Let’s see if this sounds familiar… You are not happy with your career for the typical reasons associated with a corporate job. The commute is too long. You hate your boss… I know, hate may be a little strong here. Or perhaps your company is facing layoffs, and you don’t want to be caught holding the bag. Regardless of the motivating factors, if you are looking to transition and considering a franchise opportunity you may want to think about services for kids… Here’s why.
There are hundreds of options at many different levels of investment
If this is your first business, you may prefer to keep that level of investment as low as possible. The good news is there are plenty children related franchise models that do not require traditional store front retail spaces. Examples include British Swim School which provides swimming in leased community pools or Tippi Toes which teaches dance classes in schools and recreation centers. If you like sports you can look at Soccer Stars which provides indoor and outdoor soccer programs. While these models may need to pay some rent, it’s significantly lower than renting a traditional retail space.
Lower Investment Requires = A Greater Time Commitment
Non-retail based models like the ones referenced above typically have an initial investment range of 75K to $200k for a single unit. The challenge here is they require more of your time to run them effectively. If you are working, you will need to leave your job and commit to the business on a full-time basis. In a dual income household this can be less of a problem, however, in any instance one needs to consider the financial implications. Do you have the financial resources to go without income when the business is establishing itself? This can mean setting aside an additional 6 to 12 months of living expenses in addition to the initial franchise investment.
Brick and Mortar – Semi Absentee?
For people looking for manager run businesses and keep their current job, there are plenty of options available. This can be an attractive alternative if your plan is to transition out of a corporate role. The trade-off here is money. Since we have to hire people to manage the business, the initial investment will be significantly higher. Children’s models requiring store front retail can start at $200,000 and can exceed over $1mm in total investment plus working capital. Examples of businesses here are well known brands like Mathnasium and Huntington Learning Centers which specialize in learning enrichment and tutoring services. Other types of education-based models include a preschool like Building Kidz and even fitness training models for aspiring student athletes like D1 Training.
Benefits and Risks
There are many reasons people like businesses providing services to children. The first is you are making a positive impact young people’s lives. They are also recession resistant. Parents will invest in the well-being of their kids, even in a down economy. This does not mean the sector is without risk.
There can be a lot of competition. Be sure to carefully canvass the market to make sure you are not saturated with competitors, especially tutoring models with a strong virtual/on-line presence. There are also parental expectations to consider, particularly in sports related models where Mom and Dad think their child has scholarship potential. All these aspects must be carefully evaluated. The good news is there are a ton of options available. For people who have strong leadership and customer service skills that want to make an impact in people’s lives. A franchise for children can be a great opportunity.
About the Author
Todd Weiss, CFA is a Franchise Acquisition and Development Specialist with over 15 years of experience in the franchise industry as a franchisee, franchisor and franchise consultant. He is a frequent contributor to The Franchise Journal. Contact Todd at
todd@thefranchiseconsultingcompany.com
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