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Child Daycare Franchise and Business Opportunities

Child Daycare Industry

General Child Daycare Industry

The child daycare industry provides care for infants and young children of working families, as well as preschool instruction in preparation for kindergarten. This industry is divided into two sectors, center-based daycares and home daycares, with center based daycares generating most of the revenue. This is because home daycares typically only have one primary caregiver and therefore have a much smaller enrollment. Kindergartens and in-home nanny services are excluded from this industry. This industry has very high market fragmentation. Nevertheless, one key player to consider in this industry is Bright Horizons, which is one of the largest US based childcare providers.

Education Industry Trends

Companies in the education industry will continue to invest in digitizing their curriculum and teaching methods, as the business world comes to increasingly rely on virtual platforms to conduct their operations. The COVID-19 pandemic has only amplified the need for education to be made accessible online, and many institutions that were traditionally brick and mortar have been forced to transition to a virtual platform. Even before the pandemic, the advent of technology has been viewed as an opportunity to better facilitate student learning, and many businesses in the education industry have relied on digital tools to enrich their curriculum. A separate driving force for this trend of digitization in the education industry as a whole is the shift of the US from a manufacturing based economy to a service based economy, with more and more jobs requiring higher education. As a result, many working adults are looking to advance their education, but in a way that is flexible with their busy schedules. Institutions of the education industry that can provide this flexibility through a virtual platform have become increasingly valuable.

Key Education 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 10 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: 4,794

Child Daycare Franchise Industry Trends

From 2015-2020, the daycare industry grew by 2.4%, making it a $55 billion market. However, many operators in the daycare industry were forced to shut down due to the COVID-19 pandemic, and revenue was projected to decline by 8.1% in 2020 alone. Furthermore, additional expenses because of the pandemic cut into profits — some closed daycare centers provided at-home learning technology at no additional cost, and those that remained open were forced to spend money on cleaning facilities and protective equipment for employees. Nevertheless, the daycare industry is expected to slowly return to its previous demand as unemployment starts to recover and the population of children under the age of nine is anticipated to increase at an accelerated rate. Meanwhile, despite declines in government subsidies for social services, increases in disposable income and corporate profit will likely further demand for daycare, thus contributing to growth in the industry.

Average Education Franchise Industry Percentage Fees

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Standard Education 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 47 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 5 SBA franchise loans fully paid including interest, 1 SBA loan was unable to be paid back, or defaulted. 

*SBA Franchise Loan Data from 2010-2019

*Franchise Businesses taken into account: 955

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