Children's Lighthouse
Bottom line
- Total investment $1.1M – $8.9M including a $85K franchise fee, 3.5% ongoing royalty.
- Average unit revenue of $1.9M/year (median $1.9M).
- Rated STRONG with a risk score of 52/100. SBA loan default rate of 0.0% across 103 loans (below the industry average).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Children's Lighthouse unit return on the cash you put in?
Unlevered ROIC · per unit
7%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Children's Lighthouse units return on equity?
Equity IRR · 5-yr
27.8%
3.41× MOIC
Year-1 DSCR
2.92×
EBITDA ÷ debt service
Equity required
$11.3M
on $23.3M purchase
Total debt
$12.0M
SBA $5.0M + senior + seller note
Overview
About
Franchisees operate licensed childcare and early education centers (typically serving ages 6 weeks to 12 years) with multi-classroom facilities, managing staff recruitment/training, regulatory compliance, parent billing/enrollment, curriculum delivery, and facility maintenance. Daily operations involve childcare delivery, parent communication, staff scheduling, and meeting state licensing requirements.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 15 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
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.
Score breakdown · what drove the 52 / 100 rating
- 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
- 04MINORWide investment range ($1.07M–$8.93M) indicates highly variable unit economics and unclear cost structure; franchisee outcomes likely unpredictable
- 05MINORHigh 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
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
84 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Children's Lighthouse · FDD (2024) PDF