The Goddard School

The initial license fee is $135,000 — one of the highest in the education category. This is just the starting point. Goddard School charges a series of additional upfront fees that make the total initial cash commitment significantly higher than the license fee alone:

- Initial Marketing Fee: $55,000–$75,000 (required, non-refundable) - Initial Training and Opening Support Fee: $35,000–$38,500 (non-refundable) - Site Development Fee: $35,000 (non-refundable — for real estate identification assistance) - Background Check Fee: $1,500–$6,000 (per person, up to 4) - Convention Deposit: $2,000

Those fees alone add $128,500–$156,500 on top of the $135,000 license fee, for an initial cash outlay of $263,500–$291,500 before any construction.

The build-out is where the investment really scales. The primary scenario (Table 1: landlord constructs improvements to a 10,500–12,500 sq ft space) totals $953K–$1.36M. Furniture, fixtures, and equipment run $218K–$263K. Playground equipment — a Goddard signature — is $140K–$240K. Security systems are $40,000 fixed. Computer, IT, and AV add $26K–$40K. Three-month additional funds of $100K–$275K reflect the enrollment ramp period before tuition revenue reaches scale.

Ongoing royalty is 7% of gross receipts, with a favorable ramp for franchisees opening additional schools (2% in months 1–3, 4% in months 4–6, 6% in months 7–12, then 7% thereafter). The marketing fund percentage was not fully captured in the FDD prep — confirm current rate directly with the franchisor.

The Goddard School provides multi-year Item 19 data with genuine expense-side visibility — rare in the education category.

FY 2024 — 596 Mature Schools (18+ months operating): - Average gross revenue: $2,417,129 - Median gross revenue: $2,267,646 - Range: $574,494 to $6,411,013 - Average EBITDAR: $837,111 (34.6% margin) - Median EBITDAR: $765,228 (33.7% margin) - 234 of 596 schools (39.3%) at or above average EBITDAR

Year-over-year EBITDAR improvement is consistent: - FY 2022 average EBITDAR: $749,081 - FY 2023 average EBITDAR: $796,438 - FY 2024 average EBITDAR: $837,111

EBITDAR (EBITDA before rent) is the disclosed metric, which means actual owner cash flow will be reduced by lease costs. At median EBITDAR of $765K and annual rent typically running $120K–$240K for a 10,500 sq ft childcare space, EBITDA after rent is approximately $525K–$645K at the median — before debt service on the initial investment.

At a $1.15M midpoint investment and $575K EBITDA, payback period is approximately 2–3 years on an unlevered basis — outstanding for a franchise of this investment level.

The Goddard School has grown consistently for three years with minimal closures: +23 in 2022, +29 in 2023, +15 in 2024, reaching 642 schools. Only 3 mature schools closed in 2024 across the entire system — a closure rate of under 0.5%. The system is 100% franchisee-owned (no company-operated locations), meaning all 642 operators are franchisees with personal capital at stake.

The slower growth in 2024 (+15 vs. +29 in 2023) may reflect real estate and construction lead times tightening, or a more selective new franchisee approval process. The brand has no apparent expansion pressure — demand for premium childcare is structurally driven by dual-income families and waitlist dynamics in established schools suggest strong consumer demand.

The investment level is the primary barrier and risk: $953K–$1.36M is not a small business entry point. This is closer to buying a small commercial property than opening a typical franchise. You need to be capitalized for the full range and budget for cost overruns in construction — $140K–$240K for playground equipment alone is subject to material and labor cost swings.

The upfront fee structure is stacked. By the time you've paid the license fee ($135K), marketing fee ($55K–$75K), training fee ($35K–$38.5K), and site development fee ($35K), you've spent $260K–$283.5K before construction begins and before any space has been identified. All of these fees are explicitly non-refundable.

State licensing for childcare is the most complex regulatory environment in franchising. Requirements vary by state for staff ratios, director qualifications, background check standards, facility inspection timelines, and subsidy program eligibility. Budget significant time — often 6–12 months — for licensing before you can open. The $0–$10K licensing line item in Item 7 may understate the true cost in highly regulated states.

Goddard's enrollment model is tuition-based, which creates meaningful revenue predictability once full — but the ramp to capacity (typically 80–120 enrolled children) can take 12–24 months. The $100K–$275K working capital buffer in Item 7 reflects this reality. Ensure you have reserves beyond the Item 7 estimate.