Should I Invest in a Day Care Franchise?


The day care industry in the United States provides day care related preschool services. The industry is booming and creating many new jobs.     

The Reason for the Boom

Many parents work full time.  They cannot take care of their children during the day. The day care industry takes care of kids during the day when their parents cannot. There are two main types of care offered in this industry- center-based care and family child care. Centers offer part-time and full-time pre-school and pre-kindergarten programs to children in addition to day care programs. 

Market Analysis   

This industry’s profit margin and size has grown in recent years. In 2013, the profit margin of the child day care industry was 5.4%. Last year, annual profits rose to 9.9%. Sales increased by 7% a year between 2008 and 2012. The business is recession resistant.      

Increasing Demand   

Franchised Day Care facilities have wait lists to enroll in their centers. Despite this demand, the industry is highly regulated. Franchisees have to hire enough providers to meet state requirements for teacher to student ratios. Growth in day care revenue is directly related to the unemployment rate. With unemployment at record lows, demand has increased. There are more working women in the U.S. than ever before.  These mothers want to give their children the proper education and care. 

What’s a typical day like for a day care franchisee?

Franchisees need to be passionate about helping children because they engage kids in creative activities and educational programs. They need to be detail oriented when following the latest rules and regulations of the industry.  They have to be adept at hiring and leading the right staff. 

Outlook 

The future for daycare franchises looks bright. Net profits have increased since 2011. Over the past few decades, the number of child care facilities have increased. In 1987, there were only 262,000 units. Today, there are over 800,000 facilities.

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