How to Open a Childcare Franchise: Some Common Franchise Terms

When it comes to how to open a childcare franchise, there are plenty of smart reasons to do so with a brand like Children’s Lighthouse, including our time-tested business model, respected brand name, our training and support, and much more. But as you continue to learn about the world of franchising, you might be confused by some of its terminology and language, a lot of which is quite unique. Here, let’s look at a few common franchise terms you’ll come across as you move forward in your journey, what they mean, and why they’re important.

Franchisor

Put simply, a franchisor is a brand that’s offering an investment opportunity to potential franchisees. But in reality, a good franchisor is much more than that! It’s the people behind the brand who really determine the strength of a franchisor because those people will be the ones you’ll turn to for ongoing guidance, resources, and support. They’ll also be the ones who make sure you’re well trained and ready to open your preschool. The training and support we provide are very much a part of how to open a childcare franchise with Children’s Lighthouse, so we make sure it’s comprehensive and ongoing.

Franchise Fee

A franchise fee is the one-time lump sum you’ll pay to become part of a brand family. All franchisors charge a franchise fee, payable upon the signing of a franchise agreement, and when you open a childcare franchise with Children’s Lighthouse, you can expect to pay approximately $30,000. This fee is one of the most affordable in the industry and covers the cost of your onboarding and pre-opening training. It also grants you access to our proprietary materials, logos, and resources, as well as gives you the right to do business under the recognized and respected Children’s Lighthouse name.

Start-up Costs

Opening any new business requires an investment of not only time and effort but of money as well. Start-up costs, sometimes called an initial investment, refer to the total financial investment you’ll need to make in our early learning center opportunity in order to get your preschool up and running. This sum will always include expenditures like inventory, leases or real estate purchases, insurance and utilities, and your franchise fee.

Royalties

Royalties are the monthly fees collected by the franchisor against your gross receipts. Among other things, this money is used to fund the ongoing support we provide you, research and development, marketing, and more. Children’s Lighthouse charges a monthly 7% royalty fee and a .5% monthly advertising fee.

Franchise Agreement

A franchise agreement, sometimes called a franchise contract, is the document you sign before paying your franchise fee that includes the rights, responsibilities, and obligations of the franchisor and franchisee. It will also spell out your territory if any, what kind of training and support you can expect, and under what conditions you can sell your franchise, among other important information.

Still, have questions about starting a childcare franchise with Children’s Lighthouse? We’d love to hear from you, so don’t hesitate to reach out!