Kiddie Academy franchise unit economics
Kiddie Academy franchisees run licensed early education academies of roughly 10,000 square feet. Across the 293 academies open two years or more, 2025 revenue averaged $2,193,815 and gross profit $534,330, which is 24.36%. The top quarter earned $1,081,579 and the worst $80,014 on rent that differs by 8.1%. So the entire gap is revenue pushed through a building that costs about the same either way.
- Primary source
- Kiddie Academy Domestic Franchising, LLC, 2026 Franchise Disclosure Document
- Items read
- Item 7 for cost to open; Item 19 for sales and any profit figure
- Population
- 315 of 363 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.
Revenue averaged $2,193,815 across 293 mature academies and gross profit $534,330. The top quarter earned $1,081,579 and the bottom quarter $80,014, and the two groups pay rent within 8.1% of each other. So the gap is entirely a question of how much revenue goes through a building that costs the same either way.
- The bottom quarter has been open 17.6 months longer than the top quarter and earns 7.4% of its gross profit. 131.41 months against 113.84, on $80,014 against $1,081,579 *, so time in business is doing the opposite of what an owner would expect.
- Rent costs $394,096 at the top and $364,402 at the bottom, on revenue 2.31 times apart. 8.1% between the two occupancy cost lines *, which makes it 12.30% of revenue for the top quarter and 26.22% for the bottom, on roughly 10,000 square feet either way.
- Every extra dollar of revenue between the two quarters carried 55.2 cents to gross profit. $1,001,565 more gross profit on $1,814,074 more revenue *, against a 24.36% margin on the revenue an average academy already has. So the next enrollment is worth well over twice what the existing ones are.
- Six academies in their second year lost $318,507 each on leases costing 53.49% of revenue. $659,233 of occupancy cost against the building up top quarter’s $213,596 *, 3.09 times the rent on 64.5% of the revenue, decided before either academy opened its doors.
- 262 signed agreements sit unbuilt against 363 open academies. 72.2% of the operating system again in the pipeline *, with 36 openings projected for the year ahead, which is 7.3 years of building at that pace.
How much does a Kiddie Academy franchise make?
The average Kiddie Academy unit reported $2,193,815 of revenue in the 2026 FDD, and the median reported $2,075,740. 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 9% 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 Kiddie Academy performers
Kiddie Academy splits its locations into groups instead of publishing one average. The best group averaged $3,203,602 a year. The worst averaged $1,389,528. Both run the same brand, on the same agreement, paying the same fees. The middle location sold $2,075,740. The average was $2,193,815. More than half the system is below the number the brand quotes.
Decided before you open
- Trade area and site.A 2.3× gap between bands is not an operating gap. Catchment, daytime population and what sits next door set the ceiling before the first customer arrives.
- Capacity, fixed at build.Locations run 10,000 square feet. What you can sell is set by the build, and the build does not change after opening.
- What you spend to open.Opening costs $590,000 to $1,010,000, a 1.7× 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.
- Lease economics.Occupancy cost ran 16.9% of sales in this filing. The rent does not fall when sales do, so the same lease is a far heavier line at the bottom of the system than at the top. That is how a weak site compounds into a weak profit line.
Live operating levers
- Wages, the dominant line.Wages take 46.5% of sales. Staff productivity, scheduling against demand hour by hour, and the balance of base pay to commission are where this is won.
- Occupancy, the line that does not flex.Rent and building costs take 16.9% of sales here. Sales per square foot and the hours the space is earning are the only two ways to move it, because the rent itself is fixed at signing.
- 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.
- Fees, and where the minimum bites.Fees run about 9.0% 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.
- The first year.This filing shows how a new location builds up, so the ramp can be underwritten from the document rather than assumed. Read two things out of it: the month sales cross the point where costs are covered, and how much cash you fund before that month arrives. Everything before break-even is paid for by you.
Context you underwrite around
- The reporting screen.315 of 363 locations are behind these figures. Locations open less than the full year, brand-owned, or not meeting the reporting criteria are excluded, as are locations under the brand’s current size standard, 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 costs, line by line
Four lines, three groups, one conclusion.
| Line | Top quarter, 73 | Middle half, 147 * | Bottom quarter, 73 | All 293 |
|---|---|---|---|---|
| Months open | 113.84 | 114.54 | 131.41 | 118.57 |
| Sales | $3,203,602 | $2,091,764 | $1,389,528 | $2,193,815 |
| Labor | $1,350,900 | $982,881 | $763,185 | $1,019,835 |
| Building costs | $394,096 | $362,145 | $364,402 | $370,668 |
| Miscellaneous | $377,027 | $258,558 | $181,927 | $268,982 |
| Gross profit | $1,081,579 | $488,180 | $80,014 | $534,330 |
| Labor as a share * | 42.17% | 46.99% | 54.92% | 46.49% |
| Building costs as a share * | 12.30% | 17.31% | 26.22% | 16.90% |
| Gross profit as a share * | 33.76% | 23.34% | 5.76% | 24.36% |
The top quarter, bottom quarter and all-academy columns are as the brand reported it; the middle-half column and every share row are marked *.
Gross profit differs 13.5 times over across a system whose revenue differs 2.3 times over. $1,081,579 against $80,014 on $3,203,602 against $1,389,528 *, because two of the four lines changes littlewith size, every point of revenue difference lands on the profit line magnified.
Labor moves 12.75 points between the ends of the system. 42.17% at the top against 54.92% at the bottom *, which is $1,350,900 against $763,185. The bottom quarter spends 43.5% less on staff and still gives up half its revenue to them. Because a classroom needs its ratio whether the room is full or half full.
The middle half looks almost exactly like the average. $2,091,764 of revenue and $488,180 of gross profit, 23.34% *, against the system’s $2,193,815 and 24.36%, so the published average describes the ordinary academy well, and the two quarters describe two different businesses.
Fewer than half the mature academies reach their own average. 131 of 293 on revenue, 45%, and 125 on gross profit, 43%. Inside the bottom quarter 46 of 73, 63%, sit above that group’s own average. Is a tightly bunched minimum with a few academies dragging it down.
The first two years
Year two is decided by the lease.
| Line | Top six | Middle ten * | Bottom six | All 22 |
|---|---|---|---|---|
| Months open | 18.51 | n/a | 17.57 | 18.96 |
| Sales | $1,909,948 | $1,504,023 | $1,232,456 | $1,540,666 |
| Labor | $892,333 | $792,720 | $724,570 | $801,301 |
| Building costs | $213,596 | $301,399 | $659,233 | $375,044 |
| Miscellaneous | $232,361 | $194,240 | $167,159 | $197,251 |
| Gross profit | $571,658 | $215,661 | −$318,507 | $167,069 |
| Building costs as a share * | 11.18% | 20.04% | 53.49% | 24.34% |
| Gross profit as a share * | 29.93% | 14.34% | −25.84% | 10.84% |
The top six, bottom six and all-22 columns are as the brand reported it. The middle-ten column and the share rows are marked *, backed out by weight and carrying the rounding in the published averages.
The gap between the best and worst building up academies is rent, by a distance. $659,233 against $213,596 is $445,637, against a revenue difference of $677,492 *, so 50.1% of the $890,165 profit gap between the two groups was signed into a lease before either opened.
A second-year academy at 53.49% occupancy cost gives up more than half its revenue to the landlord. $659,233 on $1,232,456 *, and with labor at 58.79% on top, the two lines alone reach 112.28% of revenue.
The best building up academies out-earn the mature system on margin at 18.5 months. 29.93% of revenue against 24.36% for all 293 mature academies *, on rent of 11.18% against 16.90%. The highest-selling evidence here that the lease sets the ceiling.
An average building up academy already bills 70.2% of a mature one. $1,540,666 against $2,193,815 *, on 31.3% of the gross profit, so revenue arrives well before margin does. The second year is where the cost lines decide the outcome.
Rent is rent
The occupancy cost what it costs.
| Group | Revenue a square foot * | Building costs a square foot * | Gross profit a square foot * |
|---|---|---|---|
| Top quarter, mature | $320.36 | $39.41 | $108.16 |
| All mature | $219.38 | $37.07 | $53.43 |
| building up, all 22 | $154.07 | $37.50 | $16.71 |
| Bottom quarter, mature | $138.95 | $36.44 | $8.00 |
Every figure here is marked *, dividing the filed averages by the 10,000 square feet a typical academy occupies.
Building costs is within $2.97 a square foot across the entire system. $39.41 at the top against $36.44 at the bottom *, so the bottom quarter is paying almost exactly what the top quarter pays for the same room and filling it with 43.4% of the revenue.
Moving the bottom quarter to the top quarter’s rent share would multiply its gross profit 3.42 times. Building costs at 12.30% of $1,389,528 is $170,935 against $364,402, a saving of $193,467, which takes gross profit from $80,014 to $273,481 *, and the only routes to that are a cheaper lease or more revenue in the same one.
Revenue a square foot is where the system actually differs. $320.36 at the top against $138.95 at the bottom *, a gap of $181.41 a foot, which on a 10,000 foot academy is $1,814,074 a year, or $34,886 a week of tuition.
Gross profit a square foot runs 13.5 times across the system. $108.16 against $8.00 *. The bottom quarter turns a whole year and 10,000 square feet into $80,014. That is what an academy earns when rent and staffing ratios meet a half-filled building.
Fees and what it costs to open
9% of revenue, and a building to find.
| Route | Total investment | Against mature revenue * | Years of mature gross profit * |
|---|---|---|---|
| Leased facility | $590,000 to $1,010,000 | 0.27 to 0.46 times | 1.1 to 1.9 years |
| Purchased facility | $4,935,000 to $8,530,000 | 2.25 to 3.89 times | 9.2 to 16.0 years |
Totals are as the brand reported it; the two right-hand columns are marked. Measured against the $2,193,815 of revenue and $534,330 of gross profit an average mature academy produced.
| Fee | Rate | At the mature average * | At the bottom quarter * |
|---|---|---|---|
| Royalty | 7% of gross revenues | $153,567 | $97,267 |
| Brand Building Fund | 2% of gross revenues | $43,876 | $27,791 |
| Total | 9% | $197,443 | $125,058 |
Rates are as the brand reported it; the dollar columns are marked *.
| Year | Franchised at start | Opened | Exits | Transfers | Franchised at end | Openings as a share of start * |
|---|---|---|---|---|---|---|
| 2023 | 305 | 23 | 2 | 6 | 326 | 7.5% |
| 2024 | 326 | 22 | 4 | 15 | 344 | 6.7% |
| 2025 | 344 | 23 | 4 | 18 | 363 | 6.7% |
Counts are as the brand reported it; the right-hand column is marked *.
The system grew 19.0% in three years and its transfer count tripled. 305 to 363 franchised academies, on transfers of 6, then 15, then 18 *. The 2025 figure is 5.2% of the academies open at the start of that year changing hands.
The pipeline is 7.3 years deep at the projected build rate. 262 signed agreements against 36 projected openings *, and at the 23 academies actually opened in 2025 it is 11.4 years.
Franchise fees take 9% of revenue, which is 37.0% of what an average academy keeps as gross profit. $197,443 against $534,330 *, and at the bottom quarter the same 9%, $125,058, is 156.3% of that group’s $80,014.
Buying the occupancy cost 8.4 times what leasing one does at the low end. $4,935,000 against $590,000 *. The trade is 16 years of gross profit at the top of the purchased range against under two at the leased one, in exchange for owning the asset that the bottom quarter’s numbers suggest matters most.
Questions we get asked
Questions owners ask.
What does a Kiddie Academy earn?
The 293 academies open 24 months or more averaged $2,193,815 of revenue in 2025 and $534,330 of gross profit, which is 24.36%. The median was $2,075,740 and $479,211. The top quarter by gross profit averaged $3,203,602 and $1,081,579; the bottom quarter $1,389,528 and $80,014.
Is that a profit figure?
It sits above one. Gross profit here means revenue less labor, occupancy cost and miscellaneous costs only. Other revenue such as state and federal funds and grants. Other costs including supplies, food and insurance premiums, fall outside it. So does debt service on the building.
Where does the money go?
Labor takes 46.49% of revenue at the average academy, occupancy cost 16.90% and miscellaneous 12.26%. Miscellaneous has the 9% of revenue that goes to the brand. So the 7% royalty and 2% brand building fee are roughly three quarters of that line.
Why is the bottom quarter so far behind?
Revenue. It bills $1,389,528 against the top quarter’s $3,203,602 while paying $364,402 of rent against $394,096, within 8.1% for what is typically the same 10,000 square feet. Rent at 26.22% of revenue against 12.30% is the single widest cost gap in the system.
Does the business improve with age?
The numbers point the other way. The bottom quarter averages 131.41 months open against the top quarter’s 113.84, so the lowest-selling group has been trading 17.6 months longer than the highest-selling one.
What happens in the first two years?
The 22 academies open under 24 months averaged $1,540,666 of revenue and $167,069 of gross profit. Within that group the best six reached 29.93% margin on rent of 11.18% of revenue. Meanwhile the worst six lost $318,507 each on rent of 53.49%.
What does it cost to open?
$590,000 to $1,010,000 for a leased facility and $4,935,000 to $8,530,000 to purchase and build one. The initial fee is $150,000 paid in four installments, with reduced-fee programs taking it as low as $70,000.
- No profit figure. The filing reports sales and not earnings, so what an owner keeps is not disclosed.
Questions worth putting to Kiddie Academy
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 Kiddie Academy 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 →What share of your revenue goes to the building?
A structured review of your unit economics, cash forecast. Reporting, built around occupancy cost against the system’s 16.90%, labor against 46.49%, and revenue a square foot against $219.38.
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
Kiddie Academy reads against the rest of the early education and child care group: Celebree School · Lightbridge Academy · Primrose Schools · Soccer Shots · The Goddard School · The Learning Experience. The early education and child care 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.
- What does this location earn on the money I put into it?Payback period and cash-on-cash return for one unit.
- How much of Item 19 can I rely on?What a financial performance representation does and does not tell you.