Are Preschool Franchises a Good Investment? Explore Alternatives Here

As parents search for more ways to get their children back on track and more socialized with their peers, the demand for high-quality, safe learning environments is rising. Childhood development is at the forefront of parents’ minds since widespread lockdowns isolated young families.

The 2022 Child Day Care Market Research Report shows the industry has grown at an annual rate of 4.6%. But with that growth comes the realization that preschool franchises may cost more than they’re worth for investors.

When researching child-focused franchises like a preschool, investors should also consider the demand for active play spaces that foster childhood development in a safe and fun environment.

While preschools offer more curriculum-based learning, active play spaces, including Launch, encourage fitness for the whole family. To keep kids and parents engaged, Launch offers a variety of physical and fun activities, including group exercise classes, trampoline basketball and dodgeball, foam pits, and open jump time so parents can bring their kids as an alternative to outdoor parks and playgrounds.

Another reason Launch is an excellent alternative to a preschool is the ability to incorporate several income streams, including events like birthday parties, family and corporate events, or parents’ date night.

When considering preschool and family entertainment facilities like Launch for an investment opportunity, it’s essential to consider asking some critical questions so you can make the most informed decision.

How much do preschool franchises typically cost?

Although financing options are made available for qualified individuals through the Small Business Association (SBA), potential franchisees must understand the cost of starting this new venture.

For some preschools, the initial investment for a 13,000-square-foot school could cost nearly $5.4 million, according to the Creative World School website. Their table shows expenses including:

Initial franchise fee
Building/leasehold improvements
Landscaping, irrigation, sidewalk, trail, fencing, playground equipment, and resurfacing
Impact fees and utility connection fees
Land costs
Architectural/engineering, legal, and accounting
Opening furniture, fixtures & equipment
Opening inventory and supplies
Pre-opening expenses
Operating capital for three months
SBA & bank fees
Closing costs

Pros and cons of opening a preschool

Opening a preschool on your own comes with some benefits, including minimal education requirements, the luxury of not having to place your own child in daycare, and the ability to operate on a smaller scale out of your home.

Although you’re not required to enroll a certain number of children to cover the costs of significant expenses mentioned above, you’ll still be required to meet safety standards for infants and small children. These requirements can tack on additional fees that may be significant if an older home needs to be updated.

When investing in a preschool, you’ll need a significant amount of capital to get started and the knowhow to retain good teachers. Although franchises offer team support, much of the responsibility to stay afloat and increase profit is up to you.

Alternative franchises for active play

According to IBISWorld, the market size for indoor play centers is $658 million. These indoor playgrounds offer games, food, party hosting, play areas, and snacks. Adding additional income streams like a parents’ night out, CPR certification course, or other child/parent-centered activities is a great way to supplement your income when running an indoor playground.

Indoor playgrounds offer child development-centered activities for social skills; they keep children active and healthy, are a great alternative for days with bad weather, and are an excellent option for birthday parties. In addition, indoor playground franchises are relatively low maintenance and require less staff on payroll than preschools.

Many potential investors interested in education franchises may want to rethink their investment unless they’re genuinely passionate about the education piece of the business.

Explore franchising with Launch

If high startup costs and maintenance fees are of concern, indoor playgrounds are an excellent option for investors and allow children and families to enjoy fun and safe socialization. As parents continue to praise the safety inside these family entertainment centers, potential franchisees should take note of their needs and the high demand for family fun.

Launch has one of the lowest insurance rates in the business thanks to our safety record. It’s a great franchise opportunity because of our robust support system and the opportunity to join a forward-thinking culture with a community built on unique experiences and family fun. Launch is one of the fastest growing family recreation trends and shows no sign of slowing down, with more families looking for alternatives to outdoor parks and playgrounds on hot or rainy days.

Launch offers operational support, local marketing, and national advertising. The team also assists with proven business management, systems, and policies and procedures to take the guesswork out of running your business efficiently.