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Children’s Programs Industry – Franchises and Businesses

  • Children’s Programs Industry – Franchises and Businesses
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Children's Programs Franchise & Business Opportunities

Children's Programs Industry

General Industry

Children’s Programs are typically activities and programs children can participate in after school or during the summer.These programs are popular for parents that both work full-time and would want their children to develop hobbies in extracurricular activities. Furthermore, schools are now looking for well-rounded students, not only should they excel in school but they should also be involved in other activities to be “the full package.” Many of Children’s Programs businesses overlap with Children’s Education Programs, especially because some of the sub-sectors like tutoring are also after school activities. However, businesses in the Children’s Programs industry focus outside of academics. Many of these programs involve physical activity like sports, swimming, or outdoor play. Another popular type of program uses the creative arts, teaching kids music, dance, or other types of performance. These programs are a step above what is available in schools, but more cost effective for parents compared to private lessons.

The After-School Program industry has over 230,000 open businesses in the U.S., supporting more than 1.1 million jobs and with a $22 billion market size.

Children’s Programs Industry Trends

As it is more common for both parents to enter the workforce, after school programs have space to grow. Over 10 million children and youth participate in after school programs annually, generating positive outcomes such as improved academic performance, classroom behavior, health, and nutrition.

With Covid-19, the unemployment rate sharply increased to 14.7% in April 2020. More parents were at home and therefore the demand for after school programs decreased. However, the unemployment rate has been decreasing, reaching 11.1% in June 2020. Experts predict that unemployment rate will keep decreasing with all governmental practices to protect American workers. Thus, after school programs do have the chance to keep growing and helping millions of children.

Key Children’s Programs Industry Numbers

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Paid-in-Full Rate

The Paid-in-Full Rate is when the SBA loan is fully paid off by the small business owner including interest, indicating financial strength.

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Charged Off Rate

The Charged Off Rate is the SBA loan default rate where loans have no confidence in being paid off by the small business owner.

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SBA Loan Success Ratio

For every 12 SBA loans fully paid including interest, 1 SBA loan was unable to be paid back, or defaulted. 

*SBA Loan Data from 2010-2019

*Non-Franchise Businesses taken into account: 11,769

Why Are Children’s Programs Franchises Great?

Investing in a children’s programs franchise could be a great opportunity as its core business model is easy to follow even with no past experience in running a business or in the children’s program field. Following a proven business model of a children’s franchise will give the proper support, training, and marketing materials needed to be replicated effectively.

These franchises will most likely run during after-school hours which can be a better fit for franchisees looking for something more flexible out of the typical 9 to 5 work schedule. Many business owners choose to run a franchise in children’s activity not only because of the profits, but also because it is rewarding to help these children develop and grow in a hobby or activity they may have been passionate about in the past.

How much can a Children’s Programs franchise cost? 

In our online business platform Vetted Biz, we have reviewed over 1,600 businesses and franchises. Of the businesses we have reviewed in the Children’s Programs space, we have seen a range of investment amounts start at $4,710 all the way up to $4,319,450. Much of what factors into the investment amount is what type of children’s activity it will be and how large would you want the space to be based on how many children you want to participate. Based on our research, the average royalty fee takes up 7.1% of gross revenue, and the average marketing fee is 1.9%.

Are Children’s Programs Franchises Profitable?

In the SBA analysis for the 7(a) loans disbursed from 1991-2019, franchises in children programs had a paid in full rate of 39.9% and a charged off rate of 4.2%. 

Average Children’s Programs Franchise Industry Percentage Fees

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Royalty Fee
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Stability Rate
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Marketing Fee
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Growth Rate
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Failure Rate

Standard Children’s Programs Franchise Industry Investment

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This metric is the standard industry investment amount for a single unit franchise investment in this industry. Our research and analytics team analyzed over 65 franchise concept investment breakdowns in order to calculate this figure.

0 %
Paid-in-Full Rate

The Paid-in-Full Rate is when the SBA loan is fully paid off by the franchisee including interest, indicating financial strength.

0 %
Charged Off Rate

The Charged Off Rate is the SBA loan default rate where loans have no confidence in being paid off by the franchisee.

0 :1
SBA Loan Success Ratio

For every 14 SBA franchise loans fully paid including interest, 1 SBA loan was unable to be paid back, or defaulted. 

*SBA Loan Data from 2010-2019

*Franchise Businesses taken into account: 2,411

Sample Children’s Programs Franchise Income Statement

Year 1
Base% of RevenueHigh% of Revenue
Sales$ 75,000100%$ 150,000100%
Cost of Goods Sold$ 37,50050%$ 75,00050%
Gross Profit$ 37,50050%$ 75,00050%
Expenses    
Rent$ 6,0008%$ 6,0004%
Utilities$ 2,4003%$ 2,4002%
Marketing / Advertising$ 2,4003%$ 6,0004%
Insurance$ 1,5002%$ 1,5001%
Royalties$ 6,0008%$ 12,0008%
Salaries / Wages$ 00%$ 00%
Repairs and Maintenance$ 2000%$ 2000%
All other expenses$ 3,3004%$ 3,3002%
Total Expenses$ 21,80029%$ 31,40021%
     
Owner Benefit$ 15,70021%$ 31,40029%
Net Profit Margin21% 29% 
     
Year 3
Base% of RevenueHigh% of Revenue
Sales$ 175,000100%$ 350,000100%
Cost of Goods Sold$ 87,50050%$ 175,00050%
Gross Profit$ 87,50050%$ 175,00050%
Expenses    
Rent$ 6,0003%$ 6,0002%
Utilities$ 2,4001%$ 2,4001%
Marketing / Advertising$ 2,4001%$ 6,0002%
Insurance$ 1,5001%$ 1,5000%
Royalties$ 14,0008%$ 28,0008%
Salaries / Wages$ 14,0008%$ 20,0006%
Repairs and Maintenance$ 2000%$ 2000%
All other expenses$ 3,3002%$ 3,3001%
Total Expenses$ 43,80025%$ 67,40019%
     
Owner Benefit$ 43,70025%$ 107,60019%
Net Profit Margin25% 19% 

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