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The Goddard School Franchise Cost & Fees

Date of Incorporation: 1986
Franchising Since: 1988
Headquarters: King of Prussia, Pennsylvania

Business Description: The franchisor is Goddard Systems, Inc. (GSI). The franchisee will operate a school offering primarily preschool learning programs and care for children between six weeks and 10 years of age under the name The Goddard School. Each school is a licensed childcare facility with an on-site owner, an Education Director and a faculty trained in Early Childhood Education or Childhood Development. GSI provides continuing education for all teachers as well as a corporate Quality Assurance program.

Franchise Offer: The GSI franchise offered is for the operation of a School under the standard franchise agreement. The School will conduct business under the mark “The Goddard School” and any other trademarks, trade names, service marks and related logos as may be developed and authorized for Schools and certain systems relating to the establishment, development and operation of a School. The School will offer primarily preschool programs and care for children between 6 weeks and 10 years of age.

Financial Assistance: Franchisees are responsible to set up their own financing arrangements; however the franchisor has a Finance Department that can assist them in the preparation of financial applications to lending institutions. GSI will not derive revenue from any third party for this assistance. The franchisor’s affiliate, Conestoga Bank, offers to provide financing to its franchisees if they meet Conestoga Bank's credit standards. Except for the loan programs offered by Conestoga Bank, GSI and its affiliates do not offer or arrange direct or indirect financing.

Training and Assistance: GSI will provide franchisees with approximately 8-14 days of intensive training in the marketing, operation, and management of a School. The first phase of training is a combination of online courses and a live 3.5 day session. The second phase of training, which is currently a two week session, will be held approximately two months before the School receives its Certificate of Occupancy (CO). Training classes are currently held at corporate offices in King of Prussia, Pennsylvania, or another location chosen by GSI. GSI may provide all or a portion of the classes via Intranet, webinar or other form of electronic communication in the future. Franchisees must attend, at GSI’s request, supplemental and refresher training programs, sales meetings, operations meetings, advertising meetings and conventions which may be offered periodically at various locations or via Intranet, webinar or other form of electronic communication, determined by GSI during the term of the franchise. The franchisee’s director must attend repeat or supplemental training at the request of GSI.

Territory: Franchisees may operate the School only at the location GSI has approved. GSI does not restrict the area into which franchisees may go to solicit business or the customers whom they may solicit. Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that owned by GSI, or from other channels of distribution or competitive brands that GSI controls.

Term of Agreement and Renewal: The length of the initial franchise term is 15 years. A 5-year renewal is available, if the franchisee meets certain requirements.

Obligations and Restrictions: The franchisor would prefer if the franchisee actively took part in the running of the franchised business. If they do not, the franchisee must employ at least one manager on a full time basis. The franchisee may offer and sell in the Franchised Business only goods and services that the franchisor has authorized the franchisee to sell. The franchisee does not have to sell all the products and services that the franchisor authorizes, but it is suggested that the franchisee does so.

Estimated Number of Units: 440

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $135,000 $135,000
Initial Training and Opening Assistance Fee $35,000 $35,000
Initial Advertising Contribution $35,000 $38,500
Site Development Assistance Fee $30,000 $30,000
Background Check (up to four individuals) $3,000 $5,500
Convention Deposit $1,000 $1,000
Land Acquisition Cost - Optional Varies
Building Construction and Site Work - Optional Varies
Furniture, Fixtures and Equipment $151,000 $176,000
Marketing Materials, Stationery, Forms, and Curricular Resources $13,900 $18,200
Signs $10,500 $10,500
Computer Hardware, Telephone, Interactive White Board and Digital Signage Package $17,000 $17,000
Security System $11,000 $11,000
Miscellaneous Opening Costs $60,600 $81,600
Three Months’ Rent $49,800 $69,900
Advertising Contribution – 3 months $9,000 $9,000
Additional Funds (3 months) $48,300 $90,600
ESTIMATED TOTAL $610,300 $729,300
Other Fees
Type of Fee Amount
Royalty 7% of Gross Receipts of the School; The royalty fee is reduced during the first year to 2% of Gross Receipts for months 1-3, 4% for months 4-6, and 6% for months 7-12, if the franchisee is an existing franchisee purchasing an additional (new) franchise for a reduced initial license fee.
Advertising Contribution $3,000 or 4% of Gross Receipts, whichever is higher, per month.
Telephone charges; Business Listings Management and Online Business Listings Advertising Cost of telephone services and advertising.
Telephone Fee $45 per month per line.
Initial Training First 2 attendees are free. Each additional attendee pays $100 per day.
Additional Territory Fee $50,000 if the franchisee simultaneously buys two Territories when he/she signs the first franchise agreement.
An amount equal to the then-current initial Territory fee if the franchisee buys an Additional Territory at a later time.
Local Advertising, Marketing and Promotion The franchisee’s cost.
Financial Statement Audit The franchisee’s accountant's fees for audited financial statements.
Audit Expenses Cost of audit including the charges of any independent accountant and the travel expenses, including food, transportation and lodging, and compensation of the franchisor’s employees.
Late Reporting Fee $250 for each and every failure and/or refusal to comply plus $100 per day beginning on the third day.
Transfer Training Fee (on-site field and technical) $10,000, subject to annual increase of 10%
Transfer Initial Advertising Contribution $2,500 to $15,000
Transfer Fee and Sales Commission $5,000 transfer assignment fee; 7% sales commission.
Transfer Security Deposit $5,000
Background Check Fee The franchisor’s cost, which it currently estimates is $3,000 to $5,500 for up to four people, plus $1,500 for each additional person's background check run at the same time; the cost may be less for existing franchisees or more due to international background investigations or other reasons.
Director’s Training Fee $1,000-$5,000
Conventions Reasonable registration fee.
Interest on Late Payments 1 ½ % per month or the maximum rate permitted by law.
Insufficient Funds Fees and Other Financial Institution Charges The greater of $30 or the amount imposed by the financial institution.
Insurance; Insurance Reimbursement Policy cost plus reasonable fee for our expenses if the franchisor obtains insurance.
Rent for Premises of School Will vary under circumstances.
Maintenance/ Refurbishing/ Replacement As specified.
Site Development Assistance Fee Up to franchisor’s then current site development assistance fee offered for new franchises; franchisor’s current fee is $30,000
Software Modifications, Enhancements and Other Maintenance and Support Services As specified.
Appraisal Fees The cost of the franchisee’s appraiser and one half of the cost of any third appraiser’s fees.
De-Identify Premises Costs plus reasonable administrative fee.
Litigation Expenses The franchisor’s attorneys' fees, court costs, expert fees and litigation expenses.
Taxes Amount of taxes.
Late Crisis Notification Fee $2,500 for each and every failure to notify plus $500 per day beginning on the second day.
Indemnification Amount of loss or damages plus costs.

The above information has been taken from the FDD of The Goddard School. Year of FDD: 2016

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