Childcare Franchise Opportunities in the United States of America

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Childcare Franchise Industry Overview

On a global scale, daycare centers, childcare centers, and generally the daycare industry providing different types of childcare and school programs around the world are expected to reach a whopping $415.96 billion by 2026. That’s just three years away and this makes sense because the number of dual-income households is rising globally, with parents looking for ways to have their children taken care of while they are at work. 

Looking more locally at the US in particular, the above projections are expected to see the early childhood education industry reach $73.8 billion by 2027. This is significantly higher than the $18-billion valuation of the industry in 2020. Currently, the industry’s value is around $60.8 billion, with significant levels of growth expected over the next few years.

There are around 47 million children under the age of 12 in the US and 20 million children under the age of five. Meanwhile, in 2019 alone, there were 1.4 million and 3.7 million students enrolled in pre-kindergarten and kindergarten, respectively, signaling high demand. By 2050, it’s expected that the under-five-year-old population will hit 30 million.

As for the size and scope of the child daycare industry in the US, we see that there are over 800,000 such businesses that employ over 1.5 million people. Furthermore, the daycare and early education segment have a 46% market share of child care businesses in the US.

It’s worth noting that the industry is generally defined by small and large players. On the smaller front, we see independent child care centers but these smaller facilities saw unsustainable growth between 2005 and 2017, with over 97,000 of them shutting down during this period. On the larger scale of the equation, we have predominantly franchise businesses, which have larger facilities, can provide more variety, and cater to a larger number of children. These childcare franchise opportunities have therefore experienced more success than their smaller counterparts. 

Meanwhile, the Covid-19 pandemic also influenced the direction of the industry with 25% of parents taking their children out of daycare or childcare due to safety concerns. Today, however, growth is steady and demand is high. This is partially driven by the fact that childcare franchises and businesses in general are useful for promoting early learning and many of these so-called learning centers better equip children for academic success later on in their academic careers.

Childcare Industry Trends in 2023

For those who love to work with children and at the same time are looking for a profitable business opportunity, then childcare franchise opportunities are worth considering. However, it’s also important to bear in mind that daycare franchises and the industry in general are undergoing some significant transformations due to some trends in the industry. Among these include the following:

  • Digital communication with parents is becoming increasingly important. Parents want to feel connected to their children and teachers or caregivers and prefer to receive regular updates. Streaming activities are also important for parents to see how their children are getting on. As such, this is an important way to encourage customer retention in the industry. 
  • Technology’s impact is also felt in the day-to-day running of childcare franchises. Whether it’s related to billing, enrollments, tracking attendance, or something else, the right management system can help reduce a franchisee’s workload by as much as 50 hours per month. 
  • When it comes to the children themselves, there is a growing shift back towards more time spent on play as its importance in children’s development is increasingly being recognized. 

Why you should consider a childcare franchise opportunity

The benefits of choosing franchise opportunities are well documented but what about childcare franchise opportunities? Below, we outline some of the more important advantages you can enjoy when you purchase a childcare franchise for sale.

  • For those who enjoy working with kids, this is an ideal opportunity to spend time with them on a daily basis. As such, work will rarely feel like work. Instead, you’ll be focusing on play and skill development. This enables you to play a significant role in shaping the next generation. It’s also a good way of ensuring that no two of your work days are ever the same. 
  • Another benefit of working for yourself through a childcare franchise is that setting up and getting up and running is usually pretty quick. The reasons behind this are that the franchise models are, in most cases, well developed, giving you all the tools, training, and resources you need to get started. 
  • And speaking of business models, you’ll gain full access to a proven business model of your chosen franchisor’s childcare business, enabling you to provide high-quality childcare services.
  • The industry is resilient and demand for services is high and expected to continue growing. 
  • Some franchisors offer a tiered royalty structure.
  • You’ll get help with the construction of your site. 
  • You’ll be a part of a wider, supportive network of like-minded franchisees who can help you as you begin to learn the ropes. This, together with the franchisor’s support, means you will never be alone.
  • In many cases, no previous experience or educational qualifications are required for you to start a childcare franchise
  • You will get access to a proprietary curriculum that’s often based on the latest research and national accreditation standards. 
  • Of course, there is also instant name and brand recognition, with larger childcare franchises often taking a large portion of the pie when it comes to the industry as a whole due to their reputation for quality services.
  • Marketing support is another area that you do not have to feel alone in, together with business operations support. 

How much does it cost to open a childcare franchise business?

And now, we get to the numbers. Of course, you will want to know what the royalty fee and the

initial franchise fee will be for your childcare franchise. It is important that you know that every franchisor’s fees will differ from each other and factors such as location, site build, inventory, equipment, inspections, licensing fees, real estate costs, supplies, and more will play an important role in determining your total cost. 

However, with that being said, it’s worth noting that on the lower-end of the spectrum, you are looking at an initial franchise fee starting from $10,000 while on the higher-end of the spectrum, you are looking at startup costs in excess of $1 million. On average, you can expect to make between $30,000 and $40,000 in profits per year, although once again, this can vary depending on which areas you serve as well as how many children you have in your care.

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