Challenge Island Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$58,465 - $74,050
Franchise Fee
$34,900
Min Cash Required
$4,000
Total US Locations
197
Business Summary
Challenge Island offers franchises for a mobile service business that provides distinctive challenge-based programs. These programs are designed to teach critical and creative thinking skills, problem-solving, and core STEAM (Science, Technology, Engineering, Art, Mathematics) principles to children aged 5 to 14+. The programs are delivered through various activities like after-school classes, workshops in schools, field trips, camps (including holiday and summer), and birthday parties held at different public venues.
Corporate History
Challenge Island Global, LLC was formed in Georgia on September 24, 2015. It operates under its corporate name and the brand name 'Challenge Island'. The company began offering Challenge Island franchises in January 2016. Its predecessor, CI Franchise Company, LLC, was formed in Florida on September 14, 2012, and had previously offered Challenge Island franchises from September 2012 until November 2015. Challenge Island Global, LLC acquired the rights to the brand and system from CI Franchise Company, LLC on December 9, 2015. The CEO, Sharon Duke Estroff, has owned a Challenge Island Business since September 2002.
Financial Overview
Investment Range
$58,465 - $74,050
Franchise Fee (Low)
$34,900
Franchise Fee (High)
$49,900
Minimum Cash Required
$4,000
Royalty %
7%
Marketing %
2%
Equipment Costs (High)
$1,500
Working Capital
$7,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The Franchise Disclosure Document for Challenge Island Global, LLC includes a special risk disclosure indicating that the franchisor's financial condition, as reflected in its financial statements, calls into question its financial ability to provide services and support to franchisees. However, the audited financial statements show that Challenge Island Global, LLC has positive and increasing Member's Equity (from $23,763 in 2023 to $305,479 in 2024), strong current assets exceeding current liabilities, and substantial net income for the fiscal years ending December 31, 2024 ($527,441) and 2023 ($443,673). The independent auditor issued an unqualified opinion on these financial statements.
Financing Details
Challenge Island Global, LLC does not offer any direct or indirect financing to its franchisees. Additionally, it does not guarantee any notes, leases, or other obligations for franchisees.
Performance Metrics
Total US Locations
197
Franchised Units
190
Corporate Units
7
Franchising Since
2012
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
2
Litigation Summary
Challenge Island Global, LLC has disclosed two historical litigation matters, both of which are now settled. The first involved its predecessor, CI Franchise Company, LLC, which faced allegations from the Commonwealth of Virginia in 2016 for selling franchises without proper registration and violating the Virginia Retail Franchising Act. CI Franchise Co. did not admit or deny the allegations, paid $60,000 in penalties, $5,000 for investigation costs, was temporarily enjoined from selling franchises in Virginia, and its officers had to complete compliance training. The second case, filed in February 2019 (originally in December 2018), was brought by a franchisee against Challenge Island Global, LLC and its executives. The franchisee alleged violations of the California Franchise Investment Law, fraud, negligent misrepresentation, and unfair business practices related to a franchise sale in April 2018. This lawsuit was settled in February 2019 for $145,000, with an agreed termination of the franchise agreement, mutual releases, and non-disparagement provisions.
Bankruptcy History
Challenge Island Global, LLC has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Challenge Island Global, LLC franchise agreement, franchisees must provide timely written notice of their intent to renew. They must refurbish any materials used for the franchised business, including vehicles, to meet the franchisor's current standards for new Challenge Island businesses. Franchisees must be in compliance with all terms of their agreement at the time of renewal and must have consistently met all financial obligations to the franchisor, its affiliates, and vendors throughout the term. They are required to sign the then-current form of franchise agreement, which may have materially different terms, and their direct and indirect owners must sign a personal guarantee. A renewal fee of $5,000 is also required, along with a mutual general release. Franchisees and their personnel must meet the franchisor's current qualification and training requirements, and demonstrate the right to remain in their accepted location.
Training & Support Program
Franchisor Assistance
Challenge Island Global, LLC provides several forms of assistance to its franchisees. Before opening, the franchisor provides initial training, designates the Protected Area, grants access to its Brand Manual, and provides a list of approved suppliers and vendors. Ongoing assistance includes providing access to proprietary products, offering additional initial training for successor and replacement Managers, conducting general meetings and seminars for franchisees (with mandatory annual conventions), and performing operational inspections to maintain quality. The franchisor also offers advice and written materials on managing the business, administers the Marketing Fund, maintains the Challenge Island website and social media presence, and approves franchisee marketing materials.
Initial Training Hours
24
Training Location
Atlanta, Georgia metropolitan area
Ongoing Support
Challenge Island Global, LLC provides continuous support to its franchisees after opening. This includes providing access to proprietary products developed for the Challenge Island system and offering additional initial training programs for successor and replacement Managers and other management personnel. The franchisor conducts meetings, seminars, and other activities regarding business operations, including a mandatory annual convention that franchisees must attend. Operational inspections of the franchised business and its programs are conducted in person or remotely. Challenge Island Global, LLC also provides advice and written materials on managing and operating the business, including new developments. Additionally, the franchisor administers the Marketing Fund and maintains the Challenge Island website and social media presence for the benefit of all businesses, and approves any advertising and promotional materials proposed by franchisees.
Franchise Requirements
Ideal Candidate Profile
Challenge Island Global, LLC seeks franchisees with strong financial resources, relevant educational backgrounds, and suitable work experience. Ideal candidates should possess a personality that fits well with the franchisor's team, along with the ability to collaborate effectively. The franchisor requires that one of the owners, designated as the Operating Owner, have at least a 51% voting and ownership interest (unless otherwise approved) and dedicate full-time effort to managing the business. If the Operating Owner does not take on full-time duties, a full-time manager must be employed. All key personnel involved in management must complete the franchisor's training program and be approved by Challenge Island Global, LLC.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Hands-On
Territory Type
Protected
Territory Size Requirements
Challenge Island Global, LLC designates franchisee territories by considering demographics and the number of public and private elementary schools (at least 30 in total), as well as preschools and middle schools, along with other factors relevant to operating a Challenge Island business.
Staffing Notes
Challenge Island Global, LLC requires that its franchised businesses always be under the active, full-time management of either the Operating Owner or an approved Manager who has successfully completed the initial training program. Franchisees must engage only professional, well-trained teachers, instructors, and staff who have passed necessary background checks and meet all applicable credentialing and licensure standards. Franchisees are also required to hire a competent full-service human relations (HR) professional to provide ongoing guidance on HR and personnel matters. All employees must adhere to a specified dress code and personal appearance standards, which may include branded apparel, while on the job for the franchised business.