Primrose Schools Franchise Cost, Revenue & Review 2026
- Investment
- $6.2M – $8.6M
- Disclosed sales
- $2.7M
- gross sales, not profit
- SBA charge-off
- 1.8%
- on 845 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Primrose Schools is a premium early-education franchise running preschools for children from infants through pre-K with a structured curriculum. Franchisees own and operate a school managing licensed teachers, enrollment, and daily care.
FranchiseVerdict summary · 2026
A Primrose Schools franchise requires a total initial investment of $6.2M – $8.6M, including a $50K – $80K franchise fee and an ongoing 7.0% royalty[2]. Per the 2025 FDD, average unit revenue was $2.7M[2]. SBA 7(a) loans show a 1.8% charge-off rate across 845 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: 2025 filing · Data extracted: · Last cited check: · Staleness risk: medium - a newer filing may exist
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 scored8 of 8 headline figures on this page cite a page of the filing.
Overview
- Investment
- $6.2M – $8.6M
- 80th pct Education
- Avg gross sales
- $2.7M
- 34th pct Education
- Royalty
- 7.0%
- 21st pct Education
- Units
- 525
- 79th pct Education
- SBA charge-off
- 1.8%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Education · color = vs category peers
Green = favorable by >10% vs Education 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 $6.2M – $8.6M including a $80K franchise fee, 7.0% ongoing royalty.
- RETURNSAverage unit revenue of $2.7M/year (median $2.7M), with an estimated 4% cash-on-cash return (based on EBITDA (Note 1) / Average).
- RISKVerdict A (Strongest tier), verdict score 79/100 (higher is better). SBA loan charge-off rate of 1.8% across 845 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHPositive: net +20 franchised outlets in the latest year (21 opened, 1 closed); 223 signed but not yet open (Item 20).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Primrose School Franchising SPE, LLC
- Parent company
- Primrose Holding Corporation
- FDD Item 1, page 11 of the 2025 FDD
- Ultimate parent
- Primrose Holding Corporation (PHC)
- FDD Item 1, page 11 of the 2025 FDD
- Predecessor
- Primrose School Franchising Company LLC (PSFC)
- Prior franchisor entity
- CEO title
- President
- Steven A. Clemente
- CEO experience
- 1999 yrs
- Years in role or industry
- Incorporated in
- Delaware
- HQ
- 3200 Windy Hill Road SE, Suite 1200E, Atlanta, GA 30339
- Auditor
- PricewaterhouseCoopers LLP
- Audited financials
- Franchisor revenue
- $104.2M
- Most recent fiscal year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
- CEO
- Steven A. Clemente
- Headquarters
- GA
- Founded
- 1988
- FDD year
- 2025
- States available
- 35
Can you afford it, and what does the money buy?
Entry cost runs 3704% above the typical education franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown14 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Fee | $50K | $80K | |
| Real Estate Fee Deposit | $25K | $25K | |
| Balance of Real Estate Fee | $30K | $45K | |
| Other Real Estate and Development Costs | $5.2M | $7.0M | |
| Utility Security Deposits | $10K | $30K | |
| School Equipment and Supplies | $313K | $383K | |
| Insurance | $5K | $20K | |
| Initial Training Fee | $35K | $35K | |
| Marketing, Advertising and Grand Opening | $40K | $105K | |
| Transportation Vehicle | $900 | $50K | |
| Licenses | $4K | $7K | |
| Miscellaneous | $10K | $45K | |
| Financing Cost | $258K | $310K | |
| Additional Funds – 3 months | $180K | $420K | |
| Total initial investment | $6.2M | $8.6M |
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
- $6.2M – $8.6M
- Bottom third — review vs category
- Liquid capital req'd
- $180K – $420K
- Bottom third — review vs category
- Franchise fee
- $50K – $80K
- Bottom third — review vs category
- Royalty
- 7.0%
- typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 9.0%
- vs 9–13% typical
- Payback period
- 26.4 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 7.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Training fee | $35K |
| Transfer fee | $32K |
| Renewal fee | $8K |
| Total fee load | 9.0% of rev |
What do units actually make?
Average unit sales run 569% above the education norm.
Source: FDD 2025 · 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 Primrose Schools 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 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
$7.7M
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
FDD-reported earnings
The FDD reports $509K as EBITDA (Note 1) / Average. This is a disclosed figure, not our estimate — we publish no modelled profit for Primrose Schools.
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 Primrose Schools 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 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 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: 2025 FDD
Financial Performance
- Avg gross sales
- $2.7M
- Per unit, per year
- Median gross sales
- $2.7M
- Avg ebitda (note 1) / average
- $509K
- Reported as EBITDA (Note 1) / Average in FDD Item 19
- Cash-on-cash
- 3.8%
- Based on EBITDA (Note 1) / Average / investment midpoint
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- annual gross revenues
- Sample size
- 499 outlets
- vs category median 16 · large
- Range (low → high)
- $618K→$6.7MCited, not corroborated — printed on page 86 of the 2025 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Quartile band
- $1.8M→$3.8M
- Bottom 25% → top 25%
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 8 / 10
- vs category median 4 / 10 · above
Compared against 204 Education brands
Revenue is only 0.4x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
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 $2.7M/year in gross sales. Revenue-to-investment ratio: 0.4x.
Fee burden
Total ongoing fee load of 9.0% (near the Education median).
Disclosure
Transparency score 8/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System expanding at 12.9% CAGR over 3 years across 525 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 medians
How Primrose Schools Compares
Category median of published Education 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 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 525
- Opened
- 21
- Last reporting year
- Closed
- 1
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 0.2%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 1%
- vs corporate-owned
- Net growth (3-yr)
- +12.9%
- Net unit change over 3 years
- 3-yr CAGR
- +12.9%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 30
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 223
- 0.42 per open outlet · Item 20 Table 5
- Projected new
- 35
- Franchisor's next-year forecast
- Transfer rate
- 5.7%
- Owners selling to other franchisees
- Continuity rate
- 99.8%
- Units that stayed open
- Ceased ops
- 0.2%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 35 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
35
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 845
- Loan volume
- $1.6B
- Median loan
- $2.7M
- 50th percentile
- Charge-off rate
- 1.8%
- on 845 loans · 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
- 0.0%
- Loans approved 2021+
- Active lenders
- 71
- Defaults
- 8
- Typical loan rate
- 5.8%
- avg rate to borrowers
- Franchised industry avg
- 5.3%
- brand beats franchise avg ↓
- Jobs supported
- 11,115
- 1.3 per loan
- Lender concentration
- 14%
- top lender's share
Borrower mix: 64% went to startups / new businesses, 36% to established operators
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
Primrose Schools charge-off rate by loan vintage
Top lenders financing Primrose Schools franchisees
Showing 3 of 71 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.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Primrose Schools from SBA 7(a) FOIA data.
- Principal loss rate
- 0.0%
- Avg SBA guarantee
- 75%
- Avg interest rate
- 5.80%
- Lender concentration
- 14.3%
- Job velocity
- 1.3 per $100K
- Startup risk premium
- 0.0pp
- NAICS benchmark
- 2.3%
- NAICS 624410
- Jobs supported
- 11,115
Top SBA lendersTop lender holds 14% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | Meadows Bank | 51 | $122.4M | 0.0% |
| 2 | Live Oak Banking Company | 49 | $149.3M | 0.0% |
| 3 | TD Bank, National Association | 31 | $48.1M | 0.0% |
| 4 | Wells Fargo Bank National Association | 31 | $88.5M | 0.0% |
| 5 | Regions Bank | 23 | $35.6M | 0.0% |
| 6 | PNC Bank, National Association | 22 | $68.6M | 0.0% |
| 7 | Paragon Bank | 15 | $42.3M | 0.0% |
| 8 | SouthState Bank, National Association | 15 | $30.2M | 0.0% |
| 9 | Customers Bank | 15 | $41.0M | 0.0% |
| 10 | Bank Five Nine | 15 | $8.8M | 0.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| TXTexas | 70 | 0 | 0.0% |
| GAGeorgia | 38 | 0 | 0.0% |
| FLFlorida | 32 | 0 | 0.0% |
| NCNorth Carolina | 22 | 0 | 0.0% |
| COColorado | 18 | 0 | 0.0% |
| NJNew Jersey | 16 | 0 | 0.0% |
| VAVirginia | 14 | 0 | 0.0% |
| OHOhio | 13 | 0 | 0.0% |
| ILIllinois | 11 | 0 | 0.0% |
| MAMassachusetts | 11 | 0 | 0.0% |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
With a 1.8% charge-off rate across 845 loans, banks have historically viewed this brand favorably for lending.
What could kill this investment?
SBA loans charge off at 1.8% — 89% 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
Large established system (since 1988, 525 units) with one vendor-initiated trade-secret suit against the predecessor, not franchisee-driven. Positive net worth $6,000,000 on $104.2M revenue, audited, Item 19 disclosed (avg gross sales $2,728,570), growing +12.9%. No bankruptcy or going-concern.
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
Three cases disclosed: (1) Primula Management, LLC v. Primrose School Franchising Company LLC (pending, filed 3/3/2025, U.S. District Court Southern District of New York) - trade secret misappropriation, breach of contract, tortious interference, unjust enrichment claims; Franchisor initially named but removed from Amended Complaint filed 4/11/2025; Predecessor has Motion to Dismiss pending as of 4/25/2025. (2) Multi-state settlement with Arby's Restaurant Group, Inc. (affiliate) regarding no-poaching provisions in franchise agreements (settled 3/11/2019, 11 states). (3) Multi-state settlement with Dunkin' Brands, Inc. (affiliate) regarding no-poaching provisions in franchise agreements (settled 3/14/2019, 13 states/jurisdictions).
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · PricewaterhouseCoopers LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- 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 79 / 100 verdict
- 01MINORSingle vendor-initiated suit against predecessor (routine for system size)
- 02MINORNet worth $6M on $104M revenue, 525 units
- 03MEDAudited, Item 19 disclosed, +12.9% growth
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 9.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · 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 | 2 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory sizeℹ | Development Area (no minimum size specified) transitioning to Designated Area post-opening |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 5 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 17 |
| Curable defaultsℹ | 5 |
| Mandatory arbitration | Yes |
| Arbitration location | Atlanta, Georgia |
| Jury trial waiver | Yes |
| Governing law | Georgia |
| Litigation count | 4 |
View Item 3 litigation summary
Three cases disclosed: (1) Primula Management, LLC v. Primrose School Franchising Company LLC (pending, filed 3/3/2025, U.S. District Court Southern District of New York) - trade secret misappropriation, breach of contract, tortious interference, unjust enrichment claims; Franchisor initially named but removed from Amended Complaint filed 4/11/2025; Predecessor has Motion to Dismiss pending as of 4/25/2025. (2) Multi-state settlement with Arby's Restaurant Group, Inc. (affiliate) regarding no-poaching provisions in franchise agreements (settled 3/11/2019, 11 states). (3) Multi-state settlement with Dunkin' Brands, Inc. (affiliate) regarding no-poaching provisions in franchise agreements (settled 3/14/2019, 13 states/jurisdictions).
Items 10, 11
Training & Operations
- Classroom training
- 119 hrs
- On-the-job training
- 24 hrs
- Training location
- On-site and corporate
- Ongoing training
- Required
- Site selection
- franchisor
- Franchisor financing
- Offered
- Item 10
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
715 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 Primrose Schools franchise?
The total investment to open a Primrose Schools franchise ranges from $6.2M – $8.6M, with an initial franchise fee of $80K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Primrose Schools franchise owners earn?
According to Item 19 of the Primrose Schools FDD, the average gross sales per unit is $2.7M. The median is $2.7M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Primrose Schools?
Primrose Schools is franchised by Primrose School Franchising SPE, LLC. Its parent company is Primrose Holding Corporation. The ultimate parent named in the FDD is Primrose Holding Corporation (PHC). Source: FDD Item 1, 2025 filing.
What is Item 19 in the Primrose Schools 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 Primrose Schools FDD and qualifies whose outlets they describe.
What is Primrose Schools's franchise failure rate?
Based on SBA 7(a) loan data, Primrose Schools has a charge-off rate of 1.8% across 845 loans, meaning 1.8% 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 Primrose Schools franchise locations are there?
As of their most recent FDD filing, Primrose Schools has 525 total units in the United States, including 525 franchised units and 0 company-owned units. 21 new units were opened in the latest reporting year.
Is Primrose Schools a good franchise to buy?
FranchiseVerdict rates Primrose Schools as a A-grade franchise with a verdict score of 79 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.