As with any business venture, profitability is always a key issue to consider before making any investment. This is especially crucial for any business that may have a slim profit margin, like a daycare franchise. The demand for daycare franchises is driven by parents’ concern for their kids while they’re busy working, unlike other industries where things like commodity prices affect supply and demand. Getting an accurate figure for the profits of daycare franchises depends on several factors. For example, if you look at child care franchise by Children’s Lighthouse, their franchise fee is about $75 000, not including other costs and net worth requirements.

On average, daycare franchise owners make about $37 000 annually. Of course, some make way higher than this annual figure.

How much a daycare franchise owner makes is greatly influenced by several factors like;


Where you set up your daycare franchise will greatly determine your rates. Different areas may have different costs of living. This is something to always consider when setting your rates. For instance, South Carolina is a state with one of the lowest daycare costs, averaging about $9 000 a year. A state like New or the District of Columbia, on the other hand, can be as high as $30 000 a year. That’s why it’s always crucial to consider the cost of living in a particular area to guide your pricing. The idea is to charge just the right price without undercutting other daycare facilities in your area. While undercutting your competitors may seem like a smart move, it will ultimately lead to overwork and very slim profit margins. Seemingly high prices will merely drive your customers elsewhere.

It’s always advisable to have a solid business plan before setting prices. This is because some of the income will have to be re-invested toward the maintenance of the daycare facilities. This can take up a sizeable amount of your earnings.

All these details will guide your tuition pricing.

2) Age

Not all services at a daycare center are of equal effort. For instance, infants and toddlers usually require more care and attention. Being so young, they need to be fed regularly, have their diapers changed periodically, and supervised napping sessions. Toddlers and infants are, therefore, more costly to look after in terms of the manpower and effort needed. This translates into higher tuition fees.

Some toddlers may not require the same level of supervision as infants. However, they’re usually rambunctious and have a very short attention span. This can make seemingly easy activities like feeding to be chaotic, thereby requiring added supervision and, in some cases, spoon-feeding. Add to that the extensive toilet training time and numerous diaper changes, and it becomes clear that caring for toddlers is equally hectic.

Older children between ages four and six require less supervision. The supervision is usually during playing time with their peers and during storytelling sessions or other activities.

All these different age groups require varying levels of supervision and effort. This means that you’ll charge tuition accordingly; the more effort needed, the higher the tuition fees.

3) Specialty Services

A daycare franchise tends to offer basic childcare services like playtime, diaper changing, supervised feeding, and some guided activities. However, if you’re a daycare owner that wants to make more money, offering some added services will do the trick. These services can be anything from transportation to offering non-traditional hours.

Many daycare franchises operate in such a way that parents often drop off and pick up their kids. However, if you can add transportation as part of the services offered, many parents would be willing to pay for the convenience it will afford them. If you don’t want to provide double transportation services, evening drop-offs alone can be just as effective. Usually, many parents may be running late during evening hours and would appreciate not having to worry about picking their kids up. An extra $20 to cater for transportation can increase your profit margin.

Offering non-traditional hours could mean arranging daycare over the weekends or late into the night. This will be a great option for parents that work long, irregular shifts. They’d be willing to pay for such a convenience. This is all good news because the daycare franchise can make more money.

At the end of the day, a daycare franchise that goes above and beyond for its clients tends to make more money. While factors like location do matter, daycare franchises that come up with creative ways to make their services more attractive can earn more than the average $37 000.

By Manali