Children's Lighthouse Franchise Cost, Revenue & Review 2026
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 $1.1M – $1.5M, including a $85K franchise fee and an ongoing 3.5% royalty[2]. Per the 2024 FDD, average unit revenue was $1.9M[2]. SBA 7(a) loans show a 0.0% charge-off rate across 63 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2024 FDD issuance
Overview
- Investment
- $1.1M – $1.5M
- 70th pct Education
- Avg gross sales
- $1.9M
- 38th pct Education
- Royalty
- 3.5%
- 1st pct Education
- Units
- 69
- 52nd pct Education
- SBA charge-off
- 0.0%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Education · color = vs category peers
Green = favorable by >10% vs Education avg · 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
- Total investment $1.1M – $1.5M including a $85K franchise fee, 3.5% ongoing royalty.
- Average unit revenue of $1.9M/year (median $1.9M).
- Verdict A (Strongest tier), verdict score 85/100 (higher is better). SBA loan charge-off rate of 0.0% across 63 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
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 107% above the typical education franchise.
Source: FDD 2024 · Items 5–7
Full Item 7 breakdown17 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Franchise Fee | $60K | $85K | |
| School Development Fee | $25K | $25K | |
| Lease Deposit | $50K | $150K | |
| Developer Deposit | $0 | $75K | |
| Project Management | $25K | $30K | |
| Utility and Security Deposits | $5K | $10K | |
| Furniture, Fixtures, and Equipment | $344K | $421K | |
| Playground Equipment | $178K | $213K | |
| Financing Costs | $5K | $28K | |
| Interim Interest | $40K | $70K | |
| 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) | $275K | $275K | |
| Total initial investment | $1.1M | $1.5M |
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
- $1.1M – $1.5M
- Bottom third — review vs category
- Liquid capital req'd
- $275K – $275K
- Bottom third — review vs category
- Franchise fee
- $85K – $85K
- Bottom third — review vs category
- Royalty
- 3.5%
- tiered · 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 124% above the education norm.
Source: FDD 2024 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$369K
19.0% margin
Unlevered ROIC
24%
EBITDA / total invested capital
Payback
4.2 yrs
cash-on-cash, unlevered
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 units
- vs category median 14 · large
- Range (low → high)
- $758K→$3.6M
- Cohort dispersion (min → max)
- Transparency tier
- revenue_only
- Categorical assessment of disclosure depth
- Reporting year
- 2024
- Fiscal year the figures cover
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 234 Education brands
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: 1.5x.
Fee burden
Total ongoing fee load of 53.0% — above the Education average of 10.6%.
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 averages
How Children's Lighthouse Compares
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
- 0.0%
- 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
3-year detail · Item 20
- Opened (3yr)
- 2
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 2
- Reacquired (3yr)
- 0
- Franchisor bought back
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 contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Available to sell in · Item 12
- Indiana
States where the franchisor is registered to sell new franchises (FDD registration filings).
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
- 0.0%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 100.0%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 24
- Defaults
- 0
- Typical loan rate
- 5.8%
- avg rate to borrowers
- Franchised industry avg
- 5.3%
- brand beats franchise avg ↓
- 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.
Premium insight
SBA Lending Report
Deep-dive into Children's Lighthouse's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 3 states
- Startup risk premium and job creation velocity
- 8-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
With a 0.0% charge-off rate across 63 loans, banks have historically viewed this brand favorably for lending.
What could kill this investment?
SBA loans charge off at 0.0% — 100% below the 16.0% national norm, i.e. lower lender-observed risk.
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.
Litigation (Item 3)
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.
Largest disclosed settlement: $45,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · AGL LLP (Dallas, TX)
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
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 85 / 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
- 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
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 |
| 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
86 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Children's Lighthouse · FDD (2024) PDF
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 $1.1M – $1.5M, 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.
What is Children's Lighthouse's franchise failure rate?
Based on SBA 7(a) loan data, Children's Lighthouse has a charge-off rate of 0.0% across 63 loans, meaning 0.0% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
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 A-grade franchise with a verdict score of 85 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. 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.