Gymboree Play & Music
Bottom line
- Total investment $57K – $393K including a $45K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $255K/year (median $223K).
- Rated MODERATE with a risk score of 64/100. SBA loan default rate of 0.0% across 93 loans (below the industry average).
- System contracting at -11.1% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
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 Gymboree Play & Music unit return on the cash you put in?
Unlevered ROIC · per unit
13%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Gymboree Play & Music units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$344K
on $1.7M purchase
Total debt
$1.4M
SBA $0.9M + senior + seller note
Overview
About
Gymboree Play & Music franchisees operate early childhood music and movement centers serving ages 0–5. Day-to-day operations include leading structured music and sensory play classes, managing instructor staff, maintaining a proprietary music/equipment curriculum, coordinating parent drop-in and birthday parties, and handling front-desk/enrollment activities. Revenue derives from monthly class memberships, class packages, and special events.
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 · 16 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
Gymboree Play & Music exhibits severe distress signals: declining system (−9.1% YoY), going concern doubts, zero profitability transparency, and active litigation—this is a contracting brand with questionable franchisor solvency.
Score breakdown · what drove the 64 / 100 rating
- 01HIGHGoing Concern status is FALSE — franchisor financial viability is questioned
- 02MINORSystem declining sharply: 41 units with -9.1% YoY contraction indicates market rejection or operational failure
- 03MEDNo Item 19 (Average Unit Volume) disclosed — inability or unwillingness to share profitability data is a major transparency red flag
- 04HIGHActive litigation with $765,920 judgment against franchisee; franchisor pursuing collection through bankruptcy, suggesting cash flow desperation
- 05MEDWide investment range ($57K–$393K) with undisclosed net income creates opacity on actual ROI and unit economics
- 06MINOR6% royalty on gross receipts (not net) means franchisees pay fees even during losses; combined with declining unit count, suggests unit-level economics are deteriorating
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
69 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Gymboree Play & Music · FDD (2025) PDF