Childcare centers and daycares play a crucial role in early childhood education and the communities they serve. With the growing demand for quality childcare services, starting a daycare franchise presents a unique opportunity to make a positive impact on families while also building a successful business.
Starting a daycare franchise can be a convenient and less daunting way to step into the childcare industry since you don't have to start from scratch. It’s also less risky, especially when you join a franchise with an established brand. The best part is that some franchisors even offer training, marketing, and business operations support so you won't incur most of the usual business costs.
However, diving into the world of franchising can be challenging without the right knowledge and guidance. In this article, we will explore the ins and outs of starting a daycare franchise, covering everything from the benefits of franchising to the essential steps involved in establishing your own thriving childcare center.
What is a daycare franchise?
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.
In the childcare industry, franchises are a common business model. There are two parties 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 that starts the daycare with the franchisor’s brand. Franchisees often utilize support, business operations, and training from the franchisor.
Note: The term “‘franchise” legally refers to the contractual obligation between the brand and franchisee but is also commonly understood as the business using the brand.
What to expect when buying into a daycare franchise
When buying into a daycare franchise, there are several key aspects to consider and expect during the process. First, you can anticipate a structured system that has already been established and proven successful. Franchises provide a framework for running a daycare center, including guidelines on curriculum, policies, procedures, marketing strategies, and more. This can be a major advantage for those new to the industry, as it eliminates much of the guesswork and allows you to focus on providing quality care.
Additionally, buying into a daycare franchise means joining a supportive network of fellow franchisees and corporate staff. Franchise companies often offer extensive training and ongoing support to help you navigate the challenges of running a childcare center. This support system can include regular meetings, conferences, webinars, and access to online resources for continued education. Being part of a franchise also provides opportunities for networking and collaboration with other franchise owners, allowing you to learn from their experiences and share best practices.
Another aspect to expect when buying into a daycare franchise is the need for financial investment. Franchise fees, which vary depending on the brand and the size of the business, are typically required upfront. Additionally, ongoing royalty fees or a percentage of your monthly revenue may be required. It's important to thoroughly review and understand the financial obligations associated with the franchise before making a commitment. However, the benefit of investing in a well-established brand and proven business model can potentially outweigh the initial costs.
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 starting their own childcare center.
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.
We've outlined the pros and cons below to help you decide if buying into a daycare franchise is right for you.
Advantages of joining 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 brand recognition, potential customers who have heard of the daycare company’s brand will have more trust in your business.
- Marketing support: Sometimes, the franchisor will have marketing materials and support for national and local campaigns, helping you bring customers to your childcare 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 childcare center. Remember that your success is also their success, so they want to see you do well!
- Training: Some childcare franchisors will give you access to staff and management training that aligns with their brand.
Disadvantages of joining 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 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 childcare center.
- Success is tied to the franchisor: Your business is tied to the franchisor, so you’ll want to ensure that the franchisor you choose has a good reputation and solid business plan.
How to start a daycare franchise
Starting a daycare franchise can be an exciting and rewarding venture for those passionate about providing quality childcare services. Not only does it offer the opportunity to make a positive impact on children's lives, but it also allows entrepreneurs to tap into a growing industry.
Before buying into a daycare franchise, create 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 upfront 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!
1. Research and choose the right franchise
The first step in starting a daycare franchise is conducting thorough research. Look for reputable franchises with a proven track record in the childcare industry. Consider factors such as brand reputation, support systems, training programs, and financial requirements. Attend franchise expos and speak with current franchisees to gather insights and information. Ultimately, choose a franchise that aligns with your values, goals, and vision for your childcare program.
2. Understand the financial obligations
There is considerable financial investment when starting a daycare franchise. Familiarize yourself with the franchise fees, ongoing royalties, and any other financial obligations associated with the franchise.
Consider how much money you can put toward the initial investment. While you can take out a loan, you want to ensure that you can provide part of the investment yourself. Create a comprehensive business plan to understand the costs involved in opening and operating your daycare center.
3. Select a location and get licensed
Finding the right location is vital for a successful daycare franchise. Consider factors such as accessibility, proximity to residential areas, competition, and safety regulations. Research local licensing requirements and obtain the necessary permits and licenses to operate legally.
4. Set up your facility
It's important that your childcare program has a safe, stimulating, and child-friendly environment. Consider the space requirements, classroom layout, and age-appropriate facilities such as play areas, nap rooms, and outdoor spaces. Ensure compliance with health and safety regulations.
You'll also need to purchase supplies and materials for your facility. A comprehensive supply list will include health and safety supplies, cleaning supplies, furniture, and age-appropriate equipment and play materials.
Childcare management software such as brightwheel is another essential item to enable you to run an efficient and profitable childcare program. This type of software can help simplify administrative tasks and save you valuable time each month. With a tool like brightweel, you can streamline your enrollment process, create and customize lesson plans, and communicate easily with families.
5. Hire qualified staff
A high-quality childcare program often stands out due to the high caliber of its staff and teachers. Invest in your recruiting and hiring processes so you can find qualified and dedicated staff who are passionate about early education. Spend time writing thorough job descriptions, advertising your open positions, and conducting formal interviews.
Once you have a team in place, create a thoughtful onboarding process that introduces your new hires to your childcare program and sets them up for success in their role. Develop an employee handbook that outlines your policies, procedures, and expectations and share it early on. Check in with your staff regularly during their first 90 days to ensure they understand how their work aligns with your business goals and objectives and provide plenty of opportunities for training.
6. Develop policies and procedures
Establish clear policies and procedures for your daycare center, including operating hours, enrollment criteria, discipline policies, emergency procedures, and communication protocols. Ensure all staff, families, and children are familiar with these policies to maintain a smooth-running operation.
7. Create a marketing strategy
Develop a marketing strategy to attract prospective families and fill your center's enrollment capacity. Utilize both online and offline marketing channels, including social media, local advertising, and community outreach. Create a website, distribute brochures and flyers, and host open houses to showcase your center's unique offerings.
Your childcare center name can also be a potential marketing opportunity. A unique or catchy name can help your program stand out and make it easier for families to remember. Consider naming your center after local landmarks or something that signals your school's values or learning philosophy.
8. Utilize provided training and support
Franchise companies typically provide ongoing support and training to their franchisees. Take advantage of these resources, attend conferences, training sessions, and network with other franchisees to stay updated on industry best practices and trends.
Top 9 best childcare franchise opportunities
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. 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 your business.
Initial franchise fee
7% and 4% ad royalty fee
7% and a monthly 0.5% advertising fee
7% and a 2% ad royalty fee
$7k+/month and $2.4k+/month ad fees
7% and a 2% brand-building fee
6% and a 1.5% advertising fee
5% and a $250/month ad royalty fee
1. The Goddard School
- Founded: 1983
- Initial franchise fee: $135,000
- Royalty fee: 7% and 4% ad royalty fee
- Daycare centers: 600+
- Headquarters: King of Prussia, Pennsylvania
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.
2. Creative World School
- Founded: 1970
- Initial franchise fee: $80,000
- Royalty fee: 5-7%
- Daycare centers: 30
- Headquarters: Bonita Springs, FL
Curiosity is at the core of Creative World School. Educators teach children by encouraging questioning and thinking to inspire learning.
Creative World School puts child-directed exploration at the heart of its learning curriculum and aims to supply open-ended materials for children to explore.
3. Children’s Lighthouse
- Founded: 1997
- Initial franchise fee: $85,000
- Royalty fee: 7% and a monthly 0.5% advertising fee
- Daycare centers: 95+
- Headquarters: Fort Worth, Texas
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.
4. Primrose School
- Founded: 1982
- Initial franchise fee: $50,000 - $80,000
- Royalty fee: 7% with a 2% ad royalty fee
- Daycare centers: 500+
- Headquarters: Atlanta, Georgia
The Primrose School aims to instill a love for learning and serves infants through kindergarten age groups. 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.
5. Discovery Point
- Founded: 1988
- Initial franchise fee: $95,000
- Royalty fee: $7K+/month and $2.4K+/month ad fees
- Daycare centers: 47
- Headquarters: Florida
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 childcare facilities, ensuring that each child has the tools needed for the rest of their academic careers.
6. Kiddie Academy
- Founded: 1981
- Initial franchise fee: $65,000 - $145,000
- Royalty fee: 7% and a 2% brand-building fee
- Daycare centers: 300+
- Headquarters: Abingdon, Maryland
Kiddie Academy cares for children between six weeks and twelve years of age. Educators bring out what makes each child unique and 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.
7. KLA Schools
- Founded: 2008
- Initial franchise fee: $78,500
- Royalty fee: 6% and a 1.5% advertising fee
- Daycare centers: 25
- Headquarters: Miami, Florida
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 Schools encourage child-directed learning where educators learn alongside the children.
- Founded: 1988
- Initial franchise fee: $30,000
- Royalty fee: 5% and a $250/month ad royalty fee
- Daycare centers: 21
- Headquarters: San Jose, California
KidsPark focuses on providing drop-in childcare and after-school programs for children between two and 12 years old. They offer hourly, daily, evening, and weekend childcare for families. KidsPark mixes child-initiated and teacher-led activities to foster lifelong skills in the children they care for.
9. LeafSpring Schools
- Founded: 1988
- Initial franchise fee: $87,500
- Royalty fee: 6%
- Daycare centers: 14
- Headquarters: Richmond, VA
Formerly known as Rainbow Station, LeafSpring Schools provides care and early childhood education for infants from six weeks of age through kindergarten. They also offer after-school programs for children.
They focus on building a community, celebrating diversity, and fostering their children's innovation, creativity, integrity, and leadership.
Daycare franchise frequently asked questions
Are daycares profitable?
The childcare industry is generally a profitable and in-demand industry. The market size of the U.S. childcare industry was $64.8bn in 2022 and has grown 1.1% per year on average between 2017 and 2022. According to IBISWorld the average profit margin for a daycare business is around 15%.
The profitability of a daycare center depends on factors such as enrollment capacity, location, operational costs, and management efficiency.
What are the costs of buying into a daycare franchise?
One of the primary costs when buying into a daycare franchise is the franchise fee. This fee grants you the right to operate under the franchisor's brand and utilize their established systems and support. Franchise fees can vary significantly depending on the brand, size of the business, and location.
There will also be expenses associated with the physical location of a childcare center as you may need to lease or purchase a property or renovate a facility to meet local zoning and licensing requirements. Other costs to consider include equipment and supplies, staffing and training expenses, marketing and advertising costs, insurance, and day-to-day operational expenses.
You’ll also 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 childcare facility. Most franchises will have an initial investment minimum to ensure you can cover the costs of starting your daycare.
What is the most popular daycare?
The most popular daycare worldwide is KinderCare Education LLC, with over 1,300 locations. Next on the list are Bright Horizons Family Solutions with over 1,000 locations, Learning Care Group with over 900 locations, Goodstart Early Learning with over 644 locations, and Primrose schools with over 5 locations.
Other popular daycares include KU Children’s Services, LeafSpring Schools, Goddard Schools, Creative World Schools, Children’s Lighthouse, Discovery Point, Kiddie Academy, and KLA Schools.
Do you need a degree to open a daycare?
While provider requirements vary by state, you typically need a combination of education credentials and relevant experience in the childcare industry to meet local licensing requirements in order to operate a childcare program.
For example, some states require providers to have an associate degree in early childhood education or an equivalent or a high school diploma and at least three years of experience caring for children. Most states will also require teachers to have specific education and experience qualifications and attend a certain amount of training annually.
Starting a daycare franchise can be an exciting and rewarding venture, but it’s important to consider all the factors involved. Access to a franchisor's support can provide your business with much needed resources, but sometimes this agreement is not right for every childcare business. With careful research and planning, you can decide if joining a franchise is right for you.
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 mybrightwheel.com.