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Child care is a booming industry in the United States. With more and more parents working, getting a reliable child care facility for your children is important. Choosing the right early childcare franchise means you can be assured of a healthy learning environment with safety, education, and food nutritious enough to support your children’s growth.
According to the recent Bureau of Labour Statistics report, 62% of the families in the United States have both parents employed, which is more than ever before. It means that an estimated 12.5 million children under four years of age get enrolled in some child care institute in a year.
Primrose School Franchise is the premier early education and care franchise in the United States. With over 450 independently-owned schools in 33 states and Washington D.C., each Primrose school is committed to helping children build the proper foundation for future learning and life.
The Primrose schools franchise owner has to face the big challenge throughout; to begin with, the hassle is of finding the right people to work for them. The staff has to be adequately trained and monitored at all times. Still, the Primrose school franchise has a high attrition rate, management not being efficient enough, and an unorganized school structure.
The primrose franchise is also a costly investment. Apart from initial franchise fees of $80,000 and license fees, there are 7% royalty fees and 2% ad fees that a franchise has to pay, which takes a large portion of the schools’ income.
If you are looking for low-cost franchise opportunities, then this industry will not fit your needs.
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Primrose: An Insight Into The Business Of Early Education
Primrose School Franchise Co. is a licensed educational and child care facility that provides year-long programs for children from 6 weeks to 6 years. The company facilitates educational programs, daycare, and summer programs for approx 60,000 children in the United States. Founded in 1982 and franchised since 1983, it is present in 32 states with 454 units in operation.
The Primrose schools are either independently owned or operated by franchises provided a “Balanced learning” program by the company developed for early childhood education.
Primrose Schools Franchise Cost:
Initial franchise Fee: $80,000
Liquid Capital: $350,000 – 1,200,000
Net Worth: qualified750,000 – $ 1,20,000
Total Investment: $637,900 – 6,375,000
Royalty Fee: 7%
Ad Royalty Fee- 2%
Though the average earning of the franchise owner is mentioned in item 19 in the FDD document, to evaluate the accurate profit of Primrose School franchise owners, watch the video below, which gives you the potential financial model of how much profit is earned by any franchise owners after making investments and operating costs.
Problems With The Primrose School Franchise Investment:
Before venturing into the Primrose education and aftercare business, you must consider the many pain points of running a daycare facility for young children. The education business is not an investment for purely profit-making, and unless you have the passion for this work, it could become a big challenge for you.
One of the problems that many people face with childcare franchises is absentee owners. There are many regulations and certifications in this industry because you care for small children, so you need to be careful with your staff.
We have researched through various portals and taken feedbacks from industry insiders to bring to your notice the many challenges faced by franchises in this industry:
#1 Hiring And Training of Good Staff Is Always A Challenge In This work:
The working of a preschool and daycare is mainly dependent on its teaching as well as non-teaching staff. Hiring and training good staff is one of the biggest challenges of running this school franchise. Also, training the staff in new methodologies, as followed by Primrose, is a time-consuming and expensive process.
Like many other preschools like Kiddie Academy, Primrose faces a high attrition rate among its teaching staff, adding to the cost involved in t training and hiring process.
#2 Many fees and Royalties Charged By Primrose:
The Primrose franchise is a heavy investment opportunity and has to be taken only after much due diligence. Other than the initial investment for the franchise, there is a substantial cost to leasing or developing real estate for the preschool. The franchise owner’s profit is highly regulated in child schooling and is not even at par with the average annual income in the U.S. The ROI on this investment is low; hence new aspiring entrepreneurs can consider the fast-casual restaurant franchise options for high returns on investment.
Also, an 18% SBA default rate on a business acquisition loan might be a red flag, but there are other reasons for defaulting on a business acquisition loan. We recommend you do your homework thoroughly before investing.
#3 Common Goodwill Of Educational Institute:
The Educational institute franchise understands that a negative review with one franchisee will affect all the other franchises. In this business, which is very sensitive to negative publicity, they have no choice but to let go of the employee or shut the franchise. For instance, when one of the Primerose franchise owners in Ohio was accused of the rape case against 13 yr old, all other Primrose franchise owners had to suffer the repercussions.
The future in this industry always carries more risk than businesses like QSR, Hotel, Finance.
#4 Dissatisfied Staff and High Attrition Rate:
Primrose School’s existing franchise employees have voiced their concerns about being paid low wages, which has resulted in high employee turnover and difficulty in understaffing. According to reviews, this problem has led to low-quality care for children. The company has difficulty finding qualified staff to work for them, which is the basis of running a good child care facility.
Conclusion:
Besides the reasons mentioned above, the preschool and daycare industry has many more pain areas that must be dealt with in its everyday work.
Make sure you carefully consider the various expenses and requirements of a daycare center and have access to suitable staff before you think of venturing into the Primrose School franchise opportunity.
Sources:
https://www.franchisegator.com/franchises/primrose-schools/
https://www.entrepreneur.com/franchises/primroseschools/282721
https://franchise.primroseschools.com/opportunity
https://www.glassdoor.co.in/Reviews/Primrose-Schools-daycare-Reviews-EI_IE230525.0,16_KH17,24.htm
https://www.footprintseducation.in/blog/why-pre-school-franchisees-fail/