Code Ninjas Franchise in 2024: Costs, Fee & FDD

Discover why Code Ninjas is becoming a top choice for franchise investors. Learn about its innovative approach to coding education, market potential, and what makes it stand out in the STEM industry.

Last updated 8 Oct 2024 Time 12 min read
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Code Ninjas is a dynamic franchise that blends education with fun, offering a unique approach to teaching kids how to code. Founded in 2016 by David Graham, a software developer and entrepreneur, the franchise was born out of a desire to empower children with the skills they need to succeed in a tech-driven world. Graham saw the growing demand for coding education and created a program that not only teaches coding but does so in an engaging, game-based environment. This innovative approach quickly gained traction, making Code Ninjas a standout in the supplemental education industry.

At the heart of Code Ninjas is its core product: a curriculum designed to teach kids ages 7-14 how to code through building their own video games. This is not just about coding; it’s about fostering problem-solving skills, creativity, and critical thinking. The program is divided into levels, much like martial arts belts, allowing kids to progress at their own pace. Beyond coding, Code Ninjas also offers programs in robotics, game development, and even camps, making it a comprehensive learning environment for tech-savvy kids. The core market for Code Ninjas is parents looking for after-school programs that are both educational and entertaining, with a strong appeal to those who recognize the value of STEM education.

As of now, Code Ninjas has grown rapidly, with hundreds locations across the United States, Canada, and the United Kingdom. This impressive expansion is a testament to the demand for quality coding education and the franchise’s ability to scale effectively. Each location serves a vibrant community of young learners, with thousands of kids walking through the doors of Code Ninjas centers daily. The franchise’s global reach and robust daily customer base highlight its significance in the education sector, particularly in the field of supplemental and remedial learning.

When it comes to franchisee support, Code Ninjas excels. New franchisees benefit from a comprehensive training program that covers everything from educational methodologies to business operations. Ongoing support is provided through marketing resources, a dedicated franchise support team, and continuous updates to the curriculum to keep it relevant in the ever-evolving tech landscape. Additionally, franchisees have access to a strong community of fellow owners, offering a network of support and collaboration. These elements make Code Ninjas not just a franchise, but a community of educators and entrepreneurs committed to shaping the future of tech education.

Code Ninjas Franchise Insights

  1. The franchise taps into the natural curiosity and creativity of children, transforming what could be a complex subject like coding into something as fun and approachable as playing a game.
  2. Code Ninjas’ focus on building real-world skills means kids not only learn to code but also develop problem-solving abilities and resilience, setting them up for future success in any field.
  3. The sense of community at Code Ninjas is palpable, as both kids and parents often form lasting bonds with the program, making it more than just an extracurricular activity—it’s a supportive learning environment.
  4. The franchise’s adaptability is a key strength, with its curriculum evolving to stay ahead of educational trends, ensuring that what kids learn is always relevant and future-focused

Code Ninjas Franchise Key indicators

Growth YOY (%)

-7%

vs industry 0%


Total U.S. Franchised Units

263


3-Year Failure Rate

21%

vs industry 10%


Sales-to-Investment ratio

0.8:1

How much does it cost to open a Code Ninjas franchise?

Understanding the potential investment size and capital requirements is crucial when considering opening a Code Ninjas franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.

Min & Max Investment

Opening a Code Ninjas franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Code Ninjas below from the most recent Item 7 below:

Type of Expenditure   Minimum Investment   Maximum Investment  
Initial Franchise Fee  $40,000  $40,000 
Lease  $7,500  $17,500 
Utility Deposit  $250  $500 
Architect Fees  $1,500  $7,500 
Construction Costs  $60,000  $200,000 
Expenses for Initial Training  $1,000  $1,500 
Business Licenses and Permits  $250  $1,000 
Business Insurance  $1,000  $2,500 
Initial Inventory  $2,500  $5,000 
Computer Hardware & Software  $5,000  $7,500 
Furniture, Fixtures, and Equipment  $15,000  $35,000 
Signage  $2,500  $10,000 
Grand Opening Marketing Program  $5,000  $5,000 
Professional Fees  $500  $2,500 
Additional Funds (3 months)  $35,000  $50,000 
Total  $177,000  $385,500 

Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.

Required Capital

For Code Ninjas, the required capital, liquid assets, and net worth can vary, but I can provide some general estimates based on industry standards for similar franchises in the education and children’s services sector.

  • Initial Investment The initial investment to open a Code Ninjas franchise typically ranges from around $177,000 to $386,000. This includes expenses such as franchise fees, leasehold improvements, equipment, and initial marketing. Assuming you can obtain financing, you should plan to invest 20% of the total investment in the form of equity (cash).
  • Liquid Assets It’s generally recommended that prospective franchisees have at least $100,000 in liquid assets. This ensures you have enough working capital to manage the business during the initial phase of operation.
  • Net Worth A minimum net worth of approximately $300,000 to $500,000 is often required by franchises in this sector. This helps to demonstrate financial stability and the ability to sustain the business long-term.

How much does a Code Ninjas franchise owner make?

Calculating the salary of a Code Ninjas franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Code Ninjas franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.

Code Ninjas Revenue & Gross Sales

Based on the most recent analysis, Code Ninjas franchises have a median gross sales of $227,553, reflecting the brand’s steady performance in the education sector. This figure highlights the growing demand for coding education and the franchise’s potential for generating consistent revenue in a niche yet expanding market.

Which key factors impact the average revenue performance of Code Ninjas franchisees?

Several factors likely contributed to the performance of Code Ninjas’ U.S. franchisee median gross sales according to the most recent data. The increasing emphasis on STEM education has driven demand for coding programs, with more parents prioritizing tech skills for their children. Code Ninjas’ game-based learning model fosters strong student engagement, leading to higher retention rates and consistent enrollments. Additionally, the franchise’s ability to adapt to digital and remote learning environments has made it an attractive option for parents seeking structured, yet flexible, educational programs. Strong brand recognition and continuous curriculum enhancements have also played a key role in maintaining competitiveness and attracting new students, thereby boosting sales performance.

Code Ninjas Franchise Operational Costs

When opening a Code Ninjas franchise, it’s crucial to understand the key ongoing operational costs to keep your business running efficiently and ensure long-term profitability. Here are the primary expenses you should consider:

  • Staffing Costs Salaries for instructors and center directors, along with costs associated with recruitment, training, and benefits, will be a significant ongoing expense.
  • Curriculum and Software Updates Regular updates to the coding curriculum and software licenses used in teaching will be a consistent cost to ensure the program remains current and engaging.
  • Lease/Rent The cost of leasing or renting the space for your Code Ninjas center is a major ongoing expense, particularly if located in a family-friendly area with high foot traffic.
  • Utilities Regular expenses for electricity, internet, and other utilities required to maintain a functional and tech-enabled environment for students.
  • Marketing and Community Engagement Local marketing efforts, including digital campaigns and community events, will be an ongoing cost to attract and retain students, ensuring a steady enrollment base.
  • Technology and Equipment Maintenance Routine maintenance and upgrades of computers, tablets, and other tech equipment used in the center are essential to keep the learning experience smooth and effective.

Careful planning and budgeting for these operational costs are crucial for the financial health and success of your Code Ninjas franchise.

Code Ninjas Franchise Fees

When operating a Code Ninjas franchise, it’s essential to understand the ongoing fees to effectively manage your business and maintain profitability. Below are the key fees you should be aware of:

  • Learning Center Royalty Fee 8.0% of Net Sales, due at the time of each transaction. This fee is a standard royalty for operating a Learning Center under the Code Ninjas brand.
  • Studio Center Royalty Fee 12.0% of Net Sales, also due at the time of each transaction. This higher fee applies to Studio Centers, reflecting the different operational scope.
  • Marketing Contribution 2.25% of Net Sales, payable at the same time as royalties. This fee contributes to the national marketing fund, but keep in mind that there may also be additional obligations for local marketing efforts.

Additionally, there might be other fees associated with running your franchise, so it’s important to review your Franchise Disclosure Document (FDD) carefully and plan your budget accordingly. Understanding and accounting for these fees will help you ensure the financial health of your franchise.

Code Ninja Franchise Earnings

The median gross sales for a Code Ninjas franchise stand at $227,553, providing a solid revenue base for owner-operators in the education sector. However, when evaluating the earnings potential, it’s crucial to consider the impact of ongoing operational costs and franchise fees, which can significantly influence net income. For owner-operators, the median earnings are estimated to be $34,133 based on industry operating profit margins, reflecting the balance between revenue generation and the costs associated with running the business.

This earnings figure highlights the importance of efficient management and cost control for franchisees. While the gross sales provide a promising outlook, owner-operators need to be strategic in managing expenses, including staffing, curriculum updates, and marketing efforts, to maximize profitability.

How to Open a Code Ninja Franchise

Becoming a Code Ninjas franchisee involves a series of well-structured steps designed to ensure you are fully prepared to launch and operate your business successfully. Here’s an overview of the process:

  1. Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
  2. Preliminary Discussion After your inquiry, you’ll engage in a preliminary discussion with a franchise representative. This conversation will cover the basics of the franchise, investment requirements, and your suitability as a potential franchisee. It’s a chance to ask questions and get a better understanding of the opportunity.
  3. Franchise Application If both parties agree to move forward, you’ll be asked to complete a formal franchise application. This application will include details about your financial status, background, and business experience. Code Ninjas will review your application to ensure you meet their criteria.
  4. Discovery Day After reviewing the FDD, you may be invited to a Discovery Day at Code Ninjas headquarters. This event allows you to meet the leadership team, tour a Code Ninjas center, and get a firsthand look at the operations. It’s also an opportunity to ask detailed questions and determine if the franchise is the right fit for you.
  5. Franchise Agreement Signing If you decide to proceed, the next step is to sign the Franchise Agreement. This legally binds you to the terms and conditions of the franchise, including the payment of initial fees. Once signed, you officially become a Code Ninjas franchisee.
  6. Training and Site Selection With the agreement in place, you’ll undergo comprehensive training provided by Code Ninjas. This training covers everything from the educational curriculum to business operations. Simultaneously, you’ll work with the franchise team to select and secure a location for your center, considering factors like visibility, accessibility, and community demographics.
  7. Build-Out and Setup Once a site is chosen, the build-out process begins. This includes designing the space according to Code Ninjas’ specifications, purchasing necessary equipment, and setting up the center. You’ll also start hiring staff and preparing for the opening.
  8. Grand Opening After completing the build-out and training, you’ll be ready to launch your Code Ninjas center. The franchise team will assist with your grand opening, helping you market the event and attract your first customers. From here, you’ll begin operations, applying what you’ve learned to run and grow your business.

This structured process ensures that you are well-prepared to succeed as a Code Ninjas franchisee, with support at every stage from inquiry to grand opening.

Pros & Cons

Pros

Growing Market Demand: Coding and STEM education are in high demand, with parents increasingly prioritizing these skills for their children. This trend positions Code Ninjas well in a growing and sustainable market.

Engaging Educational Model: The game-based learning approach is both innovative and appealing, leading to high student retention rates and a strong brand reputation among parents and kids.

Flexible Business Model: The franchise offers different center types (Learning Centers and Studio Centers), allowing for some flexibility in terms of investment and operational scale.

Community Impact: Owning a Code Ninjas franchise allows you to make a positive impact on your community by equipping kids with valuable life skills and fostering a love for learning.

Cons:

Competition in the Education Sector: The market for supplemental education is competitive, with numerous coding schools and STEM programs vying for attention, which may require extra effort in local marketing and differentiation.

Dependence on Local Market: Success can be heavily dependent on the demographics and demand in your chosen location. A less tech-savvy or lower-income community might not generate the same level of interest.

Operational Demands: Running a Code Ninjas franchise requires active involvement, particularly in managing staff, maintaining high-quality educational standards, and engaging with the community, which might be demanding for some investors.

FAQs

Who owns Code Ninjas?

  • Code Ninjas was founded by David Graham in 2016. The company is privately owned and operated by Code Ninjas, LLC. David Graham, a former software developer, and entrepreneur, created Code Ninjas to provide kids with a fun and engaging way to learn coding and STEM skills.
  • Yes, Code Ninjas is a franchise. It operates as a franchise system, allowing entrepreneurs to open and run their own Code Ninjas centers under the brand’s established model. The franchise has grown rapidly, with locations across the United States, Canada, and the United Kingdom.
  • Code Ninjas ’ biggest competitor is ID Tech, which offers tech camps and online coding programs for kids. Other alternatives include Sylvan Learning with its STEM programs, The Coder School, and Mathnasium, which, while focused on math, also emphasizes logic and problem-solving skills that are integral to coding. These alternatives offer similar educational opportunities in the STEM and coding space, each with its unique approach and curriculum.
  • Based on recent data, Code Ninjas has 270 locations in the U.S., of which 263 are franchised locations.
  • The most recent calculated 3-year failure rate of Code Ninjas was 0% in the U.S.
  • No, Code Ninjas does not provide 100% placement. The focus of Code Ninjas is on teaching kids coding and STEM skills, not on placement or job guarantees.
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