Children’s Orchard Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Children's Orchard is a resale retail franchise that buys and sells gently used children's clothing, toys, and gear. Franchisees run the stores, managing buying, resale inventory, and customer service.
FranchiseVerdict summary · 2026
A Children’s Orchard franchise requires a total initial investment of $227K – $336K, including a $25K franchise fee and an ongoing 4.0% royalty[2]. Per the 2026 FDD, average unit revenue was $419K[2]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $227K – $336K
- 26th pct Retail
- Avg gross sales
- $419K
- Net sales2nd pct Retail
- Royalty
- 4.0%
- 4th pct Retail
- Units
- 13
- 11th pct Retail
- SBA charge-off
- N/A
Quick verdict · Retail · color = vs category peers
Green = favorable by >10% vs Retail 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
- COSTTotal investment $227K – $336K including a $25K franchise fee, 4.0% ongoing royalty.
- RETURNSAverage unit revenue of $419K/year (median $367K).
- RISKVerdict C (Average), verdict score 43/100 (higher is better).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Children's Orchard, LLC
- Parent company
- NTY Franchise Company, LLC
- Ultimate parent
- None disclosed
- Predecessor
- Children's Orchard, Inc. (COI)
- Prior franchisor entity
- CEO title
- President
- Ronald G. Olson
- CEO experience
- 35 yrs
- Years in role or industry
- Incorporated in
- DE
- HQ
- 13895 Industrial Park Blvd, Ste 100, Plymouth, MN 55441
- Auditor
- LB Carlson, LLP
- Audited financials
- Franchisor revenue
- $3.8M
- vs $3.8M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Affiliated brands
- NTY Clothing Exchange
- Clothes Mentor
- Device Pitstop
- BST Software Company
Other brands the franchisor or its parent operates (Item 1).
Overview
About
- CEO
- Ronald G. Olson
- Headquarters
- MN
- Founded
- 2014
- FDD year
- 2026
- States available
- 8
Can you afford it, and what does the money buy?
Entry cost runs 32% below the typical retail franchise.
Source: FDD 2026 · Items 5–7
Full Item 7 breakdown15 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $20K | $25K | |
| Leasehold Improvements | $21K | $50K | |
| Signs | $5K | $9K | |
| Fixtures and Supplies | $55K | $65K | |
| POS Software and POS System | $6K | $8K | |
| Inventory | $35K | $50K | |
| Deposits, Business Licenses and Permits | $7K | $15K | |
| Legal and Accounting | $0 | $4K | |
| Security | $3K | $5K | |
| Travel Expenses to Attend Training | $5K | $9K | |
| Pre-Opening Labor Expense | $10K | $15K | |
| Grand Opening Advertising | $12K | $16K | |
| Rent - 3 Months | $20K | $25K | |
| Miscellaneous Pre-opening Expenses | $14K | $20K | |
| Additional Funds - 3 Months | $15K | $20K | |
| Total initial investment | $227K | $336K |
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
- $227K – $336K
- Top 40% of category vs category
- Liquid capital req'd
- $15K – $20K
- Top 40% of category vs category
- Franchise fee
- $25K – $25K
- Top 40% of category vs category
- Royalty
- 4.0%
- percentage · typical 6–8%
- Ad fund
- $2,000 per year (flat National Marketing Fund fee, not a …
- Total fee load
- 4.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.0% of gross sales |
| Technology fee | $500 |
| Transfer fee | $8K |
| Renewal fee | $10K |
| Inventory (initial) | $35K – $50K |
| Total fee load | 4.0% of rev |
A 4.0% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 57% below the retail norm.
Reported as net sales, not gross sales
Source: FDD 2026 · 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
$34K
8.0% margin
Unlevered ROIC
11%
EBITDA / total invested capital
Payback
8.9 yrs
cash-on-cash, unlevered
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. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one Children’s Orchard unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
11%
Below the 30–60% attractive-franchise band
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%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 Children’s Orchard units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$84K
on $419K purchase
Total debt
$335K
SBA $0.2M + senior + seller note
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: 2026 FDD
Financial Performance
Reported as net sales, not gross sales
- Avg gross sales
- $419K
- Per unit, per year
- Median gross sales
- $367K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- Net Sales by quartile
- Sample size
- 13 outlets
- vs category median 47 · small
- Range (low → high)
- $257K→$753K
- Cohort dispersion (min → max)
- Quartile band
- $274K→$632K
- Bottom 25% → top 25%
- Transparency tier
- full
- Categorical assessment of disclosure depth
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 4 / 10
- vs category median 3 / 10 · above
Compared against 278 Retail 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 $419K/year in gross sales. Revenue-to-investment ratio: 1.5x.
Fee burden
Total ongoing fee load of 4.0% — below the Retail average of 8.9%.
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 contracting at -27.8% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Multi-unit rate
Only 1% of franchisees own multiple units. Could indicate challenging economics or a young system where operators haven't had time to expand.
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 Retail averages
How Children’s Orchard Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 13
- Opened
- 0
- Last reporting year
- Closed
- 2
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 15.4%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Multi-unit owners
- 1.0%
- Net growth (3-yr)
- -27.8%
- Net unit change over 3 years
- 3-yr CAGR
- -27.8%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 0
- Closed (3yr)
- 2
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
- Projected new
- 1
- Franchisor's next-year forecast
- Continuity rate
- 86.7%
- Units that stayed open
- Ceased ops
- 15.4%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 8 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
- Michigan
States where the franchisor is registered to sell new franchises (FDD registration filings).
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 2 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 2
- Loan volume
- $299K
- Median loan
- $150K
- average
- Charge-off rate
- N/A
- limited sample (2 loans) — rate not shown below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 2
- Defaults
- N/A
Explore lender portfolios on Bank Reports or regional data on State Reports.
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
Children's Orchard presents HIGH RISK due to a contracting unit base, substantial litigation history involving breach of contract and financial misrepresentation, zero net income transparency, and an unsustainably small franchise system.
Litigation (Item 3)
Two concluded arbitrations: (1) CSW Strategic Solutions v. NTY Franchise et al. (2020), settled $400,000 in August 2021; (2) Transcendent Business Holdings v. NTY Franchise et al. (2019), settled $650,000 in January 2020. Both involved claims of improper financial performance representations.
Largest disclosed settlement: $650,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · LB Carlson, LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: No
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: Yes
Score breakdown · what drove the 43 / 100 verdict
- 01MINORDeclining unit count: 13 units with -13.3% YoY contraction indicates system is shrinking, not growing
- 02HIGHTwo litigation settlements totaling $1.05M within recent history suggest systemic issues with contract enforcement and financial transparency
- 03MINORNo average net income disclosure despite $418,805 average revenue—inability or unwillingness to provide profitability data is a major transparency red flag
- 04MINORHigh initial investment ($226,700-$335,500) with only 4% royalty structure may indicate franchisor relies on upfront fees rather than franchisee success
- 05MED13-unit system is extremely small and vulnerable; franchisees have minimal peer support network and franchisor has limited resources
- 06MINOR10-year term locks franchisees into relationship with shrinking brand with no demonstrated path to profitability
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 4.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | exclusive |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory radius | 2 mi |
| Territory population | 50,000 |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 1 |
| Curable defaultsℹ | 2 |
| Mandatory arbitration | Yes |
| Arbitration location | Minneapolis, Minnesota |
| Governing law | MN |
| Litigation count | 2 |
View Item 3 litigation summary
Two concluded arbitrations: (1) CSW Strategic Solutions v. NTY Franchise et al. (2020), settled $400,000 in August 2021; (2) Transcendent Business Holdings v. NTY Franchise et al. (2019), settled $650,000 in January 2020. Both involved claims of improper financial performance representations.
Items 10, 11
Training & Operations
- Classroom training
- 49 hrs
- On-the-job training
- 18 hrs
- Training location
- Plymouth, MN, or a location we designate
- Ongoing training
- Required
- Field support
- 3 hrs/yr
- On-site visits per year
- Time to open
- 9 mo
- From signing to launch
- Site selection
- Franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Resale World
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Resale World
Item 20 · call current owners
Franchisee Contacts
20 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Children’s Orchard · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Children’s Orchard franchise?
The total investment to open a Children’s Orchard franchise ranges from $227K – $336K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Children’s Orchard franchise owners earn?
According to Item 19 of the Children’s Orchard FDD, the average gross sales per unit is $419K. The median is $367K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Children’s Orchard 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 Orchard FDD and qualifies whose outlets they describe.
What is Children’s Orchard's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Children’s Orchard (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 Orchard franchise locations are there?
As of their most recent FDD filing, Children’s Orchard has 13 total units in the United States, including 13 franchised units and 0 company-owned units.
Is Children’s Orchard a good franchise to buy?
FranchiseVerdict rates Children’s Orchard as a C-grade franchise with a verdict score of 43 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
Are you the franchisor?
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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.