Daycare centers are becoming more common. These facilities are more than just businesses; they’re a way of life. Many parents depend on these facilities to look after their children while they’re busy. This, of course, has led to more interest in the business side of running daycare centers. As more daycare franchises continue to spring up, many people continuously explore the idea of investing in one. For any entrepreneur, getting the right information before choosing to invest in a particular daycare franchise is crucial. For daycare franchise, click here.

Cost of a Daycare Franchise

Depending on where you want to set up your daycare center and other factors, you may incur different costs. However, it can range anywhere from $300 000 to $7 000 000. There are several factors that contribute to these figures. These may include:


Location is as crucial to a daycare franchise as it is to any other business. How much you charge parents for your daycare services will greatly depend on where you’re located. The general cost of living in a particular area will influence the real estate market, meaning you’ll lease or buy property according to the local market forces. Of course, your location has to be approved by the franchisor before you can proceed to set up shop. Depending on such factors, you may need to put a down payment of between $15 000 and $100 000 for the lease of a property for your franchise. This does not include utility costs which may run into thousands of dollars.

2) Pricing Model

It’s not simply a matter of coming up with a daycare cost that you feel is appropriate. You have to research your local competition and factor in things like the cost of living in that area to come up with an appropriate price. If you set seemingly high tuition fees, you’ll drive away many parents. Of course, if you’re buying into a franchise, they’ll most likely have a pricing model in place. However, some franchisors allow franchisees some leeway when it comes to pricing. Do thorough research before deciding on what to charge. You may charge weekly or monthly. Always be aware of how many hours you put in to know what to charge. For instance, if a parent is always one hour late to pick up their child, this means you work an extra hour each day of the working week. If you tally that up, it means about 20 hours of overtime per month. Such things should go into pricing. This will ultimately determine profitability.

3) Marketing 

Another major advantage of buying a franchise is that there is usually a solid marketing plan already in place. Unlike starting your daycare center from scratch, a daycare franchise gives you the advantage of not having to scrounge for clients. The daycare business heavily relies on trust. A successful daycare franchise means they’ve established a certain level of trust. Using the franchisor’s brand will drum up a lot of business for your daycare center. However, you cannot solely rely on the franchisor’s reputation.

Active advertising is your best friend. Spread the word about your daycare franchise to parents in the local community. Your first few clients are critical. Ensure to impress them with your daycare services. They’ll be your biggest cheerleaders, referring other parents to your daycare center.

4) Legal Requirements

Getting the right licenses and insurance will mean increased upfront costs. Some jurisdictions may have specific requirements for establishing a daycare facility. Usually, the authorities will want to carry out inspections to ensure the facility meets certain health and safety regulations, among other things. All these things are necessary to address as they may cause costly legal issues later on.

5) Equipment and Inventory

The cost of purchasing the necessary equipment and stocking essential daycare items will also determine how much money your initial daycare costs will be.

A daycare center will need equipment like computers and playground supplies. These do not include furniture and other things like telephone systems. All of these can easily cost upwards of $50 000.

These are some of the major factors that will determine the cost of setting up a daycare franchise. They do not include the cost of labor. Taking care of kids can be a labor-intensive undertaking, requiring caretakers that are diligent and good with kids. Considering an average pay of about $30 an hour, a daycare worker can make over $60 000 a year. If you need multiple such workers, this could easily add an extra $300 000 to your startup costs. 

All in all, expect to spend hundreds of thousands of dollars to set up a daycare franchise.