Primrose Schools FDD Item 19 is the section of the Franchise Disclosure Document that contains the financial performance representations for one of the largest early education and childcare franchise systems in the United States. With approximately 499 franchised locations and average gross revenues reported at approximately $2.63 million, Item 19 provides a data-rich starting point for prospective franchisees evaluating the Primrose Schools investment. At Lopes Law LLC, we review this data carefully because it shapes the financial expectations that drive the investment decision.

This guide explains what Primrose Schools discloses in Item 19, how to interpret the revenue and expense data provided, and what the numbers mean for the prospective franchisee’s bottom line.

What Is FDD Item 19 and Why Does It Matter for Primrose Schools?

Item 19 of any Franchise Disclosure Document is titled “Financial Performance Representations.” Under the FTC Franchise Rule (16 C.F.R. Part 436), franchisors are not required to include Item 19 data. However, if they choose to make financial performance claims, those claims must appear in Item 19 and must have a reasonable basis.

Primrose Schools includes detailed Item 19 data, which is a positive signal of transparency. The data typically covers average, median, lowest, and highest gross revenues for franchised locations, along with expense breakdowns for participating schools that submit the required financial data. This level of detail is more comprehensive than what many franchise systems provide.

At Lopes Law LLC, we consider the Primrose Schools Item 19 to be one of the more informative disclosures in the childcare franchise sector, though it still requires careful analysis to translate the reported figures into a realistic projection of owner income.

What Does Primrose Schools Disclose in Item 19?

Based on publicly available FDD information, Primrose Schools’ Item 19 includes several categories of data for franchised locations that were active throughout the calendar year. The 2025 FDD reports data for facilities operating during the full calendar year 2024.

Importantly, the expense data (including payroll and taxes, royalty and brand fund payments, occupancy costs, and EBITDA) is available for a subset of locations that submitted the required financial data, not for all 499 qualifying locations. This means the expense data may not be fully representative of all franchised locations.

How Should You Interpret the Revenue Quartiles?

The quartile breakdown is one of the most valuable features of Primrose Schools’ Item 19. Rather than showing a single average that can be skewed by outliers, the quartile data shows how performance is distributed across the system.

If the top 25% of schools generate significantly higher revenues than the bottom 25%, it tells you that location selection, market demographics, management quality, and operational maturity all play major roles in determining financial outcomes. It also tells you that the average figure does not represent what most franchisees actually experience.

When projecting your own potential revenue, consider which quartile most closely aligns with your market demographics, the maturity of your location (new schools ramp up over 2 to 3 years), and your operational experience in childcare.

What Does the Expense Data Reveal About Profitability?

The expense breakdown provided by Primrose Schools for the subset of submitting schools includes several key categories:

• Payroll and taxes: Typically the largest expense, representing 50% to 60% of gross revenue in the childcare industry.
• Royalty and brand fund fees: The 7% royalty plus 2% brand fund fee account for 9% of gross revenue.
• Occupancy expenses: Rent or mortgage, property taxes, utilities, and maintenance, typically 10% to 15% of gross revenue.
• Other operating expenses: Curriculum materials, food, supplies, insurance, and administrative costs.
• EBITDAR and EBITDA: The FDD may report earnings before interest, taxes, depreciation, amortization, and rent (EBITDAR) as well as EBITDA.

How Long Does It Take a Primrose School to Reach Average Revenue?

New childcare locations do not reach full enrollment capacity on opening day. The ramp-up period for a new Primrose School can take 2 to 3 years as enrollment builds through word-of-mouth, local marketing, and community reputation. During this ramp-up period, the school may be operating at a loss or at reduced profitability while still incurring the full royalty and fee obligations on whatever revenue it does generate.

Prospective franchisees should project cash flow needs for the ramp-up period separately from the mature performance reflected in Item 19 data. The average revenue figures in Item 19 typically reflect mature schools that have been operating for several years, not new openings.

What Item 19 Does Not Tell You

Even a comprehensive Item 19 disclosure like Primrose Schools’ has significant limitations:

• Geographic variation: Revenue varies significantly by market. Schools in affluent suburban areas with high demand for quality childcare may substantially outperform those in more competitive or lower-income markets.
• Owner time commitment: Item 19 does not disclose how many hours per week the owner works. Owner-operators who are on-site daily may achieve better results than absentee owners, but their time has an opportunity cost that is not reflected in the data.
• Debt service: The expense breakdown does not account for debt service on the initial investment, which can be the largest single expense for a newly acquired school.
• Capital reinvestment: The data does not account for ongoing capital expenditures needed to maintain the facility, replace equipment, and meet evolving franchisor standards.

Why Legal Review of Item 19 Is Critical

Item 19 data drives the investment decision more than any other single item in the FDD. A franchise attorney can help you interpret the quartile data in the context of your target market, model realistic cash flow projections that account for debt service and ramp-up, evaluate the expense breakdown to identify areas of concern, and compare Primrose Schools’ financial performance to competing childcare franchise systems. For additional context on franchise agreement provisions, see franchise agreement red flags to watch for and our guide on what to expect from an FDD review.

At Lopes Law LLC, our flat-fee FDD validation review is $3,000 and covers all 23 items of the Primrose Schools FDD. If you already own a franchise, our franchise exit audit can help you evaluate your current position.

Frequently Asked Questions About Primrose Schools FDD Item 19

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Last updated: March 12, 2026