Children's Lighthouse Franchise Cost, Revenue & Review 2026
- Investment
- $5.9M – $8.9M
- Disclosed sales
- $1.9M
- gross sales, not profit
- SBA charge-off
- Limited · 63 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Children's Lighthouse is an early education and childcare franchise serving infants through school-age kids. Franchisees run multi-classroom learning centers, managing curriculum, staff, enrollment, and state licensing compliance.
FranchiseVerdict summary · 2026
A Children's Lighthouse franchise requires a total initial investment of $5.9M – $8.9M, including a $85K franchise fee and an ongoing 3.5% royalty[2]. Per the 2024 FDD, average unit revenue was $1.9M[2]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: high - issued more than two years ago
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored8 of 8 headline figures on this page cite a page of the filing.
Overview
- Investment
- $5.9M – $8.9M
- 79th pct Education
- Avg gross sales
- $1.9M
- 29th pct Education
- Royalty
- 3.5%
- 2nd pct Education
- Units
- 69
- 58th pct Education
- SBA charge-off
- N/A
Quick verdict · Education · color = vs category peers
Green = favorable by >10% vs Education median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $5.9M – $8.9M including a $85K franchise fee, 3.5% ongoing royalty.
- RETURNSAverage unit revenue of $1.9M/year (median $1.9M).
- RISKVerdict B (Above average), verdict score 55/100 (higher is better).
- GROWTHPositive: net +2 franchised outlets in the latest year (2 opened, 0 closed); 24 signed but not yet open (Item 20).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Childrens Lighthouse Franchise Company
- Predecessor
- and Affiliates
- Prior franchisor entity
- CEO title
- President
- Michael Brown, Jr.
- Incorporated in
- TX
- HQ
- 101 South Jennings Avenue, Suite 306, Fort Worth, Texas 76104
- Auditor
- AGL LLP (Dallas, TX)
- Audited financials
- Franchisor revenue
- $9.6M
- vs $8.9M prior year
Affiliated brands
- Brown Family IP
Other brands the franchisor or its parent operates (Item 1).
Overview
About
- CEO
- Michael Brown, Jr.
- Headquarters
- TX
- Founded
- 2001
- FDD year
- 2024
- States available
- 9
Can you afford it, and what does the money buy?
Entry cost runs 3704% above the typical education franchise.
Source: FDD 2024 · Items 5–7
Full Item 7 breakdown16 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Franchise Fee | $60K | $85K | |
| Real Estate | $875K | $1.2M | |
| Real Estate Improvements and Construction Costs | $3.7M | $6.0M | |
| School Development Fee | $25K | $25K | |
| Furniture, Fixtures, and Equipment | $344K | $421K | |
| Utility and Security Deposits | $5K | $10K | |
| Playground Equipment | $178K | $213K | |
| Financing Costs | $204K | $316K | |
| Interim Interest | $160K | $286K | |
| Opening Training Fee | $15K | $25K | |
| Buses | $3K | $5K | |
| Pre-Opening Marketing Expenses | $35K | $35K | |
| Travel and Living Costs while Training | $4K | $6K | |
| Insurance and Professional Fees | $11K | $13K | |
| Agency License | $750 | $1K | |
| Additional Funds (3 months) | $278K | $333K | |
| Total initial investment | $5.9M | $8.9M |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $5.9M – $8.9M
- Bottom third — review vs category
- Liquid capital req'd
- $278K – $333K
- Bottom third — review vs category
- Franchise fee
- $85K – $85K
- Bottom third — review vs category
- Royalty
- 3.5%
- Tiered by sales volume · typical 6–8%
- Ad fund
- 0.5%
- typical 3–5%
- Total fee load
- 53.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 3.5% of gross sales |
| Marketing / ad fund | 0.5% of gross sales |
| Technology fee | $49 |
| Training fee | $25K |
| Transfer fee | $35K |
| Renewal fee | $0 |
| Total fee load | 53.0% of rev |
At 53.0% total fee load, roughly $1029K per year goes to the franchisor before you pay a single operating expense.
What do units actually make?
Average unit sales run 376% above the education norm.
Source: FDD 2024 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Children's Lighthouse until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$7.7M
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Children's Lighthouse unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2024 FDD
Financial Performance
- Avg gross sales
- $1.9M
- Per unit, per year
- Median gross sales
- $1.9M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross revenue
- Sample size
- 67 outlets
- vs category median 16 · large
- Range (low → high)
- $758K→$3.6MCited, not corroborated — printed on page 44 of the 2024 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Reporting year
- 2023
- Fiscal year the figures cover
- Source filing
- FDD 2024
- Disclosed in the 2024 filing, covering 2023
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 204 Education brands
Revenue is only 0.3x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $1.9M/year in gross sales. Revenue-to-investment ratio: 0.3x.
Fee burden
Total ongoing fee load of 53.0% — above the Education median of 9.0%.
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System expanding at 7.8% CAGR over 3 years across 69 units — operators are staying and new ones are joining.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Education medians
How Children's Lighthouse Compares
Category median of published Education brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2024 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 69
- Opened
- 2
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- N/A
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- +7.8%
- Net unit change over 3 years
- 3-yr CAGR
- +7.8%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 2
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 24
- 0.35 per open outlet · Item 20 Table 5
- Projected new
- 3
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 9 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
9
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 63
- Loan volume
- $109.8M
- Median loan
- $1.0M
- 50th percentile
- Charge-off rate
- Limited · 63 loans
- Limited SBA coverage: 63 loans, rate hidden until 10 have resolved and loans reach 2% of franchised units
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Limited · 63 loans
- 5-yr charge-off
- Limited · 63 loans
- Loans approved 2021+
- Active lenders
- 24
- Defaults
- 0
- Typical loan rate
- 5.8%
- avg rate to borrowers
- Franchised industry avg
- 5.3%
- n=2,945 loans
- Jobs supported
- 398
- 2.4 per loan
- Lender concentration
- 25%
- top lender's share
Franchise vs independent — in child day care services, franchised businesses charge off at 5.3% vs 13.0% for independents — franchising is associated with 59% lower SBA default risk in this category.
Vintage analysis
Children's Lighthouse charge-off rate by loan vintage
Top lenders financing Children's Lighthouse franchisees
Showing 3 of 24 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Children's Lighthouse from SBA 7(a) FOIA data.
- Principal loss rate
- 0.0%
- Avg SBA guarantee
- 77%
- Avg interest rate
- 5.83%
- Lender concentration
- 25.0%
- Job velocity
- 2.4 per $100K
- NAICS benchmark
- 2.3%
- NAICS 624410
- Jobs supported
- 398
Top SBA lendersTop lender holds 25% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | Trustmark Bank | 4 | $3.3M | 0.0% |
| 2 | Stellar Bank | 2 | $4.1M | 0.0% |
| 3 | First Financial Bank | 2 | $2.1M | 0.0% |
| 4 | First Bank | 2 | $4.0M | 0.0% |
| 5 | Celtic Bank Corporation | 1 | $488K | 0.0% |
| 6 | Business Loan Center, LLC | 1 | $1.6M | 0.0% |
| 7 | Synovus Bank | 1 | $150K | 0.0% |
| 8 | JPMorgan Chase Bank, National Association | 1 | $599K | 0.0% |
| 9 | Texas First Bank | 1 | $135K | 0.0% |
| 10 | SouthState Bank, National Association | 1 | $412K | 0.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| TXTexas | 13 | 0 | 0.0% |
| NCNorth Carolina | 2 | 0 | 0.0% |
| FLFlorida | 1 | 0 | 0.0% |
SBA 7(a) lending trend
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Moderate-to-high risk investment hampered by non-disclosure of profitability data, minimal system growth, prior fraud litigation, and significant capital requirements with unclear ROI visibility.
Why this reads harsher than the B grade: the grade weighs financial health, unit economics, unit growth, scale, legal, and transparency across the whole filing, while this summary lists individual flags without that weighting. The flags are worth checking with current owners; neither is investment advice.
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
Guiding Light Partners, Inc. v. Childrens Lighthouse Franchise Company (2014) - breach of contract, negligent misrepresentation, fraud, and Texas DTPA violations; settled for $45,000 in September 2015.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · AGL LLP (Dallas, TX)
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Audited statements of operations for fiscal years ended December 31, 2023, 2022, and 2021. 2023 total revenues of $9,596,982 comprise franchise fee revenue ($260,669), royalty revenue ($9,039,700), advertising fund revenue ($203,750), hosting fee revenue ($51,700), and other revenue ($41,163). Company has a stockholders' deficit; net worth is negative.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 55 / 100 verdict
- 01MINORNo Item 19 (Net Income) disclosure despite $1.9M average revenue — inability or unwillingness to substantiate profitability is a major transparency concern
- 02MINORSlow unit growth of only 3.0% YoY with 69 locations suggests market saturation or franchisee satisfaction issues in competitive childcare sector
- 03HIGH2014 litigation alleging fraud and negligent misrepresentation settled for only $45K in 2015 — suggests either weak claims or corporate unwillingness to litigate, raises questions about sales practices
- 04MINORHigh upfront costs ($1M+) with 20-year commitment in a labor-intensive, regulation-heavy industry with thin margins and high staff turnover risk
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 53.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2024 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 10 years |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 1 mi |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | No |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 3 years |
| Non-compete (miles)ℹ | 25 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 10 days |
| Curable defaultsℹ | 5 |
| Mandatory arbitration | Yes |
| Arbitration location | Fort Worth, Texas (AAA offices in city of principal business office) |
| Jury trial waiver | No |
| Governing law | TX |
| Litigation count | 1 |
View Item 3 litigation summary
Guiding Light Partners, Inc. v. Childrens Lighthouse Franchise Company (2014) - breach of contract, negligent misrepresentation, fraud, and Texas DTPA violations; settled for $45,000 in September 2015.
Items 10, 11
Training & Operations
- Classroom training
- 80 hrs
- On-the-job training
- 40 hrs
- Training location
- Fort Worth, Texas or remote via live instruction; on-site at franchisee's School
- Ongoing training
- Required
- Time to open
- 18 mo
- From signing to launch
- Site selection
- franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Procare
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Procare
Item 20 · call current owners
Franchisee Contacts
85 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Children's Lighthouse franchise?
The total investment to open a Children's Lighthouse franchise ranges from $5.9M – $8.9M, with an initial franchise fee of $85K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Children's Lighthouse franchise owners earn?
According to Item 19 of the Children's Lighthouse FDD, the average gross sales per unit is $1.9M. The median is $1.9M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Children's Lighthouse?
Children's Lighthouse is franchised by Childrens Lighthouse Franchise Company. Source: FDD Item 1, 2024 filing.
What is Item 19 in the Children's Lighthouse FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Children's Lighthouse FDD and qualifies whose outlets they describe.
What is Children's Lighthouse's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Children's Lighthouse (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Children's Lighthouse franchise locations are there?
As of their most recent FDD filing, Children's Lighthouse has 69 total units in the United States, including 69 franchised units and 0 company-owned units. 2 new units were opened in the latest reporting year.
Is Children's Lighthouse a good franchise to buy?
FranchiseVerdict rates Children's Lighthouse as a B-grade franchise with a verdict score of 55 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.