about daycare franchising.

What is a daycare franchise? 

  1. A franchise is a legal agreement between a company and an individual who wants to establish a business using the company’s brand, trademark, or business systems. McDonald’s is a great example of a franchise: individuals may own and manage a McDonald’s location, but McDonald’s owns the branding and helps to streamline each business so that it meets McDonald’s standards.

  3. In the child care industry, franchises are a common business model.

  5. There are two parts to a daycare franchise - the franchisor and the franchisee. The franchisor is the daycare company that provides its services, brand, and business operating systems to the franchisee. The franchisee is the individual who starts the daycare with the franchisor’s brand. Franchisees often utilize support, business operations, and training from the franchisor. 

  7. ‘Franchise’ legally refers to the contractual obligation between the brand and franchisee, however is also commonly understood as the business using the brand. 

  8. What it means to buy into a daycare franchise

    Buying into a daycare franchise makes you a franchisee. You’ll be starting a branch of a child care company, using that company’s brand, training, and business operating systems. While the details of every franchise agreement are different, you can expect support with creating your branch of the daycare to appropriately meet their standards and practices. 

    The cost of buying into a daycare franchise

    Before you buy into a daycare franchise, you’ll want to consider the expenses that come with it. Depending on the franchise agreement you buy into, there can be extra costs associated, including: 

      • An initial franchise fee. This fee is a one-time payment that covers joining the franchise. These fees can cost anywhere from $10,000 to hundreds of thousands of dollars.
    • Legal & accounting fees. Legal and accounting fees should be set aside to review the Franchise Disclosure Document (FDD), which is given to individuals interested in opening a franchise (the prospective franchisee). It discloses information about the franchisor, fees, and the franchise agreement. Legal fees will vary, but you can expect to set aside at least $2000-$5000 dollars for this.
    • Startup costs. The franchisor may require you to have specific signing, furniture, and inventory for you to open a franchise.
    • Royalty payments. Along with initial startup costs, you’ll have to pay continuous royalty payments to the franchisor for using their branding. These are often percentage fees of your weekly or monthly income that range between 5-10%. 

    All of these fees add up to the initial investment required to open your child care facility. Most franchises will have an initial investment minimum to ensure you can cover the costs for starting your daycare. The initial investment minimum will vary depending on if you’re leasing a franchise or purchasing a franchise.

  10. Additionally, don't forget to consider all of the startup costs that aren't associated with the franchisor, but are an important investment in your business. This includes real estate or rent, licensing fees, inspections, daycare supplies, and anything else you need to purchase in order to prepare your center to open safely and successfully. You can learn more about the steps you'll need to take to open a child care center—whether a franchise or not—in our checklist for opening a child care center.

    Advantages and disadvantages of daycare franchises

    Any business venture involves some investment and level of risk. Some business owners prefer the stability and support that comes with franchising, instead of striking out entirely on their own.  However, franchise opportunities often involve a level of accountability and compliance with the franchisor's brand that doesn't appeal to more independent-minded business owners. 

    To help you decide if buying into a daycare franchise is right for you, we’ve outlined the pros and cons below. 


    Advantages of buying into a childcare franchise

      • Instant name and brand recognition. When you start a franchise with an established brand name, you’ll immediately have a loyal customer base. This makes starting a franchise much less risky than starting a business from scratch.
      • A higher level of trust. Along with the brand recognition, potential customers who have heard of the daycare company you franchise will have more trust in your business. 
      • Support with marketing. Sometimes the franchisor will have marketing materials and support for national and local campaigns, helping you to bring customers to your child care center. 
      • Business operations support. While each franchising agreement will be different, more often than not, franchisors will support you with your business operations. They’ll let you in on trade secrets and internal business practices that work best with their brand to help establish your child care center. Remember that your success is also their success, so they want to see you do well!
    • Training. Some child care franchisors will give you access to staff and management training that aligns with their brand.

    Disadvantages of buying into a daycare franchise

    • Cost. The initial franchise fee, legal fees, real estate fees, and other startup costs can be anywhere from tens of thousands to hundreds of thousands of dollars, making the initial investment of franchises much more expensive to start than other businesses. 
    • Royalty fees. You’ll have to factor in weekly or monthly royalty fees into your budgets, as your income is divided between you and the franchisor. 
    • Less flexibility. Some franchisors have strict requirements and regulations for how you run your business, suppressing the amount of creativity and ownership you have over the day-to-day practices of your child care center.
    • Tied success to franchisor. Your business is tied to the franchisor, so you’ll want to make sure that the franchisor you choose has a good reputation and future plans.

What to look for before joining a franchise

Before buying into a daycare franchise, you should have a set of requirements to look for to ensure that you’re choosing the right franchise for you. Taking your time and doing your research up front can save you from financial and legal headaches in the future. Make sure to evaluate multiple options, and don't commit to the first franchise opportunity that comes along until you're certain it's a great fit for your finances and your early education vision!

  • Cost. When looking at different franchise options, you should consider how much money you can put toward the initial investment. While you can and should be able to take out a loan, you want to make sure that you can provide part of the investment yourself.
  • Competitors in your surrounding areas. You should keep track of different childcare centers and daycare franchises in your vicinity to see where there’s room to stand out. For example, if all childcare centers nearby offer a specific learning philosophy, you might want to explore franchising with a company that has a different philosophy. You could also look at potential differentiators such as price, classroom size, and quality of teaching. 
  • Recommendations and reviews. Because your success is tied to the franchisor’s, you should research how the franchisor is regarded. While you should definitely look out for strengths of the franchisor, also make sure to look out for weaknesses. Good reviews and plenty of recommendations for the franchisor are signs that the franchisor is well regarded. 
  • The company’s growth. You don’t want to invest in a company that isn’t likely to stay around, so you’ll also want to look for a franchisor that is consistently growing.
  • How long you’re tied into the franchise. Different franchises will have varying contractual obligations. Make sure to look out for how long the franchise agreement lasts and the conditions through which you can sell the franchise. Most franchise agreements last 10-20 years.
  • Level of flexibility and creativity. Certain franchises will have strict rules for operating, so you’ll want to look for a franchise that offers the level of flexibility you’re looking for. There can be parameters set for hours of operation, staff wages, software systems, and more, so make sure that you’re aligned with the franchisor before signing the franchise agreement. 
  1. Daycare franchising options 

    To help provide you with some direction when looking for a daycare franchise, we’ve listed some of the biggest childcare franchise opportunities in the United States. These franchises are all well-regarded and are great starting points when first looking into which franchise you’d like to join. However, when determining which franchise is right for you, you should evaluate all of the options available in your area to find the best one for you.

  3. Goddard Schools

  4. Founded: 1986

  5. Initial Franchise Fee: $135,000

  6. Royalty Fee: 7%

    The Goddard School provides both childcare and early childhood education for young children from six weeks to six years of age. Their philosophy stresses the importance of different learning styles for each child and learning outside the box. Goddard empowers teachers to adapt their teaching styles and lesson plans with their F.L.EX (fun learning experience) framework.

  8. Creative World School 

  9. Founded: 1970

  10. Initial Franchise Fee: $75,000

  11. Royalty Fee: 5-7%

    Curiosity is at the core of Creative World School. Educators teach children as if they were teaching adults, encouraging questioning and thinking to inspire learning. Creative World School puts child-directed exploration at the heart of their learning curriculum and aims to supply open-ended materials for children to explore.

  13. Children’s Lighthouse

  14. Founded: 1996

  15. Initial Franchise Fee: $75,000

  16. Royalty Fee: 7% and a monthly $250 advertising fee

    Children’s Lighthouse provides early childhood education and emphasizes learning with character values through their C.A.R.E.S curriculum. They aim to teach children to be people with values, to foster strong relationships, and to have high emotional intelligence throughout their lessons. Each month, lessons are centered around a specific trait, such as integrity or honesty.

  18. Primrose School

  19. Founded: 1982

  20. Initial Franchise Fee: $80,000

  21. Royalty Fee: 7% with a 2% ad royalty fee.

    The Primrose School aims to instill a love for learning in infants through kindergarteners. Their balanced learning approach supports curiosity, creativity, confidence, and compassion through a curriculum that blends the early learning philosophies of Piaget, Montessori, Gesell, and Vygotsky.

  23. Discovery Point

  24. Founded: 1986

  25. Initial Franchise Fee: $75,000

  26. Royalty Fee: 6%

    Discovery Point aims to nurture creative thinking and problem-solving in infants through school-aged children. They implement a research-based curriculum and child-centered approach in their child care facilities, ensuring that each child is set up with the tools needed for the rest of their academic careers.

  28. Kiddie Academy

  29. Founded: 1981

  30. Initial Franchise Fee: $60,000- 135,000

  31. Royalty Fee: 7% and a 2% brand-building fee

    Kiddie Academy cares for children between six weeks and twelve years of age. Educators are trained to bring out what makes each child unique and to foster their talents and interests at their own pace. Exploration and preparation for future learning opportunities are core elements of Kiddie Academy’s learning philosophy.

  33. KLA Schools

  34. Founded: 2008

  35. Initial Franchise Fee: $78,500

  36. Royalty Fee: 6% and a 1.5% advertising fee

    KLA schools are aligned with the Reggio Emilia approach to early childhood education, focusing on hands-on learning, discovery through sensory play, and independence. KLA encourages child-directed learning and for educators to learn alongside the children.

  38. KidsPark

  39. Founded: 1988

  40. Initial Franchise Fee: $28,000

  41. Royalty Fee: 5% with a $250 per month advertising fee

    KidsPark is focused on providing drop-in childcare and afterschool programs for children between 2 and 12 years old. They offer hourly, daily, evening, and weekend childcare for parents. KidsPark mixes child-initiated and teacher-led activities to foster lifelong skills in the children they care for.

  43. LeafSpring Schools

  44. Founded: 1988

  45. Initial Franchise Fee: $87,500

  46. Royalty Fee: 6%

    Formerly known as Rainbow Station, LeafSpring Schools provides care and early childhood education for infants from six weeks of age through kindergarteners. They also offer afterschool programs for children. They focus on building a community, celebrating diversity, and fostering innovation, creativity, integrity, and leadership in their children.

  49. Daycare franchising can be an excellent option for some people, but you’ll want to consider all of your options before buying into a franchise opportunity to make sure franchising is right for you. If franchising doesn’t seem like a great fit with your childcare center goals, we have plenty of resources to help you determine if opening your own childcare center is a better option for you. You may want to check out our comprehensive guide to starting a childcare center or our list of daycare names to inspire you.

  51. No matter which option you choose, we’re so excited for you to jump into directing your own childcare center. Best wishes for the journey ahead!

Brightwheel is the complete solution for early education providers, enabling you to streamline your center’s operations and build a stand-out reputation. Brightwheel connects the most critical aspects of running your center—including sign in and out, parent communications, tuition billing, and licensing and compliance—in one easy-to-use tool, along with providing best-in-class customer support and coaching. Brightwheel is trusted by thousands of early education centers and millions of parents. Learn more at

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