Happenings

Wednesday, July 11, 2018

How The Goddard School Adds To Its Franchisee-Only Childcare Network



(Forbes) - When we talk about the world of childcare and early education franchising, one system that simply must be part of the conversation is The Goddard School. Goddard maintains one of the larger networks in the country, and one that has been selling franchises since the late 1980s.

Founded by Lois Goddard Haines in 1983, Goddard was bought and franchised in 1988 by Joe Scandone and Anthony Martino, the mechanic and entrepreneur behind the auto parts and services franchises Aamco, Maaco and Sparks. “(Martino) foresaw the coming of double-income families and the need for childcare and preschool education and saw that it could also be a business that could be franchised,” says CEO Joe Schumacher, who was Martino’s lawyer at the time.

As of April, the Pennsylvania-based company had more than 480 schools in operation in 36 states, all of which are owned by franchisees, as the company prefers a purely franchised strategy and has never owned its own locations. According to a 2016 report from IBISWorld, a global business intel firm, Goddard held a 26% chunk of the $2.6 billion child education and developmental center franchise space, surpassing top names in the industry like The Primrose School and The Learning Experience.

Last year The Goddard home office saw more than $22.8 million in net earnings—up $6 million since 2015—off of $56.6 million in total revenue. As for how franchisees make out, schools that are considered mature—in operation for 18 months or longer—and maintain an occupancy rate of more than 90% report average EBITDA of about $386,000. Franchisees spend between $620,000 and $760,000 to launch a new location, according to the company.

Choosing Franchisees

The Goddard system is not unlike other childcare franchises in that franchise owners are not chosen on their educational experience. “The franchisee is the business face of the school,” says Schumacher. “Each franchisee has an educational director that’s approved by that state and approved by us.” That director implements the curriculum and staffs the facility. When assessing potential franchisees, “we are not looking for folks with an education background,” explains Schumacher. “We’re looking for folks with strong business backgrounds who are interested in education and childcare. ”When interested parties contact Goddard about buying a location, the school meets with the hopefuls and begins the process of conducting background checks and discussing the franchise in detail. “Throughout the process we encourage them to contact and visit as many of our franchisees as they possibly can,” says Schumacher.

New franchisees then enter a preliminary agreement, at which time the two parties begin searching for a new location, Schumacher explains. “It takes close to two years now to find a location, to do all the permitting, to get the building built. We don’t sign a franchise agreement until they’ve got a building permit.”

In 2017, The Goddard School added 17 new locations while 5 shuttered. The year before, it added 25 with no closings, and in 2015 the company added 23 new centers but saw 6 cease operations.

Once a new Goddard School comes online, the home office’s operations department maintains a connection to the franchisees and their education directors to assist with issues relating to implementing the curriculum and running the business. Each location receives two unannounced visits from home office personnel each year to assure compliance with quality and safety standards, says Schumacher.

The Industry Has Changed Focus

Since The Goddard School began franchising, the concept of early childhood care has changed, says Schumacher, and now there is greater emphasis on the educational development of children younger than age 5. When the company began offering licenses, childcare or daycare was the most pressing need for families with small children. Now centers like Goddard provide learn-by-play curriculums rather than simply babysitting young kids. Says Schumacher: “Over these 30 years it’s become much better understood that from birth to age 3 are probably the most important years in engaging a child’s brain and helping them learn, and helping them learn how to learn.”


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