Children's Franchising: Parents Are Paying!
I have kids. My daughter is four years old and she has me completely wrapped around her finger. When she asks me to buy something and looks at me a certain way, I typically pay the bill happily. This dynamic could be part of the trouble we have with the most recent generations work ethic and other concerns, but regardless this translates to good business for people selling just about anything to kids and families.
Children’s Franchises have been part of the mainstream franchise community for the past decade. The majority of the market was made up of product-based businesses which sold items to the public and did so from a retail location. As the market has evolved, so too have children’s franchises offering a wider range of services and products and through a myriad of different types of business models.
What is fun about the children’s franchise market segment is that the category tends to be quick to move towards new consumer trends and industry opportunities. Kids can be easily swayed with good marketing and advertising and parents dollars are soon to follow. In addition, when advertising convinces parents that something might be good for their children, spending is soon to follow.
When the kids market in franchising first started to gain market traction, retail was the primary focus. Brands such as USA Baby and Children’s Orchard hit the market in the 70’s and 80’s along with a wide range of other brands in the retail segment. Through the 80’s, 90’s and early 2000’s, more and more children’s retail franchises hit the market and had success scaling their brand into new areas. Today, the children’s segment of franchising is dominated by education, development and entertainment concepts. Entertainment franchises include the trampoline franchise market, kids parties and other service models with a focus on providing environments for children and families to have fun.
What might be incredible to some is how much money a typical family might spend on a child’s birthday party or special event; in some markets it isn’t uncommon to see birthdays where parents spend $1,000 to $2,000 on a party. No segment exhibits this characteristic more than the incredible trampoline franchise segment. The market was started by Sky Zone initially and today newer trampoline franchise brands have captured significant growth such as Launch Trampoline and Big Air who have models that produce average revenues per unit in excess of $2 Million to $3 Million. The parks are big, elaborate and offer an amazing experience to the families that visit, it’s no wonder people have been excited to invest in this market segment. Current market research indicates there are 450 current trampoline parks in the U.S. with an additional 500 to be opened in the coming five years.
The largest category of growth in children’s franchising is the education and development market. This market was originally headlined by large tutoring franchise brands such as Huntington and Sylvan. Over time, the market transitioned more to modern education practices with franchises in Montessori, early childhood development and specialized education utilizing STEM. Brands such as Primrose, Mathnasium and Kumon developed education and development models that were effective and resulted in enormous franchise growth globally.
Today, the movement for a mobile, workshop based model has become a significant portion of the children’s franchise market with brands like Bricks 4 Kidz, Tutor Doctor and Mad Science Group leading the way. New brands such as Montessori League Academy and Kids Learning Tech are examples of the countless new franchise innovations which deliver specialized childhood development programs through franchising. Ultimately, in today’s ever more competitive landscape for education and the fight to get into the top colleges and universities, parents are investing in their children’s education from the age of 3 or 4 on. This willingness to spend on children’s development early has helped support the growth and expansion in this category and doesn’t look to be slowing down any time soon.
Spending on children tends to be an economy-resistent market as parents will cut spending on their kids only when absolutely necessary. Certainly the willingness to spend on both entertainment and education for children increases rapidly when the economy is performing well, making the children’s franchise segment exceedingly attractive to investors. If you are like me with your own children, and spend at a moment’s notice on your children’s behalf you can understand why businesses with the right products or services enjoy a virtually endless market opportunity.
Christopher Conner is the President of Franchise Marketing Systems and has spent the last decade in the franchise industry working with several hundred different franchise systems in management, franchise sales and franchise development work. His experience ranges across all fields of franchise expertise with a focus in franchise marketing and franchise sales but includes work in franchise strategic planning, franchise research and franchise operations consulting.