Primrose Schools
Bottom line
- Total investment $743K – $8.6M including a $80K franchise fee, 7.0% ongoing royalty.
- Average unit revenue of $2.7M/year (median $2.7M). Estimated payback in 9.2 years.
- Rated STRONG with a risk score of 46/100. SBA loan default rate of 0.0% across 555 loans (below the industry average).
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 Primrose Schools unit return on the cash you put in?
Unlevered ROIC · per unit
8%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Primrose Schools units return on equity?
Equity IRR · 5-yr
30.1%
3.73× MOIC
Year-1 DSCR
2.68×
EBITDA ÷ debt service
Equity required
$8.4M
on $19.1M purchase
Total debt
$10.7M
SBA $5.0M + senior + seller note
Overview
About
Franchisees operate full-service early childhood education centers (preschools) serving ages 6 weeks through pre-K, managing daily curriculum delivery, staff hiring/training, parent communication, facility operations, and enrollment marketing. Revenue derives from tuition fees with centers typically operating year-round with extended hours.
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 · 26 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
Primrose Schools presents moderate-to-cautious risk due to undisclosed financial performance data, litigation history affecting the franchise system, slow growth trajectory, and high capital/ongoing fee requirements in a competitive childcare sector.
Score breakdown · what drove the 46 / 100 rating
- 01MEDNo Item 19 (Financial Performance Representations) disclosed — cannot independently verify claimed $508k average net income
- 02HIGHTrade secret misappropriation litigation against predecessor suggests IP vulnerability and potential operational disruption
- 03MINORParent company (Nestlé via Froneri acquisition chain) settlements on no-poaching and data privacy indicate compliance and HR culture risks
- 04MINORSlow unit growth (4.0% YoY) in early childhood education sector suggests market saturation or franchisee underperformance
- 05MINORHigh investment ceiling ($8.6M) with 7% royalty creates substantial ongoing cost burden requiring $1.9M+ annual revenue just to break even on royalties
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
43 numbers
One-time purchase · CSV download · Validation questions included