Five Questions to Ask Before Investing in a Children's Franchise

🕒Estimated Reading Time: ~3 minutes

As of the latest United States census, we have over 74 million children in the U.S. and that number is expected to increase to 80.3 million by 2030. In addition, more parents are having children in their 30s and 40s instead of their 20s, so they are more financially stable and have additional money to spend on the children.

For example, according to the New York Times, Americans are expected to spend over $16 billion for summer care for their children this year. In general, parents are expected to spend between $170,000 and $400,000 in order to raise a child up to age 18, depending upon the income level of the family.

All of this data means one thing: there’s never been a better time to buy into a children’s franchise. But before you do, get the answers to these five questions:

1. What are the requirements for a franchisee? Especially when dealing with children, it's important to know if there are certain certifications you will need before being able to buy a children's franchise. You'll also need to know the requirements for any employees that you will need to hire.
2. How much money can you expect to make? In order to get this information, you will need a financial snapshot of how the business is likely to do. The franchise disclosure document will provide industry averages, which can be a great place to start. Also, don’t be shy about interviewing existing franchisees and asking them about their revenues.
3. Other than a startup fee, how much liquid capital will be required until the franchise breaks even? It's easy to find out the initial start-up cost, but you're going to need some operating capital to cover you until the business breaks even. For this reason, you need to know how long it generally takes until a franchise starts turning a profit so you can be prepared ahead of time. Again, the franchisor should be able to provide this information.
4. What types of support can I expect from the franchisor? The franchisor has the obligation to train and mentor its new franchisees. However, the level of support you can expect may vary. It can range from basic written materials, such as a standard operating procedure manual, to hands-on personnel and potentially financial support.
5. What are the core values of the franchisor and how does this impact the franchise culture? Especially when dealing with children, it's important to have a good understanding of the culture behind the franchise as it will impact your business.

Children’s franchises are expected to continue growing in 2019. The question becomes, will you be a part of it? Search children's franchises here.

Susan Guillory is the President of Egg Marketing & Communications, a marketing firm specializing in content writing and social media management. She’s written three business books, including How to Get More Customers With Press Releases, and frequently blogs about small business and marketing on sites including Forbes, AllBusiness, The Marketing Eggspert Blog, and Tweak Your Biz. Follow her on Twitter @eggmarketing.