New Report: Child Services Offers Recession-Resistant Franchise Opportunities

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Franchise Business Review Survey Looks at Child-Focused Franchising

Franchise owners operating child-focused businesses have survived, even thrived in the struggling economy, according to a report released today by Franchise Business Review.

The report—Child Services Franchises—looks at an array of franchise models within the child services sector to assess the franchise investment opportunity. These businesses encompass many different offerings, including tutoring and education, sports and physical development, child care, retail/resale stores, and niche services like photography and event hosting.

To compile the report, researchers at Franchise Business Review looked at more than 30 child services franchise companies, including some of the leaders in the space.

“The child services industry is never going away, as proved by our recent research,” said Franchise Business Review president and CEO Eric Stites. “Franchisors in this space have performed well over the past few years, despite the economy, and some business models—like youth sports programs—have even flourished. “

Tom Bunchman, CEO of JumpBunch, told Franchise Business Review that the client-base for his company’s exercise and activity programs has grown as a result of schools cutting physical education programs and extracurricular funding, and JumpBunch’s franchisee satisfaction has remained high throughout the recession.

Overall, Franchise Business Review reports that the children’s services market will keep growing as parents continue to seek new options to stimulate and educate their children—although some business models are more recession-resistant than others.

According to Franchise Business Review’s findings, Kiddie Academy and Primrose Schools—two national franchisors of private preschools—continued to increase their franchise units through 2009, despite the high initial investment required to open this type of business. Other simpler business models haven’t fared as well. Kinderdance, a provider of dance and motor development programs, which requires an initial investment of only $30,525, has lost 10% of its franchise units annually for the past several years. Even Sylvan Learning, perhaps the best known tutoring franchise in the U.S., was heavily impacted by the recession, especially in areas like California and Florida where several franchise units closed.

“The return on investment isn’t always equivalent to the initial amount spent. Bigger investments usually require a physical space, dozens of employees, and lots of overhead, which significantly cuts into profits, while a small home-based business might offer more from a profitability standpoint,” Stites said.

Franchise Business Review, a market research company, looks at franchise opportunities from the perspective of a franchisee candidate using both detailed company and industry research applied consistently across all franchises. While the success of any franchise investment is highly dependent on the actions and performance of the individual franchise operator, Franchise Business Review's research focuses on key metrics collected from franchise disclosure documents (FDD), management interviews, industry and competitor information, and Franchise Business Review’s own proprietary analysis.

Franchise Business Review will discuss the findings of the report (including the advantages and disadvantages of running a child-focused franchise), as well as the company’s unique methodology used to determine a franchise’s investment value in a special free webinar on June 23, 2011. To register or for more information, visit http://www.franchisebusinessreview.com.

About Franchise Business Review

Franchise Business Review is a national franchise market research firm that performs independent surveys of franchisee satisfaction and franchise buyer experiences. The firm’s services include commissioned franchise research projects, as well as industry-wide studies of franchisee satisfaction. Franchise Business Review is headquartered in Portsmouth, NH, and can be reached at (603) 433-2270.

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Molly Rowe
Franchise Business Review
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