Primrose Schools franchise unit economics
Primrose Schools franchisees run premium early-education and child-care facilities licensed for about 186 children, and the economics turn on how many of those places are filled. Across 357 schools reporting rent, profit runs from 21.6% of revenue at 94% occupancy cost down to 8.2% at 53%, on revenue of $3,557,271 against $1,956,524. Rent changes littlebetween the two ($338,305 against $326,603) so each extra point of occupancy cost has about $14,860 straight to the line.
- Primary source
- Primrose School Franchising SPE, LLC, 2026 Franchise Disclosure Document
- Items read
- Items 5 and 6 for fees; Item 7 for cost to open; Item 19 for sales and any profit figure
- Population
- 520 of 557 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.
Between the bottom and top occupancy cost quartiles, revenue rises $1,600,747 and rent rises $11,702. That is the whole model in two figures: a building priced for a full house, earning whatever the enrollment list says it earns. Each point of occupancy cost has $39,043 of revenue and $14,860 of profit.
- One point of occupancy cost is worth $14,860 of profit. Revenue rises $39,043 a point between the bottom and top quartiles and profit $14,860 *, 38 cents in the dollar, or roughly $7,979 a year for each additional child enrolled.
- Revenue per enrolled child holds between $18,973 and $20,623 across all four quartiles. An 8.7% range * against revenue that runs 87.8% apart.
- Rent costs the top quartile $338,305 and the bottom $326,603. $11,702 apart on revenue $1,600,747 apart, which costs rent from 9.5% to 16.7% of sales and widens the distance between EBITDAR and profit from 9.2 points to 17.1.
- 192 extra pre-registrations are worth $873,384 in the first year and still $726,755 three years on. 83.2% of the opening gap survives *, about $3,785 a year, every year, for each child registered before the doors open.
- 219 franchise agreements are signed and waiting against 557 schools trading. Protection over the development area runs until the school opens. A designated area exists where the owner asks for one inside the six-month window opening on the second anniversary.
How much does a Primrose Schools franchise make?
The average Primrose Schools unit reported $2,779,923 of revenue in the 2026 FDD. The brand’s disclosure document puts the profit line at 16.3% of revenue. Fees come off the top first, at about 10% 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 Primrose Schools performers
Primrose Schools splits its locations into groups instead of publishing one average. The best group averaged $3,586,393 a year. The worst averaged $1,909,787. Both run the same brand, on the same agreement, paying the same fees.
Decided before you open
- Trade area and site.A 1.9× gap between bands is not an operating gap. Catchment, daytime population and what sits next door set the ceiling before the first customer arrives.
- What you spend to open.Opening costs $2,152,500 to $7,960,300, a 3.7× 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 12.3% 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 44.4% of sales, against 16.3% kept at the end. Staff productivity, scheduling against demand hour by hour, and the balance of base pay to commission are where this is won. Small movements here move the result more than anything else, because nothing else in the structure is that large.
- Occupancy, the line that does not flex.Rent and building costs take 12.3% 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 10.0% 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.520 of 557 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 median. Anything below the sales line has to come from the franchisor or from owners you call.
What reaches the line
Rent stays put while revenue moves.
| Line | Top quartile | Second quartile | Third quartile | Bottom quartile |
|---|---|---|---|---|
| Schools | 89 | 89 | 89 | 90 |
| Average occupancy cost | 94% | 83% | 71% | 53% |
| Sales | $3,557,271 | $3,242,538 | $2,594,458 | $1,956,524 |
| Wages and taxes | $1,515,385 | $1,436,181 | $1,169,228 | $913,076 |
| Advertising and royalty | $358,173 | $317,682 | $264,121 | $194,577 |
| Other expenses | $408,289 | $360,798 | $316,025 | $229,549 |
| School operating expenses | $168,154 | $170,628 | $149,751 | $133,018 |
| Rent | $338,305 | $381,071 | $352,510 | $326,603 |
| Total expenses | $2,788,305 | $2,666,361 | $2,251,635 | $1,796,822 |
| profit | $768,966 | $576,178 | $342,824 | $159,702 |
| share of sales kept | 21.6% | 17.8% | 13.2% | 8.2% |
| Rent as a share of revenue | 9.5% | 11.8% | 13.6% | 16.7% |
| Wages as a share of revenue | 42.6% | 44.3% | 45.1% | 46.7% |
As the brand reported it.
| Line | Gap, bottom to top | Per point of occupancy cost | Share of the extra revenue |
|---|---|---|---|
| Sales | $1,600,747 | $39,043 | 100.0% |
| Wages and taxes | $602,309 | $14,690 | 37.6% |
| Other expenses | $178,740 | $4,360 | 11.2% |
| Advertising and royalty | $163,596 | $3,990 | 10.2% |
| School operating expenses | $35,136 | $857 | 2.2% |
| Rent | $11,702 | $285 | 0.7% |
| Total expenses | $991,483 | $24,183 | 61.9% |
| profit | $609,264 | $14,860 | 38.1% |
Ours throughout, taking the difference between the top and bottom quartile averages in the table above and dividing by the 41 points of occupancy cost that separate them.
Wages absorbs 37.6% of each additional revenue dollar while sitting at 42.6% to 46.7% of revenue overall. *. Staffing ratios are set by license, so the room is already staffed; filling the remaining places adds teachers more slowly than it adds tuition.
Rent takes 0.7% of the extra revenue and 9.5% to 16.7% of the total. The bottom quartile pays $326,603 on $1,956,524 of sales and the top pays $338,305 on $3,557,271. A lease signed for a full building is the fixed cost that decides whether occupancy cost is comfortable or fatal.
EBITDAR of 25.3% in the bottom quartile becomes profit of 8.2%. A 17.1-point drop, against 9.2 points at the top. Any figure quoted before rent flatters a low-occupancy cost school roughly twice as much as a full one.
The lowest-selling school in the top occupancy cost group lost $99,466 at profit. Alongside a group median of $678,972 and a high of $1,873,081. High occupancy cost sets the ceiling; the lease, the wages build and the size of the building decide where inside it a school lands.
Filling a new school
Three years to full, and the start line matters.
| Measure | 2022 vintage | 2023 vintage | 2024 vintage |
|---|---|---|---|
| Schools | 13 | 15 | 16 |
| Average revenue | $3,578,371 | $2,898,249 | $1,943,324 |
| Median revenue | $3,144,507 | $2,724,821 | $1,959,063 |
| Reaching the average | 4 of 13 | 5 of 15 | 8 of 16 |
| Highest | $6,286,293 | $5,564,134 | $3,091,732 |
| Lowest | $2,091,049 | $1,718,873 | $949,040 |
| Adaptive-reuse schools | 4 | 3 | 1 |
| Adaptive-reuse average | $5,125,427 | $3,424,789 | $2,101,562 |
| Adaptive-reuse premium * | +43.2% | +18.2% | +8.1% |
As the brand reported it, with the premium row marked *.
| Measure | Top third | Middle third | Bottom third |
|---|---|---|---|
| Schools | 15 | 15 | 14 |
| Average pre-registrations | 207 | 69 | 15 |
| Median pre-registrations | 181 | 61 | 14 |
| Pre-registration range | 126–432 | 41–113 | 0–36 |
| Average first-year revenue | $2,441,092 | $1,725,008 | $1,567,708 |
| Median first-year revenue | $2,265,276 | $1,651,608 | $1,586,471 |
| Average 2025 revenue | $3,122,440 | $2,649,122 | $2,395,685 |
| Median 2025 revenue | $3,077,175 | $2,212,919 | $2,335,390 |
| Gain, first year to 2025 * | $681,348 | $924,114 | $827,977 |
| Gap against the bottom third * | $726,755 | $253,437 | n/a |
Pre-registrations, revenue and counts are as the brand reported it; the last two rows are marked *.
Revenue climbs $817,524 a year through the build-up. $1,943,324 in the 2024 vintage against $3,578,371 in the 2022 vintage *, about 21 points of occupancy cost a year, or 39 children. A school opened in 2022 now sits 28.7% above the 520-school quartile average of $2,779,923.
192 extra pre-registrations bought $873,384 of first-year revenue. $4,549 apiece *. Three years on, $726,755 of that gap is still there, 83.2% of it, so the enrollment list on opening day sets a level.
The middle and bottom thirds gained more after opening than the top third. $924,114 and $827,977 against $681,348 *. They gained faster and still finished $473,318 and $726,755 behind, because the top third opened nearly a full year of enrollment ahead.
Adaptive-reuse schools cost $2,864,100 less to open at the low end and out-earn the average vintage. $2,152,500 against $5,016,600. That low figure has a $1,219,050 tenant improvement allowance inside it. The cheapest adaptive-reuse build that went without one reported $1,450,450 of development cost, which puts its total at $2,212,450 *.
Building costs
Filling the building is the business.
| Measure | Top quartile | Second quartile | Third quartile | Bottom quartile |
|---|---|---|---|---|
| Schools | 130 | 130 | 130 | 130 |
| Average occupancy cost | 94% | 83% | 72% | 52% |
| Building costs range | 88%–116% | 78%–88% | 65%–78% | 15%–64% |
| Average revenue | $3,586,393 | $3,109,936 | $2,513,577 | $1,909,787 |
| Median revenue | $3,308,944 | $2,993,809 | $2,468,120 | $1,863,251 |
| Highest | $8,566,973 | $6,286,293 | $4,423,752 | $4,492,102 |
| Lowest | $2,279,295 | $1,494,483 | $1,303,900 | $705,779 |
| Reaching the average | 49 of 130 | 53 of 130 | 57 of 130 | 61 of 130 |
| Average licensed capacity | 185 | 188 | 184 | 188 |
| Children enrolled * | 174 | 156 | 132 | 98 |
| Revenue per child * | $20,623 | $19,930 | $18,973 | $19,535 |
| Revenue per point of occupancy cost * | $38,153 | $37,469 | $34,911 | $36,727 |
Revenue, occupancy cost, capacity and counts are as the brand reported it. The last three rows are marked *, multiplying average occupancy cost by average licensed capacity and dividing revenue by the result.
Revenue per enrolled child sits between $18,973 and $20,623. *. An 8.7% range across quartiles whose revenue runs 87.8% apart. So the top quartile charges about the same per child as the bottom and simply serves 76 more of them.
Under half of each quartile reaches its own quarter's average. 49 of 130 at the top, rising to 61 of 130 at the bottom. The higher the occupancy cost group, the more one very large school pulls the average away from the middle of the group.
Inside the top occupancy cost group, revenue runs from $2,279,295 to $8,566,973. 3.8 times, at occupancy cost between 88% and 116%. Licensed capacity in that group runs 144 to 418, so size accounts for the range where occupancy cost is already settled.
The highest-selling school in the bottom group billed $4,492,102 at 64% occupancy cost or less. Against a group averages of $1,909,787. Bottom-quarter capacity reaches 296 places, which is where a half-empty building still out-earns a full one.
Fees and what it costs to open
Ten percent, and a very large building.
| Level | Revenue | Royalty at 7% | Brand fund at 2% | Local advertising at 1% | Total | With a 1% cooperative |
|---|---|---|---|---|---|---|
| Highest school | $8,566,973 | $599,688 | $171,339 | $85,670 | $856,697 | $942,367 |
| Top occupancy cost quartile | $3,557,271 | $249,009 | $71,145 | $35,573 | $355,727 | $391,300 |
| quartile average | $2,779,923 | $194,595 | $55,598 | $27,799 | $277,992 | $305,792 |
| Bottom occupancy cost quartile | $1,956,524 | $136,957 | $39,130 | $19,565 | $195,652 | $215,218 |
| Lowest-selling school reporting | $690,168 | $48,312 | $13,803 | $12,000 | $74,115 | $81,017 |
Ours, applying the published rates to filed revenue. The quarter average is the mean of the four equal quartile averages covering all 520 schools.
| Item | New-build low | New-build high | Adaptive-reuse low | Adaptive-reuse high |
|---|---|---|---|---|
| Development costs | $4,254,600 | $6,202,500 | $1,390,500 | $5,507,500 |
| School equipment and supplies | $313,000 | $383,000 | $313,000 | $383,000 |
| Additional funds, three months | $180,000 | $420,000 | $180,000 | $420,000 |
| Financing cost | $55,000 | $310,000 | $55,000 | $310,000 |
| Security deposit and rent guarantee | $0 | $250,000 | $0 | $250,000 |
| Marketing, advertising and grand opening | $75,000 | $105,000 | $75,000 | $105,000 |
| Initial franchise fee | $50,000 | $80,000 | $50,000 | $80,000 |
| Real estate fee | $25,000 | $70,000 | $25,000 | $70,000 |
| Initial training fee | $35,000 | $35,000 | $35,000 | $35,000 |
| Utility security deposits | $10,000 | $30,000 | $10,000 | $30,000 |
| Miscellaneous | $10,000 | $45,000 | $10,000 | $45,000 |
| Insurance | $5,000 | $20,000 | $5,000 | $20,000 |
| Licenses | $4,000 | $7,000 | $4,000 | $7,000 |
| Vehicle lease | $0 | $2,800 | $0 | $2,800 |
| Total | $5,016,600 | $7,960,300 | $2,152,500 | $7,265,300 |
As the brand reported it, reordered here by size; all four columns add to their stated totals exactly *.
The building is 78% to 85% of the cost of opening. $4,254,600 to $6,202,500 of a $5,016,600 to $7,960,300 total *. Everything the brand charges to open a new-build school comes to $110,000 at the low end, 2.2% of the project.
The cooperative ends on 30 June 2026, returning $27,799 a year at the quarter average. *, and worth 0.7 of a point of occupancy cost. The brand fund can move from 2% to 3% under the agreement, which would take the same amount back.
The $1,000 monthly minimum local advertising charge governs below $1,200,000 of revenue. *. At the lowest-selling school reporting, $690,168, it lands at 1.74% against 1%. That school already has the heaviest fee load in the system at 11.7% of sales.
A second school costs $27,000 less to start. A $70,000 franchise fee against $80,000 and an $18,000 training fee against $35,000. Veterans pay $50,000 on a first school, and a control transfer costs the two sides 40% and 60% of the existing-franchisee fee, $70,000 between them. An inspection fee of $1,000 to $3,000.
Questions we get asked
Questions owners ask.
What should a Primrose Schools franchise be billing?
Across 520 schools that traded all of 2025, revenue by occupancy cost quartile averaged $3,586,393, $3,109,936, $2,513,577 and $1,909,787. Medians of $3,308,944, $2,993,809, $2,468,120 and $1,863,251. The full range runs from $705,779 to $8,566,973. Between 37.7% and 46.9% of each quartile reached its own average. Against average licensed capacity of 184 to 188 places, revenue works out at $18,973 to $20,623 per enrolled child, which is marked *.
What actually reaches the bottom line?
Among 357 schools reporting rent, profit averaged $768,966, $576,178, $342,824 and $159,702 by occupancy cost quartile, 21.6%, 17.8%, 13.2% and 8.2% of revenue. Wages runs 42.6% to 46.7%, advertising and royalty about 10%, other expenses 11.1% to 12.2%, school operating expenses 4.7% to 6.8% and rent 9.5% to 16.7%. Measured before rent, across 405 schools, EBITDAR reads 30.8%, 28.8%, 25.2% and 25.3%. All of these exclude owner compensation. The lowest profit in each quartile is negative in three of the four.
How long does a new school take to fill?
For 44 schools opened between 2022 and 2024, 2025 revenue averaged $1,943,324 for the 2024 vintage, $2,898,249 for 2023 and $3,578,371 for 2022, a climb of about $817,524 a year, which is marked *. The 2022 vintage now sits 28.7% above the quarter average of $2,779,923. Pre-opening registrations set much of the level: the third of schools opening with 207 registered children averaged $2,441,092 in their first year against $1,567,708 for the third opening with 15. Three years later the gap between those groups is still $726,755.
What does the brand take?
A royalty of 7% of sales and a brand fund fee currently 2%. The agreement permitting 3%, both collected by direct debit on the 10th of the following month. Local advertising of 1% of the previous month's revenue or $1,000 a month, whichever is greater. Cooperative contributions of 1% in markets with ten or more schools, dissolving on 30 June 2026 and available to be reinstated later. An academic curriculum material license fee of $4,000 a school a year. Together that is 10% of revenue, or 11% while a cooperative runs. Is marked *. The filed advertising and royalty line averages 10.0% across the four quartiles.
Who does bookkeeping for a Primrose Schools franchise?
Three things shape the close here. Building costs is the operating metric and the financial one at the same time, so a month-end enrollment count belongs beside the revenue figure. Each point is worth $39,043 of annual revenue and $14,860 of profit. Is marked *. A school tracking only dollars finds out about a drift in enrollment a quarter late. Second, royalty and brand fund come out by direct debit on the 10th on revenue billed. So tuition on terms creates a fee liability ahead of the cash. Third, rent sits at 9.5% to 16.7% of revenue depending purely on how full the building is. That makes a lease-adjusted margin the number worth watching. Averan provides bookkeeping, controller, and fractional CFO support for franchise owners and has Certified QuickBooks ProAdvisors on the team.
- No median. Only an average is published, which a few large locations can lift on their own.
Questions worth putting to Primrose Schools
The filing answers what it answers. These are the gaps an owner or a buyer should close directly.
- Is the profit figure in Item 19 before or after owner pay, and how many locations sit below it?
- 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 Primrose Schools 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 is a point of occupancy cost worth in your school?
A structured review of your unit economics, cash forecast. Reporting, built around enrollment tracked beside revenue, a lease-adjusted margin, and the build-up your vintage is actually on.
Request the review