According to Child Care Aware of America, in 2014 there were more than 33.8 million families with children in the United States. Of those, 45 percent had children under the age of six.
As the U.S. economy continues to grow following the recession, it appears many Americans are beginning to regain financial confidence to grow their families.
One example of a child-focused industry experiencing growth in conjunction with this trend is early child care and education.
Research from IBISWorld reports the child care industry in the U.S. is growing at an annual rate of 1.2 percent and totaled $48 billion in revenue in 2014. With the possibility of just under half of American families in need of early child care, many entrepreneurs may see the lucrative potential in this market.
However, the decision to enter into a child-focused franchise, and especially the early child care business, requires special consideration and understanding of the market. The following are five points prospective franchisees should consider if they are evaluating such an opportunity:
This industry requires greater responsibility from franchisees
Owning a child-focused franchise comes with a number of responsibilities, from maintaining the right insurance coverage, to adhering to the proper privacy regulations, to understanding a number of health and safety guidelines. But even more important, business owners are entrusted with parents’ – and society’s – most prized possessions. Keeping this in mind, a franchise-wide culture that puts the safety and well-being of children first and fosters open communication between employees and parents is critical to success.
You will be held to a higher standard
There are several standards set at both the federal and state level that franchise owners must be familiar with. Federal standards include compliance with the Occupational Safety and Health Administration and the Security and Exchange Commission. However, the federal government does not mandate employee background checks, minimum training or regular site inspections, as these requirements vary by state.
In the case of early child care and education, the most successful providers hold themselves to higher standards for education and development. For example, AdvancED national accreditation requires child care franchises to have continuous professional development and meet minimum education standards. Surprisingly, only about 10.3 percent of child care centers in the U.S. are nationally accredited, so understanding an early childcare franchise’s level and reach of accreditation is important.
Franchise-level support is key
Familiarity with federal, state and franchise standards is essential, but nearly impossible without the support and guidance of the franchisor. Before investing in a child-focused franchise, it is important to understand how the company is structured to help new franchisees to succeed. Support at the corporate level with experts in areas such as quality assurance, regulations, curriculum, technology and marketing can be especially helpful for new franchisees.
Additionally, child-focused franchises that embody an “extended family” culture and prioritize the new franchisee and their business can increase the odds for success. Along these lines, franchises that are forthcoming about the hurdles and considerations in this industry will reduce unexpected surprises for the franchisee down the road.
The growing and changing market requires vision for the future
As families continue to devote more disposable income to children’s care, education, activities and entertainment, franchises in these industries are well-positioned to grow and expand. Companies that can quickly expand to meet this demand will increase the value of their brand and better position franchisees within their individual markets. This can include growth in existing markets, expansion into new markets and even establishing the brand in international markets.
Growth is important; however it is equally important to align with a franchise that is prepared to addresses changes in the U.S. market as well. The U.S. Census Bureau reported the Hispanic or Latino population accounted for more than 50 percent of the U.S. population growth between 2000 and 2010. Additionally, the U.S. Asian population increased at a rate more than four times faster than the total U.S. population during the same time.
When it comes to successful sustained growth, it will be important for child-focused businesses to consider these population changes and prepare and adapt to meet the needs of these families.
This industry yields the greatest rewards
Child-focused franchise owners experience rewards far greater than any other industry. Every day they have a positive impact on the lives of children and their families. In the early childhood and education industry, we are providing children with a quality education and a safe place to develop, but beyond this, we reassure parents and provide inspiration and hope for the future.
Child-focused franchises come with many unique and complex challenges. Competitive franchise standards, in addition to federal and state requirements, leave no room for error. But the rewards far outweigh the challenges. The impact on your community, children’s lives and the future can be significant and second to- none.
Chief Operating Officer of Kids ‘R’ Kids International, Inc., Bob Kirschner, has over 30 years of experience in successfully managing franchise and distribution growth strategies for over 25 brands and 30,000 locations. In that time, Bob has worked with three child-focused franchises ranging from early child care to mathematics to supplemental education.