Challenge Island franchise unit economics
Challenge Island franchisees run a mobile children’s STEAM business delivering classes, camps, field trips and parties inside schools, preschools and parks departments, in a territory of roughly 30 elementary schools. Across 50 full-time franchisees the 2025 average was $80,569 with a median of $60,411. A single territory produced $62,486 while a second one added just $30,908, and the brand’s fixed minimums come to $9,800 a year whatever you bill.
- Primary source
- Challenge Island Global, LLC, 2026 Franchise Disclosure Document
- Items read
- Items 5 and 6 for fees; Item 19 for sales and any profit figure; Item 20 for the location count
- Population
- 60 of 170 locations
- Our calculations
- Marked on the page with an asterisk. Method
- Last reviewed
- 26 September 2026
Disclosure-based. Not a forecast, not an offer to sell a franchise, and not advice.
Two numbers decide this business. The brand’s minimums come to $9,800 a year (a $500 monthly royalty minimum, a $150 monthly marketing minimum and $500 a quarter of local spend) and the average full-time franchisee bills $80,569, which sits below the $85,714 where 7% would overtake the minimum. And a second territory adds $30,908 against a first that produced $62,486.
- Most of this system pays a minimum. $9,800 a year of fixed brand charges against a 7% royalty crossover at $85,714 and a 2% marketing crossover at $90,000 *, and the full-time average is $80,569.
- The second territory earns half what the first one did. $30,908 added against $62,486 produced, and it costs $39,900 *, so the payback on buying territory is 1.3 years before any cost of working it.
- The bottom quarter pays 41.6% of revenue to the brand. $9,800 of minimums on $23,578 of sales *, against 10.1% in the top quarter, which is what fixed minimums do to a small business.
- A territory of about 6,000 children produces $54,301. Roughly 30 schools of 200 students, so $9.05 a child and $1,810 a school *, the cleanest yardstick for judging a territory before buying one.
- Twenty-three of 93 franchisees withheld their figures entirely. 24.7% of the system, alongside 3 that ceased and 7 under a year old *, so a third of this system sits outside what follows.
How much does a Challenge Island franchise make?
The average Challenge Island unit reported $80,569 of revenue in the 2026 FDD, and the median reported $60,411. The brand’s disclosure document discloses revenue and not profit, so what an owner keeps depends on the cost structure set out below. Fees come off the top first, at about 12.2% of sales across royalty, brand fund and the rest of the stack. Revenue is not income. Rent, wages, cost of goods and the franchise fees all come out before an owner is paid. The figures for the highest-selling and lowest-selling businesses are below.
Top performers
What separates the top Challenge Island performers
Challenge Island splits its locations into groups instead of publishing one average. The best group averaged $184,332 a year. The worst averaged $23,578. Both run the same brand, on the same agreement, paying the same fees. The middle location sold $60,411. The average was $80,569. More than half the system is below the number the brand quotes.
Decided before you open
- Trade area and site.A 7.8× gap between bands is not an operating gap. Catchment, daytime population and what sits next door set the ceiling before the first customer arrives.
- Territory, and how much of it is real.This model sells from a territory rather than a building. Two owners with the same brand and different ground are running different businesses, and density decides how much driving sits between jobs.
- What you spend to open.Opening costs $58,465 to $74,050, a 1.3× range inside one brand. The high end usually buys more capacity, so the cheapest build is not always the cheapest route to the top band.
Live operating levers
- Enrolment, the operating driver.This model bills on enrolment. The licence fixes how many places exist, so what is left is how many are filled, what each is priced at, and how long a family stays. It is worth watching every week, because by the time it turns up in a monthly close the quarter is half gone.
- Membership and rebooking.A recurring plan turns a high-fixed-cost business from an appointment book into a subscription, which smooths the utilisation that drives the wage line. Rebooking before the customer leaves is what builds it, not marketing spend afterwards.
- Fees, and where the minimum bites.Fees run about 12.2% of sales. A minimum sits underneath the percentage, so the low-volume location pays the higher effective rate. The brand charges the weakest locations the most. Work out the sales level where the percentage overtakes the minimum and know which side of it you are on, because the answer changes what an extra dollar of sales is worth.
Context you underwrite around
- The reporting screen.60 of 170 locations are behind these figures. Locations open less than the full year, brand-owned, or not meeting the reporting criteria are excluded, so the numbers describe locations that cleared that screen, not the system as a whole.
- What the disclosure leaves out.Item 19 publishes no profit or cost data for franchised locations. Anything below the sales line has to come from the franchisor or from owners you call.
The top quarter against the bottom
Eight times between the top quarter and the bottom.
| Group | Franchisees | Territories | Average | Median | High | Low | At or above average |
|---|---|---|---|---|---|---|---|
| Top 25% | 12 | 25 | $184,332 | $193,233 | $268,189 | $114,125 | 6 (50%) |
| Top 50% | 25 | 44 | $128,106 | $112,930 | $268,189 | $61,320 | 9 (36%) |
| Middle 50% | 25 | 33 | $60,397 | $61,320 | $112,930 | $30,952 | 13 (52%) |
| Bottom 50% | 25 | 30 | $33,031 | $30,772 | $59,501 | $16,300 | 11 (44%) |
| Bottom 25% | 13 | 15 | $23,578 | $24,060 | $30,772 | $16,300 | 7 (54%) |
Every figure is as the brand reported it for the 50 full-time franchisees who met the reporting requirements during 2025.
The top quarter bills 7.8 times the bottom quarter. $184,332 against $23,578 *, and the highest-selling franchisees at $268,189 bills 16.5 times the lowest-selling at $16,300.
The top quarter holds 25 territories between 12 franchisees and the bottom quarter 15 between 13. 2.08 territories each against 1.15 *, so the highest-selling operators do hold more ground, though per territory they earn $88,479 against $20,434.
The median full-time franchisee bills 75% of the average. $60,411 against $80,569 *, with 17 of 50 reaching that average, so the mean is pulled hard by the top quarter.
Adding part-time franchisees pulls the system average down to $71,104. Ten part-timers holding 31 territories average about $23,779 between them *, roughly $7,671 a territory, which is what a side business produces here.
Each quarter has roughly half its members above its own average. Between 36% and 54%, the shape of tightly packed groups.
The minimum most people pay
Nine thousand eight hundred dollars, whatever you bill.
| Charge | Rate | Top 25% | All full-time | All 60 | Bottom 25% |
|---|---|---|---|---|---|
| Revenue | n/a | $184,332 | $80,569 | $71,104 | $23,578 |
| Royalty | 7% or $500 a month | $12,903 | $6,000 | $6,000 | $6,000 |
| Marketing fund | 2% or $150 a month | $3,687 | $1,800 | $1,800 | $1,800 |
| Local marketing | $500 a quarter | $2,000 | $2,000 | $2,000 | $2,000 |
| Total | n/a | $18,590 | $9,800 | $9,800 | $9,800 |
| Share of revenue | n/a | 10.1% | 12.2% | 13.8% | 41.6% |
The rates and minimums are as the brand reported it and the annual dollar figures apply them to each group's filed revenue, marked *.
The 7% royalty overtakes its $500 monthly minimum at $85,714. And the 2% marketing fund overtakes its $150 minimum at $90,000 *, both above the full-time average of $80,569, so the typical franchisee here pays a fixed amount.
The minimum costs the bottom quarter of all reporting franchisees 68.1% of revenue. $9,800 on $14,397 *, which is the arithmetic behind why the smallest operators in this system struggle to reach profitability at all.
The minimum arrives only after the first six months. Royalty and the marketing fund are discounted to zero during the initial period, then run at $400 a month through year three and $500 after. So year one is cheaper by $1,200 than year four.
Selling outside your area can add a further 5%. If extraterritorial sales reach a quarter of average monthly sales and you decline to buy another franchise. At the top quarter’s revenue would take the royalty to 12% on that portion.
Liquidated damages on default are 24 months of average royalty. Or the months remaining if fewer, with a minimum of $500 a month, so walking away from a failing territory has a minimum of $12,000.
What a second territory adds
Each territory you add earns less than the one before.
| Territories held | Franchisees | Territories | Average revenue | Median | Per territory * |
|---|---|---|---|---|---|
| One | 31 | 31 | $62,486 | $43,892 | $62,486 |
| Two | 16 | 32 | $93,394 | $83,921 | $46,697 |
| Three | 1 | 3 | $114,125 | $114,125 | $38,042 |
| Four | 2 | 8 | $241,477 | $241,477 | $60,369 |
| All full-time | 50 | 74 | $80,569 | $60,411 | $54,301 |
The franchisee counts, territory counts and revenue figures are as the brand reported it and the per-territory column divides total group revenue by group territories, marked *.
Going from one territory to two adds $30,908 of revenue for $39,900 of fee. *, a payback of 1.3 years on revenue alone, and longer once the cost of actually working the second area is counted.
Per-territory revenue falls from $62,486 to $46,697 to $38,042 as territories accumulate. *, and the four-territory group recovers to $60,369 only because both of its members sit in the top quarter of the system.
Across all reporting franchisees the pattern is starker. $57,803 a territory at one, $41,976 at two, $15,208 at three and $13,232 for the single franchisee holding ten *, so territory count alone predicts very little about revenue.
A territory is roughly 30 elementary schools of 200 students. About 6,000 children, producing $54,301 across a full-time franchisee’s territories, $9.05 a child and $1,810 a school *.
The territory is drawn on school count alone. A series of contiguous zip codes containing about 30 schools, with income, funding and enrollment size acknowledged as varying. So two territories of identical size can differ widely on what they can sell.
What it costs to open, and the network
A sixty-thousand-dollar start and a system still adding territories.
| Year | Start | Opened | Terminated | Ceased, other | End |
|---|---|---|---|---|---|
| 2023 | 129 | 15 | 0 | 1 | 143 |
| 2024 | 143 | 22 | 4 | 0 | 161 |
| 2025 | 161 | 9 | 0 | 0 | 170 |
Every column is as the brand reported it and each year's arithmetic returns the filed closing count exactly.
A start costs $58,465 to $74,050, of which $49,900 is the fee itself. 0.73 to 0.92 times what a full-time franchisee bills in a year *, so the entry cost here is almost entirely the franchise.
Additional funds of $4,000 to $10,000 cover three months. Against $9,800 a year of brand minimums, which means the working capital allowance is roughly one year of minimum brand charges at the low end.
A second territory bought at signing costs $34,900 and bought later costs $39,900. A $5,000 difference for committing up front, and educators and veterans each take 10% off the first fee, to $44,910.
The system added 46 territories and lost 5 across three years. 129 to 170, with company-owned territories flat at 7, though openings fell from 22 in 2024 to 9 in 2025.
A transfer costs the buyer $6,735 or 15% of the then-current fee, whichever is larger. And a renewal costs $5,000 or 10%, with the protected area open to modification at renewal. Is the one point in the term when the ground under you can move.
Questions we get asked
Questions an owner asks.
What does a Challenge Island franchisee bill?
Across 50 full-time franchisees holding 74 territories, the 2025 average was $80,569 and the median $60,411, with 17 of 50 reaching the average. The highest-selling billed $268,189 and the lowest-selling $16,300. Including ten part-timers, the 60 reporting franchisees averaged $71,104.
What does a single territory produce?
$62,486 for a full-time franchisee holding one, and $54,301 per territory across all full-time franchisees. A territory is roughly 30 elementary schools of 200 students each, so about 6,000 children, $9.05 a child and $1,810 a school, on our reading.
Is buying a second territory worth it?
On these figures, marginally. Two-territory franchisees average $93,394 against a single territory's $62,486, so the second adds $30,908 for a fee of $39,900. Per-territory revenue falls to $46,697 at two and $38,042 at three, so the added ground is worked less intensively than the first.
What does the brand take?
7% of gross sales or $500 a month, whichever is greater. 2% or $150 a month to the marketing fund. At least $500 a quarter of local marketing. On our reading that is $9,800 a year for anyone below the crossovers of $85,714 and $90,000, which is most of this system. Royalty and marketing are waived for the first six months.
Why do the minimums matter so much?
Because they land the same on everyone. $9,800 is 10.1% of a top-quarter franchisee's revenue and 41.6% of a bottom-quarter one's. Among all reporting franchisees the bottom quarter averages $14,397, where the minimums reach 68.1%.
What does a start cost?
$58,465 to $74,050, of which the $49,900 initial fee is the bulk. This is a mobile business that runs without a site, so equipment is $0 to $1,500 and supplies $500 to $1,000. Additional funds of $4,000 to $10,000 cover three months. Educators and veterans pay $44,910.
What territory protection do you get?
A protected area of contiguous zip codes containing about 30 schools. Inside it the brand keeps every other Challenge Island business out while you stay in compliance. An exclusive territory is expressly excluded, and the brand keeps other channels, other marks and expansion rights. Zero sales quota applies, and the area may be modified at renewal.
Which two numbers should run monthly?
Gross sales against $7,143 a month, because that is where 7% overtakes the $500 minimum royalty and the brand charge stops being fixed. And revenue per territory against $54,301, because it is the figure that decides whether buying more ground beats working the ground you have.
- No profit figure. The filing reports sales and not earnings, so what an owner keeps is not disclosed.
- No cost lines. Wages, rent and cost of goods are not broken out, so margin cannot be rebuilt from the document.
Questions worth putting to Challenge Island
The filing answers what it answers. These are the gaps an owner or a buyer should close directly.
- What do locations at the median spend on wages and rent as a share of sales? The filing reports sales only.
- What separates the highest-selling locations from the lowest: trade area, years open, size, or the owner?
- How long does a new location take to reach the average you publish, and what does the build-up look like month by month?
- At what level of sales do the minimum charges stop applying and the percentage take over?
- How many Challenge Island locations closed, were sold, or changed hands last year, and why?
Run your own numbers.
The Franchise Finance Diagnostic runs the same checks on your own numbers. It scores where you stand and compares you with Item 19 of your brand’s FDD. It works out what one location earns and spends, and builds a 13-week cash forecast. Checks whether you are ready to open another one. It is free and it runs in your browser.
Launch the diagnostic →Is your second territory earning its fee?
A structured review of your unit economics, cash forecast. Reporting, built around $54,301 a territory, the $9,800 of brand minimums that apply whatever you bill. The $85,714 where a percentage finally takes over from a minimum.
Request the reviewthe franchise library, all 243 brands · how franchise unit economics work · running the books across several locations · what Averan does for franchise owners
Challenge Island reads against the rest of the stem and coding group: Bricks 4 Kidz · Code Ninjas · Engineering For Kids · Snapology. The stem and coding guide compares all of them on the same figures.
Questions owners ask next
The figures above raise these, and each one is answered on its own page.
- At what level of sales does a minimum fee stop costing me more than the percentage?How royalty, ad fund and minimums actually work on a monthly statement.
- How much cash do I fund before a new location covers its own costs?A 13-week forecast for the months before break-even.
- My payroll percentage keeps climbing. Is that a payroll problem?Usually it is a revenue problem wearing a payroll costume.
- Revenue was the highest it has been. Why did profit not move?Where the extra revenue went, line by line.
- At what point do spreadsheets stop coping?What changes at around ten units, and why lenders care.