Children’s Lighthouse
Bottom line
- Total investment $5.9M – $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
5%
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
Children's Lighthouse franchisees operate full-service early childhood education centers (daycare, preschool, and pre-K programs) serving infants through kindergarten-age children. Day-to-day operations include managing licensed facilities, hiring and training educators, maintaining compliance with state childcare regulations, recruiting families, managing tuition billing, and maintaining curriculum standards across multiple classroom age groups.
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 · 10 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
Children's Lighthouse presents moderate-to-caution risk due to high capital requirements without net income transparency, anemic unit growth, prior litigation over licensing obstacles, and missing Item 19 financial data.
Score breakdown · what drove the 52 / 100 rating
- 01MEDHigh initial investment ($5.8M–$8.9M) with no disclosed net income data prevents ROI validation
- 02MINORMinimal system growth (3.0% YoY) with only 69 units suggests market saturation or retention issues
- 03HIGHLitigation history involving breach of contract and fraud allegations regarding licensing difficulties indicates operational/compliance risks
- 04MEDItem 19 (Financial Performance Representations) not disclosed, preventing income verification and franchisee profitability assessment
- 05MINORRoyalty structure heavily backloaded (3.5% to 7% at month 7) may strain cash flow during critical ramp-up period
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
71 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Children’s Lighthouse · FDD (2024) PDF