Kiddie Academy is one of the leading childcare franchise systems in the United States, with 345 locations as of 2025 and a curriculum-based approach to early childhood education. The initial franchise fee is $150,000, payable in installments, and total investments range from $405,000 to $6,950,000 depending on facility type and location. But the initial investment is only the beginning. FDD Item 6 is where Kiddie Academy discloses the ongoing fees that will affect your profitability for the entire term of the franchise agreement.

At Lopes Law LLC, we review Kiddie Academy FDDs regularly, and the fee structure disclosed in Item 6 is one of the most important sections for prospective franchisees to understand completely. This guide breaks down every fee category and shows you what the true cost of ownership looks like.

What Is FDD Item 6 and Why Does It Matter for Kiddie Academy?

Item 6 of the Franchise Disclosure Document is titled “Other Fees” and is required by the FTC Franchise Rule (16 C.F.R. Part 436). It must disclose every recurring fee, contribution, or payment obligation the franchisee will owe during the term of the franchise agreement. Item 5 covers the initial fees. Item 6 covers everything that comes after.

For Kiddie Academy specifically, Item 6 is critical because childcare operations generate revenue through tuition payments that accumulate gradually as enrollment builds. A new center may take 12 to 24 months to reach target enrollment. During that ramp-up period, the franchisee is paying ongoing fees on whatever revenue comes in. Understanding the fee structure helps you model cash flow during the critical early months.

What Fees Does Kiddie Academy FDD Item 6 Disclose?

Here is a breakdown of the major ongoing fee categories for Kiddie Academy franchisees:

The Royalty Fee: 7% of Gross Revenues

Kiddie Academy’s royalty fee is 7% of gross revenues. This rate is at the higher end of the childcare franchise spectrum but consistent with premium brands that offer comprehensive curricula and strong brand recognition. The 7% is calculated on gross revenues, meaning it applies to every dollar of tuition collected regardless of whether the center is profitable in a given month.

There is a notable incentive for new franchisees: those who sign during a scheduled orientation receive a 50% reduction in the royalty rate (3.5% instead of 7%) for the first six months after opening. This applies only to the first newly developed academy. This reduction can save a meaningful amount during the critical early months when enrollment is ramping up, but it is temporary. After six months, the full 7% rate applies.

Marketing Fee: 2% of Gross Revenues

The 2% marketing contribution supports national and regional marketing campaigns. Combined with the 7% royalty, the total fee-to-franchisor percentage is 9% of gross revenues. This combined rate is important for financial modeling because it represents the minimum ongoing payment to the franchise system before any other operating costs.

How Do Kiddie Academy Item 6 Fees Add Up Annually?

Kiddie Academy’s average revenue per academy is approximately $2,193,070 for mature locations (those open at least 24 months). Using this figure as a baseline, here is what the Item 6 fees look like annually:

That is approximately 10% to 11% of gross revenues going to Item 6 fees before the franchisee pays for staff, rent, utilities, supplies, food, or any other operating expense. When you factor in that labor costs in childcare typically run 50% to 60% of revenue and facility costs (rent, utilities, maintenance) add another 15% to 20%, the margins available to the owner-operator require careful management.

What Is the Introductory Royalty Reduction Worth?

The 50% royalty reduction during the first six months is a meaningful incentive, but its value depends entirely on how quickly the center ramps up enrollment. A center that opens with 30 children and grows to 80 in six months will generate less revenue during that period than a center that opens with 100 children. The royalty savings are proportional to revenue.

If a new center generates $500,000 in revenue during its first six months, the royalty savings from the 3.5% rate (versus 7%) would be $17,500. That is helpful but modest relative to the total investment of $405,000 to $6,950,000. Franchisees should not overweight this incentive in their investment analysis. For a complete view of FDD Item 19 financial performance data, read our analysis of Item 19 financial performance representations.

How Does Kiddie Academy’s Fee Structure Compare?

In the childcare franchise sector, fee structures vary considerably. Goddard School charges a 7% royalty plus a 4% marketing fee (11% combined). Primrose Schools has its own fee structure. When comparing across brands, always look at the combined royalty plus marketing percentage, technology and platform fees, insurance requirements and minimums, and any performance-based fee adjustments.

Kiddie Academy’s combined 9% (7% royalty + 2% marketing) is competitive within the premium childcare franchise segment. The introductory royalty reduction is an additional differentiator. However, the total cost of ownership depends on all fee categories, not just the headline rates.

Why Legal Review of Kiddie Academy Item 6 Is Essential

The fees disclosed in Item 6 represent contractual obligations for the full term of the franchise agreement. Signing without fully understanding these obligations means committing to a fee structure that will persist for years. A franchise attorney can model the total fee burden against realistic revenue projections based on your specific market, identify fees that may increase over the term, evaluate whether the introductory royalty reduction meaningfully affects your return timeline, and compare the total cost structure against competing childcare franchise systems.

At Lopes Law LLC, we review Kiddie Academy FDDs regularly. Our flat-fee FDD validation review is $3,000 and covers all 23 items of the FDD. For more on what that process involves, see our guide on what to expect from an FDD review. If you are considering exiting an existing franchise, learn about our franchise exit audit service.

Frequently Asked Questions About Kiddie Academy FDD Item 6

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Last updated: March 12, 2026