FDD Talk: Children’s Lighthouse Learning Centers Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

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Children's Lighthouse Learning Center Photo

In this FDD Talk post, you’ll learn the following:

  • Section I – Background information on the Children’s Lighthouse Learning Centers franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Children’s Lighthouse Learning Centers franchise, based on Item 7 of the company’s 2019 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Children’s Lighthouse Learning Centers franchise, based on Items 5 and 6 of the company’s 2019 FDD
  • Section IV – Number of franchised and company-owned Children’s Lighthouse Learning Centers outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
  • Section V – Presentation and analysis of Children’s Lighthouse Learning Centers’ financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
  • 2018 average, median, highest, and lowest gross revenue and enrollment numbers for the 41 franchised Children’s Lighthouse Schools that were open and operating on December 31, 2018 and which had been operating for at least 18 months as of December 31, 2018

Section I – Background Information

20 Things You Need to Know About the Children’s Lighthouse Learning Centers Franchise

Appoints New Director of Marketing and Franchise Administration

1.  In mid-September 2019, Children’s Lighthouse Learning Centers announced the appointment of Colin Berry as director of marketing and franchise administration. Berry will oversee the brand’s marketing and new franchisee administration, leading franchisees through the entire opening process.

2.  Berry has nearly a decade of franchise marketing and development experience, specializing in strategic and brand marketing solutions that drive tangible results for franchisees. He has held key marketing positions with a variety of franchise brands, such as Mr. Gatti’s Pizza, MOOYAH, and TGI Fridays. Through his previous experience, Berry is an expert in growing sales and traffic through innovative marketing initiatives.

3.  Michael Brown, president of Children’s Lighthouse Learning Centers, said, “This is an incredibly important role for our brand and franchisees, and Colin is the perfect fit. His proven ability to support franchisees with smart marketing strategies that impact their bottom lines is essential. Additionally, his level of support for new franchisees is vital as they launch their businesses. Colin’s hiring reflects our continued commitment to bringing on the best talent the industry has to offer in order to support our growing system.”

4.  Berry’s appointment comes during an exciting time for the early learning school franchise. The brand has 30 schools in development and has added several members to its corporate team in 2019, including key roles in operations and curriculum development.

5.  According to Berry, “I’m thrilled to join such a vibrant, fast-growing team in the booming early education space. The Children’s Lighthouse brand is widely recognized as the leader in values-based early learning, and I’m looking forward to making an impact for our franchisees, as they make a difference in their communities through our curriculum and model.”

Partners with St. Jude Children’s Research Hospital

6.  In mid-August 2019, Children’s Lighthouse Learning Centers announced its new national partnership with St. Jude Children’s Research Hospital. Franchise partners of Children’s Lighthouse have the opportunity to give back to St. Jude through the St. Jude Trike-A-Thon program, a national fundraising initiative. The St. Jude Trike-A-Thon is a fun, service learning program for early learning schools and preschools that teaches trike and riding toy safety.

7.  Children’s Lighthouse early learning schools are also encouraged to participate and create teams for the St. Jude Walk/Run during September, which is Childhood Cancer Awareness Month, of which Children’s Lighthouse is a sponsor.

8.  Through the partnership, the brand has a goal of raising more than $30,000 for St. Jude for the 2019-2020 school year. At the time of the announcement, numerous Children’s Lighthouse schools had already committed to participating in the partnership and fundraise for the hospital.

9.  Michael Brown, president of Children’s Lighthouse Learning Centers, said, “We’re honored to launch our national partnership with St. Jude Children’s Research Hospital and provide this opportunity to our franchisees. As we grow across the country and our schools serve more families every day, it’s important to remember those in need. We’re excited to raise money and awareness for the children who need it the most.”

10.  St. Jude Children’s Research Hospital is leading the way the world understands, treats, and defeats childhood cancer and other life-threatening diseases. It is the only National Cancer Institute-designated Comprehensive Cancer Center devoted solely to children.

11.  Treatments invented at St. Jude have helped push the overall childhood cancer survival rate from 20 percent to more than 80 percent since the hospital opened more than 50 years ago. St. Jude freely shares the discoveries it makes, and every child saved at St. Jude means doctors and scientists worldwide can use that knowledge to save thousands more children.

12.  Families never receive a bill from St. Jude for treatment, travel, housing, or food – because all a family should worry about is helping their child live.

Children’s Lighthouse of Cypress-Fairfield Teams Up with The University of Texas Health Science Center at Houston

13.  In early July 2019, Children’s Lighthouse Learning Centers announced a collaboration between Children’s Lighthouse of Cypress-Fairfield and Children’s Learning Institute at The University of Texas Health Science Center at Houston (UTHealth). Children’s Learning Institute at UTHealth is currently developing new educational and outreach materials for early childhood teachers and other professionals.

14.  The organization selected Children’s Lighthouse of Cypress-Fairfield to capture two of their teachers engaging with students in their after-school program on video and in photographs as instructional examples. The school was selected as a “model” due to its best-in-class operations and child care practices.

15.  Randy Craft, owner of Children’s Lighthouse of Cypress-Fairfield, said, “We are thrilled to be a part of this initiative with Children’s Learning Institute. It is a true honor to have been selected and we are very proud of our teachers that the Children’s Learning Institute felt exemplified premier educational standards.”

16.  Children’s Learning Institute develops many resources for early childhood teachers and professionals to use in the classroom and other early childhood settings. Many of these resources include authentic video of teachers working with children in a classroom setting. The footage filmed with Children’s Lighthouse of Cypress-Fairfield will be used as a tool to instruct educators on proper teaching techniques as well as train state education evaluators on how to assess teachers.

17.  According to Jasmine Wiggins, coordinator of education outreach and special projects at Children’s Learning Institute, “We are very selective when choosing locations for classroom filming, since we look to capture high quality teacher-child interactions. The school was selected to participate in this project because of the quality of the program, its teachers and their teaching practices.”

Company History

18.  Children’s Lighthouse Learning Centers was founded in 1997 by Pat Brown and his brother Mike Brown in Ft. Worth, Texas. The Browns founded the business with the goal of providing educational daycare to families. Franchising of the Children’s Lighthouse Learning Centers concept began in 1999 and the company has grown slowly across the United States.

19.  Pat Brown has remained with the company as chairman of the board. He oversees strategic leadership and directly supervises operations, franchise development, and real estate. Michael Brown, Pat’s nephew, also works at Children’s Lighthouse Learning Centers and serves as the company’s president.

Entrepreneur’s Franchise 500

20.  Children’s Lighthouse Learning Centers did not rank on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

  • Please click here for detailed estimates of Children’s Lighthouse Learning Centers franchise costs, based on Item 7 of the company’s 2019 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Please click here for detailed information on Children’s Lighthouse Learning Centers’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2016

  • Outlets at the Start of the Year:  36
  • Outlets at the End of the Year:  39
  • Net Change:  +3

2017

  • Outlets at the Start of the Year:  39
  • Outlets at the End of the Year:  48
  • Net Change:  +9

2018

  • Outlets at the Start of the Year:  48
  • Outlets at the End of the Year:  49
  • Net Change:  +1

Company-Owned

2016

  • Outlets at the Start of the Year:  1
  • Outlets at the End of the Year:  0
  • Net Change:  -1

2017

  • Outlets at the Start of the Year:  0
  • Outlets at the End of the Year:  0
  • Net Change:  0

2018

  • Outlets at the Start of the Year:  0
  • Outlets at the End of the Year:  0
  • Net Change:  0

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

  • The information listed below has been prepared from information reported to the franchisor during the 2018 fiscal year.
  • The reported figures have not been audited by the franchisor or an independent auditor.
  • These financial performance representations do not reflect the costs of sales, operating expenses, your required royalty payments and Advertising Fund contributions, or other costs or expenses that must be deducted from the gross revenue or gross sales figures to obtain your net income or profit.
  • Below is the average Gross Revenue and average student enrollment information for the 41 franchised Children’s Lighthouse Schools that were open and operating on December 31, 2018 and which had been operating for at least 18 months as of December 31, 2018 (“Reporting Schools”).
  • The 8 Schools that were not open and operating at least 18 months as of December 31, 2018 are not included in the Reporting Schools.


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