Kiddie Academy FDD Item 19: Financial Performance Representations | What Franchisees Need to Know
Kiddie Academy’s FDD Item 19 is the section that every prospective franchisee turns to first: how much money can I make? The most recent data shows average gross revenue of $2,193,070 and average gross profit of $559,914 for mature locations. Those numbers look promising. But understanding what they actually mean for your specific investment requires careful analysis that goes well beyond reading the averages.
At Lopes Law LLC, we review Kiddie Academy FDDs for prospective franchisees, and Item 19 analysis is where we spend the most time with clients. The financial performance data is real, but the gap between gross profit and actual owner income is wider than most first-time franchisees expect. This guide explains how to read, interpret, and model Kiddie Academy’s Item 19 data.
What Is FDD Item 19 and Why Does It Matter?
Item 19 of the Franchise Disclosure Document is titled “Financial Performance Representations” and is governed by the FTC Franchise Rule (16 C.F.R. Part 436). Unlike most other FDD items, Item 19 is optional. Franchisors are not required to include financial performance data. If they choose to include it, the data must be factual, substantiated, and not misleading.
Kiddie Academy chooses to include Item 19 data, which is a positive signal. Franchisors that provide financial performance information allow prospective franchisees to make more informed investment decisions. However, the way the data is presented, what is included and what is excluded, significantly affects how useful it is for financial planning.
What Does Kiddie Academy’s Item 19 Actually Show?
The most recent Kiddie Academy FDD includes financial performance data for 280 mature franchised academies that had been open for at least 24 months. Here are the key figures:
| Metric | Value | Notes |
|---|---|---|
| Average Gross Revenue | $2,193,070 | 280 mature academies (open 24+ months) |
| Average Gross Profit | $559,914 | After labor, rent, misc. expenses |
| Gross Profit Margin | ~25.5% | Calculated from averages |
| Above-Average Revenue | 44% (124 of 280) | 56% earned below average |
| Above-Average Profit | 43% (121 of 280) | 57% earned below average |
What Gross Profit Includes and Excludes
The gross profit figure of $559,914 is calculated after deducting labor costs, occupancy costs (rent), and other miscellaneous operating expenses from gross revenue. This is a meaningful number because labor and rent are typically the two largest expense categories for a childcare center.
However, gross profit is not net profit and is not owner income. Several significant expenses are not deducted from the gross profit figure: the 7% royalty fee ($153,515 at the average revenue level), the 2% marketing fee ($43,861 at average revenue), debt service on construction loans or SBA loans used to fund the initial investment, technology platform fees, depreciation and amortization of the initial build-out investment, income taxes, and owner compensation.
Attorney’s note: At Lopes Law LLC, we model what we call the “owner’s adjusted income” by starting with the gross profit and subtracting the royalty, marketing fee, debt service, and estimated miscellaneous costs. For a Kiddie Academy franchise at the average performance level, the owner’s adjusted income before taxes and owner compensation typically falls in the range of $250,000 to $350,000. That is a solid return, but it is roughly half of the $559,914 gross profit figure that initially catches the eye.
How Should You Interpret the “Above Average” Percentages?
The FDD reports that 44% of mature academies exceeded the average gross revenue and 43% exceeded the average gross profit. This means 56% of locations earned below the average revenue and 57% earned below the average gross profit.
This distribution is typical of franchise systems where a relatively small number of high-performing locations pull the average upward. If you assume your center will perform at the average, you are statistically more likely to underperform than to meet or exceed that number. The median (50th percentile) provides a more realistic baseline for financial planning because it represents the actual middle of the distribution.
Reviewing a Kiddie Academy FDD Right Now?
At Lopes Law LLC, our $3,000 flat-fee FDD validation review includes a detailed financial analysis of Item 19 data, modeled against your specific market conditions. Free 20-minute consultation to get started.
What Financial Factors Does Item 19 Not Address?
Item 19 provides historical performance data but does not account for several factors that directly affect your specific investment outcome. Local market conditions vary dramatically. A Kiddie Academy in a high-income suburb with limited childcare competition will perform differently than one in a market with multiple competing centers. Real estate costs vary by region. A center in the Northeast or West Coast will face significantly higher rent than one in the Southeast or Midwest, reducing gross profit. The ramp-up period is not fully captured. Mature academy data (24+ months) does not show the losses or reduced profitability during the first two years when enrollment is building.
For a complete view of how to evaluate childcare franchise financials, read our analysis of Item 19 financial performance representations generally and see our FDD review guide. If you are considering exiting an existing franchise, learn about our franchise exit audit service.
How Does Kiddie Academy’s Financial Performance Compare?
When comparing Kiddie Academy’s Item 19 data against other childcare franchises, consider both the revenue and the fee structure. Goddard School reports average EBITDA of approximately $521,987. The comparison is complicated by differences in how each system defines and calculates profit metrics. At Lopes Law LLC, we normalize these figures by calculating a consistent metric, typically owner’s discretionary earnings, that allows direct comparison across franchise systems.
The total investment range is also relevant. Kiddie Academy’s investment range of $405,000 to $6,950,000 spans a wide band. Comparing the average gross profit against the midpoint of the investment range gives a rough return-on-investment estimate, but your specific investment amount and financing terms will determine your actual return.
Questions to Ask When Analyzing Kiddie Academy Item 19
- Median vs. average: What is the median revenue and profit? The median is more representative than the average for skewed distributions.
- Performance range: What are the highest and lowest performing locations? Understanding the range helps you assess downside risk.
- Geographic variation: Do the financial results vary by region? A national average may not reflect your local market conditions.
- Enrollment levels: What enrollment levels drive the average revenue? Can your proposed territory support those enrollment levels?
- Expense detail: What specific expenses are included in the gross profit calculation? Are there material costs excluded?
- Trend data: Are revenues and profits trending up, down, or flat over the past three years?
Important: The financial performance data discussed in this article is based on publicly available Kiddie Academy FDD information. Actual results vary significantly by location, market conditions, and operator skill. Item 19 data represents historical performance and is not a guarantee of future results. Always review the current FDD with a qualified franchise attorney before making any investment decision.
Frequently Asked Questions About Kiddie Academy FDD Item 19
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Last updated: March 12, 2026
Understand the Financial Picture Before You Invest
At Lopes Law LLC, our flat-fee FDD validation review includes detailed Item 19 analysis for the Kiddie Academy FDD. Free 20-minute consultation to get started.