Tierra Encantada Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Tierra Encantada is an early education franchise operating Spanish-immersion daycare and preschool centers. Franchisees run the schools, managing bilingual teachers, curriculum, enrollment, and licensing.
FranchiseVerdict summary · 2026
A Tierra Encantada franchise requires a total initial investment of $1.6M – $4.5M, including a $60K franchise fee. Per the 2026 FDD, average unit revenue was $3.0M[2]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $1.6M – $4.5M
- 76th pct Education
- Avg gross sales
- $3.0M
- n=234th pct Education
- Royalty
- N/A
- Units
- 16
- 36th pct Education
- SBA charge-off
- N/A
Quick verdict · Education · color = vs category peers
Green = favorable by >10% vs Education 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 $1.6M – $4.5M including a $60K franchise fee.
- RETURNSAverage unit revenue of $3.0M/year (median $3.0M). Note: this is gross profit, not take-home income.
- RISKVerdict A (Strongest tier), verdict score 70/100 (higher is better).
- FLAGRevenue data based on only 2 reporting units. Treat as directional, not definitive. Ask franchisees directly for current unit economics.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Tierra Encantada Franchising LLC
- Parent company
- Tierra Encantada LLC
- Ultimate parent
- VYB HoldCo, LLC
- CEO title
- Chief Executive Officer/Founder
- Kristen Denzer
- Incorporated in
- Minnesota
- HQ
- 2700 30th Avenue, Minneapolis, MN 55406
- Auditor
- Eide Bailly LLP
- Audited financials
- Franchisor revenue
- $518K
- vs $682K prior year
Overview
About
- CEO
- Kristen Denzer
- Headquarters
- MN
- Founded
- 2018
- FDD year
- 2026
- States available
- 2
Can you afford it, and what does the money buy?
Entry cost runs 357% above the typical education franchise.
Source: FDD 2026 · Items 5–7
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $60K | $60K |
| Working capital (3–6 mo) | $150K | $300K |
| Equipment, build-out, other | $1.3M | $4.1M |
| Total initial investment | $1.6M | $4.5M |
Source: Tierra Encantada 2026 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $1.6M – $4.5M
- Bottom third — review vs category
- Liquid capital req'd
- $150K – $300K
- Bottom third — review vs category
- Franchise fee
- $60K – $60K
- Middle of category vs category
- Royalty
- Greater of (i) 7% of Gross Sales or (ii) $500 per week
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Marketing / ad fund | 1.0% of gross sales |
| Technology fee | $398 |
| Transfer fee | $30K |
| Renewal fee | $5K |
| Total fee load | 8.0% of rev |
What do units actually make?
Average unit sales run 281% above the education norm.
Based on a sample of only 2
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
$487K
16.0% margin
Unlevered ROIC
15%
EBITDA / total invested capital
Payback
6.7 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 Tierra Encantada unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
15%
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 Tierra Encantada units return on equity?
Equity IRR · 5-yr
26.4%
3.23× MOIC
Year-1 DSCR
3.12×
EBITDA ÷ debt service
Equity required
$14.2M
on $27.4M purchase
Total debt
$13.2M
SBA $5.0M + 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
Based on a sample of only 2
- Avg gross sales
- $3.0M
- Per unit, per year
- Median gross sales
- $3.0M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- average/median AUV (gross sales), franchised centers 24+ months
- Sample size
- 2
- vs category median 17 · small
- Range (low → high)
- $2.7M→$3.4M
- Cohort dispersion (min → max)
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 7 / 10
- vs category median 4 / 10 · above
Compared against 204 Education 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 $3.0M/year in gross sales. Revenue-to-investment ratio: 1.0x.
Fee burden
Total ongoing fee load of 8.0% — below the Education average of 10.6%.
Disclosure
Transparency score 7/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence. Sample size of 2 units — treat as directional only.
Operator retention
System expanding at 100.0% CAGR over 3 years across 16 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 averages
How Tierra Encantada Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 16
- Opened
- 2
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 0.0%
- Company-owned
- 12
- Corporate units in the system
- % franchised
- 25%
- vs corporate-owned
- Net growth (3-yr)
- +100.0%
- Net unit change over 3 years
- 3-yr CAGR
- +100.0%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 2
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 2 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.
2
states with franchisees (per FDD Item 12)
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
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
- $3.0M
- Median loan
- $1.5M
- 50th percentile
- 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
- 1
- 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
Audited financials (Item 21)
Yes · Eide Bailly LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Score breakdown · what drove the 70 / 100 verdict
- 01MINORPositive net worth $82,101, net income $299,855
- 02MINORNo litigation, no bankruptcy, no distress
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 8.0% 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 | Population |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Minnesota |
| Litigation count | 0 |
Items 10, 11
Training & Operations
- Classroom training
- 84 hrs
- On-the-job training
- 20 hrs
- POS system
- Lineleader
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Lineleader
Item 20 · call current owners
Franchisee Contacts
18 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Tierra Encantada · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Tierra Encantada franchise?
The total investment to open a Tierra Encantada franchise ranges from $1.6M – $4.5M, with an initial franchise fee of $60K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Tierra Encantada franchise owners earn?
According to Item 19 of the Tierra Encantada FDD, the average gross sales per unit is $3.0M. The median is $3.0M. Important context: Based on a sample of only 2. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Tierra Encantada 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 Tierra Encantada FDD and qualifies whose outlets they describe.
What is Tierra Encantada's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Tierra Encantada (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 Tierra Encantada franchise locations are there?
As of their most recent FDD filing, Tierra Encantada has 16 total units in the United States, including 4 franchised units and 12 company-owned units. 2 new units were opened in the latest reporting year.
Is Tierra Encantada a good franchise to buy?
FranchiseVerdict rates Tierra Encantada as a A-grade franchise with a verdict score of 70 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.