Children’s Orchard Franchise Cost, Revenue & Review 2026
- Investment
- $227K – $336K
- Disclosed sales
- $419K
- gross sales, not profit
- SBA charge-off
- Under 10 loans (2)
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 →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: low - issued within the last 12 months
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 scored7 of 7 headline figures on this page cite a page of the filing.
Overview
- Investment
- $227K – $336K
- 26th pct Retail
- Avg gross sales
- $419K
- Net sales3rd pct Retail
- Royalty
- 4.0%
- 3rd 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 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 $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).
- GROWTHNegative: net -2 franchised outlets in the latest year (0 opened, 2 closed); 2 signed but not yet open (Item 20).
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
- FDD Item 1, page 8 of the 2026 FDD
- 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).
Same owner · FDD Item 1, page 8
1 other brand on this site name NTY Franchise Company, LLC as parent or ultimate parent in their own FDD.
Grouped by the owner's name as each filing prints it (this page: the 2026 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
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 16% 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%
- 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 net 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 48% below the retail norm.
Reported as net sales, not gross sales
Source: FDD 2026 · 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 Orchard 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 ad fund rate, 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
$299K
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 Orchard 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 ad fund rate, 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 ad fund rate, 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: 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 46 · small
- Range (low → high)
- $257K→$753KCited, not corroborated — printed on page 35 of the 2026 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Quartile band
- $274K→$632K
- Bottom 25% → top 25%
- 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 median of 8.0%.
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 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 medians
How Children’s Orchard Compares
Category median of published Retail 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 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
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 0
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 2
- 0.15 per open outlet · Item 20 Table 5
- 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).
Where the owners are · Item 20 owner list
13 current owners across 8 states.
- CA 3
- MA 3
- MI 2
- AR 1
- NH 1
- NV 1
- TN 1
- WI 1
Counts only, from the list the franchisor prints in Item 20; 7 entries carry no state. Names and phone numbers are for your own due diligence and are not shown here.
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
- Under 10 loans (2)
- Insufficient SBA coverage: 2 loans, rate hidden below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Under 10 loans (2)
- 5-yr charge-off
- Under 10 loans (2)
- 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)
Subject: the franchisor is a named party (defendant).
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.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · LB Carlson, LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Item 21 includes audited financial statements of the franchisor's affiliate/guarantor Clothes Mentor, LLC (as of Dec 31, 2025/2024), not the franchisor Children's Orchard, LLC, whose separate statements are not included. Total revenue comprises franchise fees, royalty fees, and marketing fund contributions; interest income of $23,515 is reported separately as other income.
ⓘ 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 territory |
| 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
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. Important context: Reported as net sales, not gross sales. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Children’s Orchard?
Children’s Orchard is franchised by Children's Orchard, LLC. Its parent company is NTY Franchise Company, LLC. Source: FDD Item 1, 2026 filing.
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). 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.