How to Start a Daycare Franchise: Your 15-Step Guide

  Wanting to start your own daycare franchise but struggling to figure out where to begin? We’re here to help! You’ve probably heard several times that starting a daycare franchise isn’t easy. It takes time, money, effort, and perseverance. However, if you’re ready to invest in yourself and the well-being of kids across the country, dive into our thorough guide on how to start a daycare franchise in 15 easy steps.

Table of Contents

  • What is a Daycare Franchise?
  • How Can You Issue Franchise Units?
  • 15 Steps for Starting a Daycare Franchise
  • Run a Daycare Franchise With Illumine
  • FAQs About Starting a Daycare Franchise

What is a Daycare Franchise?

Franchising offers an opportunity unlike any other in the business world. When you buy a daycare franchise, you acquire the parent company’s hard-won reputation, putting you ahead of the pack when it comes to parental consideration. The franchisor is the company that sells the license to use its brand and concept to others. A franchisee is a person who invests in the original firm by obtaining the right to sell the franchisor’s goods or services using the franchisor’s existing trademark and business model. You can gain from franchising in a variety of ways:
  • Branding that is instantly recognisable
  • A well-established reputation
  • Licensing
For instance, McDonald’s, the fast-food multinational, has a worldwide presence thanks to its franchises. It either owns or arranges long-term leases on the land and facilities utilized by franchisees. The franchisee contributes a portion of the required capital by making an initial investment in the company’s provided equipment, seating, décor, and signage in the location. McDonald’s success is due to the organization’s commitment to consistent menu standards. A McEgg in Texas should taste similar to a McEgg in Ireland in terms of quality. Franchisees make their own pricing and employee selections while benefiting from the brand’s global recognition.

How Can You Issue Franchise Units?

To put it simply, unit franchising is the process in which a franchisee grants exclusive franchise rights to utilize a brand name to resell its goods and services. The process involves the following steps:
  • Within their region, daycare franchisees can sell a large number of unit franchises.
  • The franchisee is usually paid an upfront fee for these rights.
  • The franchisee is also paid a royalty on the revenue generated by the unit franchisee’s goods and services.

15 Steps for Starting a Daycare Franchise

The need for good and professional childcare is expanding daily as a result of globalization and parents’ expectations. Read through our 15 step guide to own a successful daycare franchise:

Arrange Franchise Fees and Startup Costs

According to the Children’s Franchise Industry Report (2021), the initial investment necessary for a children’s services franchise can range from roughly $10,000 to more than $5,600,000. The following are some examples of daycare franchise costs:
  • Employee salaries
  • Daycare equipment
  • Provisions (educational, housekeeping, office)
  • Marketing collaterals
Besides the initial fee, you also need to factor in startup costs, including:
  • Accounting
  • Legal
  • Rent
You don’t want to put your money into a company that isn’t likely to last, so seek a franchisor that is continually expanding. Also keep an eye out for the length of the franchise agreement. The majority of franchise agreements are for a period of 10 to 20 years.

Draft a Business Plan for Your Daycare Franchise

The first component of every business plan should outline what an organization does in general. Since your success is linked to that of the franchisor, you should look into how the franchisor is perceived. While you should undoubtedly check for the franchisor’s strengths, you should also keep an eye out for the franchisor’s faults. The presence of positive evaluations and recommendations for the franchisor indicates that the franchisor is well-liked.

Competitive Research

Start by investigating childcare franchising operations if you aren’t already familiar with them. The next steps are to:
  • find out which daycare curriculum you want to run in your daycare franchise.
  • acquire a feel of what you may expect in terms of expenditures and returns from a franchise.
  • learn what distinguishes various child daycare franchises from one another.
  • find out what kind of business support and training the franchisor extends towards you.

Employ Qualified Teachers

According to Data USA, education is the most prevalent major among preschool and kindergarten instructors, however a significant proportion of them also have a major in Human Sciences. Notwithstanding, a team of good, qualified teachers is the most important requirement for a preschool to function properly. From time to time, the franchise will need to conduct teacher training sessions.

Licensing and Accreditation

Every licensed childcare provider in the United States must pay a one-time application fee as well as annual costs. Licensing fees only cover a percentage of the cost that providers use to maintain the health and safety of the children in their care. All state-licensed childcare centers must also pay annual fees to keep their licenses and continue to operate. There are two types of fees: one-time fees and yearly fees. A one-time fee supports the training that the licensee must complete before starting operations. The application price for a childcare facility will vary greatly depending on the center’s intended capacity. A yearly license fee is also required of every licensee.

Daycare Franchise Location

Check that the site you’re interested in doesn’t have any additional concerns, in addition to zoning compatibility. For example, closeness near a liquor shop may be prohibited. Other things to keep in mind include:
  • choosing a location that is easily accessible and close to the main street.
  • making certain there is enough parking.
  • having more square footage per child if you plan to host very young children. Pro tip: the maximum class size for younger children is usually smaller.

Create a Brand Recognition

Starting a franchise is therefore far less hazardous than starting a firm from the ground up. Potential consumers who have heard of the daycare firm will trust you more, helping you gain brand awareness. All in all, you’ll have a dedicated consumer base right away if you begin a daycare franchise with a well-known brand name.

Quality Control Plan

This checklist addresses most health and safety problems. However, it does not take the place of each child care program’s need to comply with health and safety regulations.


If you find yourself in need of some starting funds for your daycare franchise, you have a few options:
  • Short-term and long-term business loans: They are available from commercial banks at interest rates subject to the states you decide to open a daycare franchise in.
  • Agencies of the government: For information on federal loan programmes, contact your state’s economic development branch for info on state loan and grant programmes.


By locating discounts online, you will save money on daycare franchise supplies. You can shop at the following platforms to avail them:
  • Groups on Facebook
  • Craigslist
  • IKEA
  • Amazon
  • Target


Manually updating all of your accounts can be extremely time-consuming and labor-intensive. By using Illumine’s childcare bookkeeping tool instead, you can save time and manage all of your financial activities more efficiently. Additionally, these digital records make it very simple to search for information.

Manage Enrollments

Automate enrollment operations like numbers and age of enrollment through the lead CRM in Illumine. Preschools get admission requests throughout the year, making it tough to maintain them in an excel sheet, update them, and share with management. Illumine has a student registration software, so you can handle admissions without being redirected to another site. Such a time saver!

Incentivize Your Customers to Refer You

You must ensure that the incentives you provide benefit both you and your customer. Take advantage of this opportunity by offering parents a significant discount on their child care tuition or free entry to an event at the franchise daycare. This way, parents will be interested in what you have to offer.

Tuition Cost

These figures are based mostly on reported child care tuition rates, which indicate the cost of child care for families in the US. The cost of tuition varies depending on a child’s attendance schedule and the location of the preschool. To fit the requirements of parents, most daycare franchise owners offer both full-time and part-time enrollment choices.

15. Create a Market Presence

It’s difficult to boost preschool enrollments by word of mouth marketing. That is why you need to rely on other strategies, such as social media marketing, paid ads, and organic marketing, among others. With the help of our low-cost preschool marketing hacks, you’ll be able to attract more parents to your center in no time.

Run a Daycare Franchise With Illumine

Before you go any further, think about whether you’re ready to take on the responsibility of starting a daycare franchise. Are you only interested in starting a daycare, or do you have the desire to get started and see it succeed? If the answer is yes to the latter, meet your neighborhood childcare software, Illumine. Illumine is a one-stop solution for early education providers. We help you to streamline daycare franchise operations and establish a strong brand that can put you on the world map. Our app integrates the most important components of running your franchise, such as billing, attendance, parent communication, and assessment processes. Hundreds of daycare franchise owners and millions of parents trust Illumine. Sign up for a free 11-day app trial to see your daycare franchise business succeed.

FAQs About Starting a Daycare Franchise

Q 1. How much time does it take to start a daycare franchise? It is estimated to take nearly 60 working days to get a daycare franchise up and running. Q 2. How do you streamline daycare franchise payments? You can bid goodbye to daycare franchise payment hassles and ensure all your payments are made timely with Illumine’s childcare billing software. Q 4. How can I increase enrollments in my daycare franchise? You can increase enrollments in your daycare franchise by putting across the right message on multiple marketing channels.

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