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Primrose Schools Franchise Costs $3.1M – $6.3M (+ 2024 Profits)

Primrose Schools, founded in 1982, is a well-established leader in the early childhood education industry, headquartered in Atlanta, Georgia. The franchise began offering franchising opportunities in 1988. Primrose Schools is recognized for its unique educational approach called Balanced Learning®, which combines teacher-guided and child-initiated activities to foster learning through play and exploration.

Distinguished by its high standards in educational quality and care, Primrose Schools offers franchisees a proven business model in a financially rewarding and emotionally satisfying sector.

The franchise’s commitment to excellence has earned it accolades from various business publications, highlighting its status as a premier franchising opportunity.

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Initial investment

Type of ExpenditureAmount (for Permanent Lease Program)
Initial Fee$50,000 – $80,000
Real Estate Fee Deposit$25,000 – $25,000
Balance of Real Estate Fee$30,000 – $45,000
Security Deposit for Lease and Limited Rent Guarantee Fee$15,000 – $125,000
Other Real Estate and Development Costs$2,229,900 – $4,738,200
Utility Security Deposit$10,000 – $30,000
School Equipment and Supplies$222,000 – $340,000
Insurance$5,000 – $10,000
Initial Training and Opening Support Fee$35,000 – $35,000
Marketing, Advertising and Grand Opening$40,000 – $105,000
Transportation Vehicle$900 – $42,000
Licenses$4,000 – $7,000
Miscellaneous$10,000 – $45,000
Financing Cost$232,000 – $233,000
Additional Funds – 3 months$180,000 – $420,000
TOTAL$3,088,800 – $6,280,200

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Franchise fees & Royalties

Initial Franchise Fee

The initial franchise fee for a Primrose Schools franchise ranges from $50,000 to $80,000. This fee is payable in a lump sum upon signing the Franchise Agreement and is non-refundable.

Royalty Fee

The royalty fee is 7% of Gross Revenues. This fee is payable monthly, based on the revenues generated by the franchisee.

Marketing/Advertising Fee

The Brand Fund Fee is currently 2% of Gross Revenues, with the possibility to be increased up to a total of 3%. Additionally, local advertising requires a minimum expenditure of 1% of Gross Revenues for the preceding month or $1,000, whichever is greater.

Lease or Rent Fee

Lease or rent fees vary significantly based on location and terms negotiated with the landlord. The estimated initial investment for real estate and development costs ranges from $1,388,400 to $3,296,200.

Transfer Fees

The transfer fee is 40% of the then-current initial franchise fee for existing franchisees purchasing a new facility, plus all costs and expenses incurred by the franchisor. If the transfer does not involve a control transfer, the current transfer fee is $3,250 for each new owner added and $1,250 for each owner removed.

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Franchise pros and cons

The Pros:

  • Site selection assistance: The franchisor provides its franchisees with site selection guidance to identify a viable site for their schools. Also, it helps them with the designs and lease negotiations.
  • Marketing and public relationships: The franchisor offers its franchisees integrated marketing programs such as digital, online advertising, and co-op advertising, among others, to help spread the word about their schools and increase sales.
  • Third-party financing: Primrose Schools has relationships with third-party lenders to offer their franchisees financing to fund their startup costs, equipment, inventory, and payroll.
  • Exclusive territory protection: The franchisor allows its franchisees the right to operate their schools in an exclusive territory. Under the agreement, the franchisor or its affiliates do not operate a parallel Primrose School in the designated area.
  • Comprehensive training: The franchisor has a detailed training program consisting of 40 hours of on-the-job training and 119 hours of classroom training to train its franchisees on the best management practices and how to run a successful franchise. Also, it helps them with grand opening, security & procedures, and field operations.
  • Flexible designs: The franchisor offers its franchisees a variety of flexible franchise designs that can fit into any market and space such as constructing or converting a traditional freestanding one- or two-story building, leasing space, or renovating purchase or leased properties.

The Cons:

  • No absentee ownership: The franchise does not present a passive investment opportunity. Franchisees must be involved in the decision-making and day-to-day operations of their centers
  • Not a part-time business: The franchises must be open full-time for at least 40 hours per week.
  • Not a mobile-based business: The franchise cannot be operated from home or a vehicle. Franchisees are required to have a fixed office space, retail facility, or warehouse for their operations.

How to open a Primrose Schools Franchise

1: Assess Financial Requirements

  • Review Investment Costs: Prepare financially with an estimated initial investment ranging from $652,000 to $8 million.
  • Examine Fees: Be ready to pay a franchise fee as well as ongoing royalties and advertising fees as specified by Primrose Schools.

2: Submit a Franchise Application

  • Complete Application: Fill out the application form on the Primrose Schools franchise website detailing your financial status, business experience, and personal information.
  • Preliminary Approval: Await preliminary approval based on your financial capability and compatibility with the franchise’s goals.

3: Attend Discovery Day

  • Visit Headquarters: Travel to the corporate headquarters in Atlanta, GA, to meet with the Primrose Schools franchise team.
  • Learn About the Business: Gain insights into the franchise operations, support systems, and educational philosophy.

4: Site Selection and Development

  • Choose a Location: Work with Primrose’s real estate team to find a suitable location that meets demographic and market criteria.
  • Develop the Site: Follow guidelines provided by Primrose for constructing or adapting a building to suit a childcare and educational facility.

5: Secure Financing

  • Arrange Financing: Utilize Primrose’s relationships with national and regional lenders to secure financing for your investment.
  • Prepare Financial Documents: Develop a comprehensive business plan and financial projections with the help of Primrose’s finance team.

6: Complete Training Program

  • Initial Training: Participate in an extensive training program at Primrose’s headquarters which includes both classroom learning and hands-on operational training.
  • Ongoing Support: Benefit from continuous educational programs and operational support to ensure your school’s success.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.

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