A New Appreciation for Children’s Franchises
Parents, by-and-large, found out just how much they depend on child care and other children’s services franchises during the pandemic. So, as things creep back towards “normalcy,” child care and children’s franchising should regain the little footing it lost as families begin to fill in their outside schedules again.
And no matter what parents want to put on their children’s schedules, there’s a franchise for it.
Child-related franchises cover a wide range of service areas, including (but not limited to):
This report has some quick hits on developments in the children’s franchise industry over the past couple of years, along with franchise investment information and links to franchise opportunities actively seeking franchisees.
Virtual Learning Challenges Lead to Opportunity
“As virtual learning trends continue into 2021, many families have found their children falling behind as in-person education [became] a rare commodity,” says Amy Tatnall of 1851 Franchise. “As a result, supplemental childhood education and tutoring programs have seen substantial growth over the last year. For those looking into new franchise opportunities, the childhood education industry is poised for continued growth.”
Primrose Schools is a good illustration, the child care and education franchise opened 28 new schools across the country in 2020 during the COVID-19 pandemic, and has more aggressive growth goals set nationwide for 2021.
“After the year we have been through, milestones seem to mean more,” Jo Kirchner, CEO of Primrose Schools, said when the franchise celebrated the opening of its 450th school on April 29. “The incredible importance of what we do has become apparent to everyone, and we’re more energized than ever to prepare our next generation of leaders.”
And Primrose wasn’t the only one. While Tutor Doctor repurposed its online tutoring offerings for the need of pandemic learning, it was just one of the franchises that also built out new programs such as pod tutoring, homeschooling and online tutor share. The changes helped the franchise welcome 46 new franchisees and award more than 70 new units in 2020.
“These programs were built on the principle of being safe, structured learning environments that take the onus off parents whose children need supplemental learning options or supervision during the school week,” said the company in a statement. Many of these programs have continued into 2021, offering additional revenue streams for franchisees as in-person tutoring returns to pre-pandemic levels.
“Across the board, 2020 was a year that stressed the need for innovation and collaboration like never before—and that push has benefited Tutor Doctor in a great way,” said company president Frank Milner. “We will be able to support students in their studies with more resources and programs that continue to be customized to their needs.”
Recognizing the Importance in Recreation
Resocialization is a key concern that will likely positively impact the growth potential for children’s franchises. Experts have cautioned that the sudden shift last year from in-person learning and extracurricular activities to socially-distanced activities has broadly impacted overall mental health. As the US National Social Anxiety Center has said, “keep in mind that every single one of us is now socially awkward to a certain extent”.
The posited cure for the rise of social awkwardness in children brought on by pandemic restrictions is getting them back into recreational activities. Or as Dr. Jennifer Lighter, a pediatric infectious disease specialist at NYU, told the New York Times: “Kids should be in camp,” as helping children resume social activities is important to their health.
“Children’s sports and recreation programs help children in so many ways, but above all else, I believe these programs provide children with a sense of purpose,” says Alexandra DeLory, co-director and instructor at a Canadian dance studio.
“Recreational activities provide a sense of community, belonging and socialization,” she adds. “To our students and many other children, their sport and recreation [center] is their second home and family, and several children are struggling deeply right now with the ongoing separation from these people and places.”
Though they might play a big role, recreational franchises won't be the only children's franchises focused on social-emotional development, however. In addition to the other opportunities noted in the above section, child education franchises will also play a large role in resocialization.
"As we emerge from the pandemic as a society, there is a need to support the social and emotional needs of children seeking a return to normalcy," says Dennis R. Maple, Chairman and CEO of Goddard Systems, Inc., franchisor of The Goddard School.
To aid in that support, the franchise has developed Life Lesson Library, a collection of books to help young children learn five educational themes including 1) self-awareness, 2) self-management, 3) social awareness, 4) relationship skills, and 5) responsible decision-making.
“We are here to partner with parents in providing children the opportunity to grow and learn while having fun. We believe the best way to do this is through the power of interactive reading," Maple also said. "Teachers read meaningful books, children participate in play-based activities adapted from those stories, and parents help these life lessons blossom at home.”
Ready to Indulge Again
In addition to the positive impact on mental health and brain development, children’s recreation franchises also simply allow for fun.
For instance, birthday parties are a common event for parents to spend on. According to Business Insider, it’s not uncommon for wealthy parents to spend $50,000 or more. For companies like children’s art franchise Kidcreate Studio that factoid only underlines the potential out there for its franchise opportunity—even for parents that are much more budget conscious.
“Kidcreate gives them the perfect place” to safely host events, said the company in a news release. “They’ll be able to plan the perfect birthday party that is still COVID-19 friendly by hosting only small groups, implementing social distancing and masks while sanitizing all workspaces. Their kids can have an educational, creative, and fun experience on their birthday that they won’t easily forget.”
Now, after the COVID-19 pandemic forced the plans into a holding pattern for roughly a year, those parties and celebrations are expected to roar back in a huge way.
Kids Clothes are Big Business in Resell Retailing
Kids go through a lot of clothes—and quickly. To offset the expense, many parents turn to secondhand or resale retailers to sell their kids’ lightly used clothing (along with toys and other items), as well as find lower priced items for themselves.
Resell retailing has become big business, particularly in the area of children’s clothing and goods. And, of all of the franchises in this area, Once Upon A Child leads the way in North America. The company boasts an estimated 400 locations in the United States and Canada.
Once Upon A Child is owned by Winmark Corporation, the parent company of five resale concepts: Music Go Round (music instruments), Once Upon A Child (children’s clothing and toys), Plato’s Closet (teen and young adult clothing), Play It Again Sports (sports equipment) and Style Encore (women’s clothing and accessories).
For some more background on this franchise industry segment, we had the opportunity to interview Alan Majerko, vice president, franchise development at Winmark Corporation earlier in 2021.
Can you briefly describe Once Upon A Child for those who aren’t familiar?
Founded in Columbus, Ohio in 1993, Once Upon a Child became one of the first in Winmark Corporation’s arsenal of franchises. Once Upon A Child, the retail franchise leader in the children’s resale space, offers high quality used, brand-name apparel, shoes, toys, equipment, and accessories at a fraction of the retail cost to primarily female shoppers between the ages of 25 and 65, many being mothers, grandmothers and aunts.
How has the resale retail market been faring with the pandemic?
Our franchisees have been resilient throughout the pandemic and remain responsive to their guests’ needs. Many franchisees have implemented appointment based buying in order to continually purchase high quality used goods for their stores, curbside pick-up, and have turned to posting merchandise on social selling sites.
Once Upon A Child is part of larger organization in Winmark Corporation, what have been the major advantages to being within a multi-brand operation?
The major advantage is the opportunity to receive support from seasoned retail individuals. Winmark has employees dedicated to helping our franchisees with training, marketing, operations, and other functions. The same team supports and provides the franchisees with business plan guidance, site selection assistance, store design and layout, inventory management, professional marketing materials, product, style, and trend training, industry specific training, and proprietary computer systems training. We have close to 30 years of experience in the industry and our franchisees truly benefit from that.
What kind of characteristics are most-needed to be a successful retail franchisee?
Interestingly enough, a typical Winmark franchisee does not have previous retail experience. 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.
Buying a Children’s Franchise
Prior to investing, prospective franchisees should do their research as well as carefully review the franchisor’s Franchise Disclosure Document (FDD) for more detailed information on all systems, procedures and costs associated with that franchise.
It’s important to note that while many initial and ongoing costs are detailed in the FDD, there are some costs inherent to business ownership, like employee wages or utility costs, that aren’t.
Do I Need Experience Going In?
As with virtually all franchises, and touched on in the previous section with Alan Majerko of Winmark Corporation, 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.”
Initial Investment and Opening Costs for Children’s 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.
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.
Our franchise profiles 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.
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Start your franchise search today by searching our listing of some of the top children's franchises. You also find advanced investment information for a number of children’s franchises in our FDD Research Hub.
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