Water Babies Franchise Cost, Revenue & Review 2026
- Investment
- $108K – $153K
- Disclosed sales
- partial, no system average
- SBA charge-off
- Not SBA-matched
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
Water Babies is a children's education franchise offering swim lessons and water safety for infants and toddlers. Franchisees run local operations, managing instructors, scheduling, and enrollment.
FranchiseVerdict summary · 2026
A Water Babies franchise requires a total initial investment of $108K – $153K, including a $55K franchise fee and an ongoing 10.0% royalty[2]. The 2025 FDD on file does not yield a unit-revenue figure we can publish. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Limited operating history: franchising since 2025. A system this young has fewer than three years of Item 20 outlet history and rarely enough SBA loans for a charge-off rate, so its grade rests on less evidence than an established system's. Read its Item 20 tables and talk to its first franchisees before relying on the grade. Other new franchisors
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
Evidence: partial✓ 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 scored5 of 5 headline figures on this page cite a page of the filing.
Overview
- Investment
- $108K – $153K
- 32nd pct Education
- Avg gross sales
- N/A
- Company-owned only2 territories
- Royalty
- 10.0%
- 65th pct Education
- Units
- 2
- 8th pct Education
- SBA charge-off
- N/A
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 $108K – $153K including a $55K franchise fee, 10.0% ongoing royalty.
- RETURNSItem 19 is an INCOME STATEMENT with NORMALISED expenses and a Net Operating Income line - profit, not sales - for two COMPANY-OWNED territories reporting $340,596 and $1,649,374 against combined 2024 Gross Revenue of $1,989,969. Item 20 Table No.1 shows ZERO franchised outlets in 2022, 2023 and 2024 against 2 company-owned, so this filing discloses no franchisee performance at all. Notes (3)-(8) to Table 2 state that labor was adapted and that IT, advertising and insurance were "normalized to represent a franchise operating two territories", with royalty imputed at 10% and the marketing fee at 2%, so the $957,213 Net Operating Income is pro-forma rather than an actual result. avg_gross_sales is correctly NULL and must stay NULL: an earlier note quoted a "$995K average", a FABRICATED MIDPOINT ($1,989,969 / 2) printed nowhere, averaging two territories that differ 4.8x.
- RISKVerdict C (Average), verdict score 45/100 (higher is better).
- GROWTHFlat: no net change in franchised outlets in the latest year (0 opened, 0 closed) (Item 20).
- DATAItem 19 does not yield a per-outlet annual revenue figure we can compare across brands. Ask franchisees directly for full unit-level revenue.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Water Babies US Franchise LLC
- Parent company
- Water Babies US TopCo LLC
- FDD Item 1, page 6 of the 2025 FDD
- Ultimate parent
- Water Babies Holdings Inc.
- FDD Item 1, page 6 of the 2025 FDD
- Predecessor
- Water Babies Group Limited (Water Babies UK)
- Prior franchisor entity
- CEO title
- CEO
- Howard Harrison
- Incorporated in
- Delaware
- HQ
- 115 E Pennsylvania Ave, Suite 16, Southern Pines, NC 28387
- Auditor
- Plante & Moran, PLLC
- Audited financials
Overview
About
- CEO
- Howard Harrison
- Headquarters
- NC
- Founded
- 1997
- FDD year
- 2025
- States available
- 1
Can you afford it, and what does the money buy?
Entry cost runs 33% below the typical education franchise.
Source: FDD 2025 · Items 5–7
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $55K | $55K |
| Working capital (3–6 mo) | $15K | $31K |
| Equipment, build-out, other | $38K | $68K |
| Total initial investment | $108K | $153K |
Source: Water Babies 2025 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
- $108K – $153K
- Top 40% of category vs category
- Liquid capital req'd
- $15K – $31K
- Middle of category vs category
- Franchise fee
- $55K – $55K
- Middle of category vs category
- Royalty
- 10.0%
- Tiered by sales volume · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 12.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 10.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $500 |
| Transfer fee | $15K |
| Renewal fee | $6K |
| Total fee load | 12.0% of rev |
What do units actually make?
Source: FDD 2025 · Item 19
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
No Item 19 revenue figure for Water Babies is on file. The return models need a revenue figure to start from, and the operating costs that turn gross sales into a profit are in no FDD. Enter your own and the calculator runs on your assumptions — nothing here is modelled until you do.
Returns model · single-unit ROIC
What would one Water Babies 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 annual revenue, 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.
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
Item 19 is an INCOME STATEMENT with NORMALISED expenses and a Net Operating Income line - profit, not sales - for two COMPANY-OWNED territories reporting $340,596 and $1,649,374 against combined 2024 Gross Revenue of $1,989,969. Item 20 Table No.1 shows ZERO franchised outlets in 2022, 2023 and 2024 against 2 company-owned, so this filing discloses no franchisee performance at all. Notes (3)-(8) to Table 2 state that labor was adapted and that IT, advertising and insurance were "normalized to represent a franchise operating two territories", with royalty imputed at 10% and the marketing fee at 2%, so the $957,213 Net Operating Income is pro-forma rather than an actual result. avg_gross_sales is correctly NULL and must stay NULL: an earlier note quoted a "$995K average", a FABRICATED MIDPOINT ($1,989,969 / 2) printed nowhere, averaging two territories that differ 4.8x.
Company-owned outlets only - not franchisee performance
Based on only 2 territories
- Item 19 type
- Financial Performance of company-owned territories
- Sample size
- 2 territories
- vs category median 16 · small
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 6 / 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.
Fee burden
Total ongoing fee load of 12.0% — above the Education median of 9.0%.
Disclosure
Item 19 does not yield a per-outlet annual revenue figure we can compare across brands.
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 Water Babies 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
- 2
- Opened
- 0
- 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
- N/A
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 0%
- vs corporate-owned
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 0
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 0
- 0.00 per open outlet · Item 20 Table 5
- Projected new
- 6
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 1 state 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.
1
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.
No SBA loan data available for this brand.
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
Pre-opening child swim franchisor (began franchising 2025) with 2 company-owned units and 0 franchised, net worth $330,000. No litigation, bankruptcy, or going-concern; audited financials and Item 19 disclosed. Limited history is the only concern.
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
None disclosed.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Plante & Moran, PLLC
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
Score breakdown · what drove the 45 / 100 verdict
- 01MINORBegan franchising 2025
- 02MEDItem 19 disclosed, audited, net worth $330,000
- 03HIGH0 litigation, no bankruptcy, no going-concern
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 12.0% 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 | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | Exclusive territory |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory sizeℹ | Population-based (1 per 50,000 children aged 9 and under) |
| 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 | 100 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 17 |
| Mandatory arbitration | Yes |
| Arbitration location | Southern Pines, North Carolina |
| Jury trial waiver | Yes |
| Governing law | North Carolina |
| Litigation count | 0 |
View Item 3 litigation summary
None disclosed.
Items 10, 11
Training & Operations
- Classroom training
- 55 hrs
- On-the-job training
- 56 hrs
- Ongoing training
- Required
- Field support
- 56 hrs/yr
- On-site visits per year
- Site selection
- franchisor-assisted (approves pool locations)
- Franchisor financing
- Not offered
- Item 10
- POS system
- Ada
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Ada
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Water Babies franchise?
The total investment to open a Water Babies franchise ranges from $108K – $153K, with an initial franchise fee of $55K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Water Babies franchise owners earn?
Item 19 of the Water Babies FDD discloses figures for part of the system but no single average across all outlets. These are gross sales figures, not profit; the Revenue section shows what the filing reports and on what basis. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns Water Babies?
Water Babies is franchised by Water Babies US Franchise LLC. Its parent company is Water Babies US TopCo LLC. The ultimate parent named in the FDD is Water Babies Holdings Inc.. Source: FDD Item 1, 2025 filing.
What is Item 19 in the Water Babies 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 Water Babies FDD and qualifies whose outlets they describe.
What is Water Babies's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Water Babies (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 Water Babies franchise locations are there?
As of their most recent FDD filing, Water Babies has 2 total units in the United States.
Is Water Babies a good franchise to buy?
FranchiseVerdict rates Water Babies as a C-grade franchise with a verdict score of 45 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
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.