Tierra Encantada Franchise Costs, Fees & FDD

Year Business Began: 2013

Franchising Since: 2019

Headquarters: Minneapolis, Minnesota

Estimated Number of Units: 15

Franchise Description: The franchisor is Tierra Encantada Franchising, LLC. Franchisees will operate an early childhood education franchise that provides a warm, Spanish-language immersion learning environment for children featuring fresh cooked, globally inspired meals, under the name “Tierra Encantada.”
Training Overview: Before opening a Tierra Encantada center, franchisees (and their operating principal, if different) and their center director must successfully complete the initial training requirements to the franchisor’s satisfaction. Initial training requirements includes the Franchisee Orientation and Site Development Training (Part 1), Franchise Foundations (Part 2), and the Franchise Management Training (Part 3). The duration of the initial training program is approximately 12 days and will be offered at the franchisor’s corporate headquarters in Minneapolis, Minnesota, or at such other location that the franchisor designates. The franchisor also requires grand opening training for up to 10 additional days. Training may take place over the weekend or online. In addition to the initial training program, subject to the availability of its staff, at the franchisor’s discretion it will also assist franchisees in providing grand opening training for on-the-job training at the premises of the franchised center at the time of the grand opening. Franchisees and their operating principal and all other previously trained and experienced center directors, and any other employees designated, must attend and complete to the franchisor’s satisfaction various training courses that it will present and conduct, periodically. The franchisor may periodically conduct a conference, convention, program, or training session. Franchisees and their operating principal must attend each conference, convention, program, or training session.

Territory Granted: The Franchise Agreement will specify the site that will be the approved location for the franchised center. The Franchise Agreement may also specify a protected territory. The size and scope of the territory will be contained in the Franchise Agreement and will be determined, in the franchisor’s sole discretion, during the site confirmation process based upon various factors such as (a) whether the approved location is an urban area or a suburban area; (b) the number of residents living in the area; and (c) the number of children living in the area; among other factors. Because each location is different, the territory for each franchised center will be different; however, each territory will generally contain a population of 50,000 people or more.

Obligations and Restrictions: Under the Franchise Agreement, franchisees (or, if franchisees are an entity, their operating principal) must be involved in the general oversight and management of the operations of the franchised center. If the operating principal or the center director fails to satisfactorily complete the initial training program or if the center director is no longer an employee, franchisees must designate a replacement operating principal or center director as soon as is practical, who is acceptable to the franchisor and who satisfactorily completes the training program. The operating principal must own at least a 10% beneficial interest in the franchised center. Franchisees or their operating principal must hold the required licenses and certifications for the center. Franchisees must not use the franchised center for any other business or operation or for any other purpose or activity at any time without first obtaining the franchisor’s prior written consent. Franchisees must keep the franchised center open and in normal operation for the minimum hours and days as the franchisor may specify. Franchisees must operate the franchised center in strict conformity with the methods, standards, and specifications as prescribed in the operations manual or in writing.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. One renewal term of 10 years is available, if requirements are met.

Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s notes, leases or other obligations.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$48,000	$60,000
Professional Services	$53,277	$99,446
Lease, Real Estate and Improvements	$776,505	$2,468,936
Security, Fire, Video Surveillance, and Keycard Access System	$104,512	$125,181
Outdoor Fence and Playground Area	$145,380	$208,788
Interior and Exterior Signage	$49,960	$57,253
Facility Furniture, Equipment, and Supplies	$178,140	$267,609
Computer Equipment and Software	$3,490	$4,414
Business Licenses and Certifications	$500	$1,419
Insurance	$911	$4,265
Initial and Grand Opening Training	$1,000	$13,930
Opening Advertising/Marketing	$30,000	$47,113
Additional Funds/Working Capital (Pre-Opening – First Three Months of Operation	$150,000	$300,000
ESTIMATED TOTAL	$1,541,675	$3,658,354

 
Other Fees

Type of Fee	Amount
Royalty Fee	Greater of (i) 7% of gross sales or (ii) $500 per week.
Advertising Fund Contribution	Currently 1% of gross sales.
Minimum Local Advertising Obligation	Franchisees are required to spend a minimum of $2,000 per month on local advertising until their center is full.
Advertising Cooperative Fees	Not applicable until there is an advertising cooperative in the franchisee’s region. Will not be more than the minimum local advertising obligation per annum and the franchisor will credit the expenditures to the advertising cooperative toward this requirement.
Technology Fee	The then-current fee (currently, $79 per month). The fee may increase upon notice to franchisees.
Accounting Services Fee	$500
Additional Assistance or Additional Training	$500 per day per person, plus expenses.
Annual Convention Registration	The then-current registration fee, which will vary by program.
Product/Supplier Testing Evaluation Costs	The greater of $500 or the reasonable costs incurred in evaluating the product and/or services.
Transfer Fee	An amount equal to 50% of the then-current initial franchise fee if the franchised center is open and operating. If the center is not open and operating at the time of transfer, this amount will be 100% of the then-current initial franchise fee.
Renewal Fee	$5,000
Relocation Fee	$1,000 provided that if the franchisor’s actual expenses exceed this amount, franchisees must pay the amount which exceeds the fee.
Charges for Inspections and “Mystery Customer” Quality Control Evaluation	Will vary under circumstances.
Late Fee and Interest on Overdue Payments	A late fee equal to 5% of the overdue amount, and interest equal to 1.5% per month (but not more than any maximum rate set by law).
Dues and Assessments Imposed by a Franchisee Advisory Council	As determined by a franchisee advisory council (if established). Currently – none.
Center Refurbishment	Will vary under circumstances.
Audit Expenses	All costs and expenses associated with the audit, reasonable accounting and legal costs.
Costs and Attorneys’ Fees	Will vary under circumstances.
Standard Default Fee	Up to $250 per month per violation.
Prohibited Product or Service Fine	$250 per day of use of unauthorized products or services.
Failure to Provide Required Agreements	$250 per day of failure to provide.
Additional Cure Expenses, Collection Costs, and Post Termination / Expiration Expenses	The franchisor’s cost and expense if it takes action to cure any default by franchisees under the Franchise Agreement, including costs of collection for unpaid amounts.
Indemnification	Will vary under circumstances.
Liquidated Damages	See FDD.
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.

The above information has been compiled from the FDD of Tierra Encantada. Year of FDD: 2025.
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