Childrens Lighthouse Schools Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$1,074,580 - $8,933,880
Franchise Fee
$50,000
Min Cash Required
$170,000
Total US Locations
69
Business Summary
Childrens Lighthouse Franchise Company operates early learning schools under the name Children's Lighthouse. These schools offer premium educational childcare, delivering academic, character-building, and social-emotional curriculums in a safe, nurturing, and fun environment for children ranging from six weeks to 12 years old. Franchisees are involved in developing new schools through either a Development Equity Program (where the franchisee manages site selection, financing, permitting, construction, opening, and operations with franchisor guidance) or a Build-to-Suit Lease Program (where a third-party developer handles land, permitting, and construction, while the franchisee manages financing, opening, and operations).
Corporate History
Childrens Lighthouse Franchise Company was incorporated in Texas on August 29, 2001, and began offering franchises for early learning schools since its inception in 2001. The company's founders, Mike Brown and Pat Brown, along with other family members, operated similar schools from August 1997 through September 2017. An affiliate, Brown Family IP LLC, formed in December 2020, owns the trademarks and system and licenses them to Childrens Lighthouse Franchise Company.
Financial Overview
Investment Range
$1,074,580 - $8,933,880
Franchise Fee (Low)
$50,000
Franchise Fee (High)
$85,000
Minimum Cash Required
$170,000
Royalty %
7%
Marketing %
0.5%
Equipment Costs (Low)
$521,580
Equipment Costs (High)
$634,000
Working Capital
$303,900
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Childrens Lighthouse Franchise Company appears financially healthy. The company's management and independent auditor concluded that there is no significant doubt about its ability to continue as a going concern due to positive income and cash flows from operations. The company reported net income of $5,946,340 in 2023, $4,918,745 in 2022, and $3,788,662 in 2021. Net cash provided by operating activities has also been consistently positive across these years, and current assets are significantly greater than current liabilities.
Financing Details
Childrens Lighthouse Franchise Company does not offer any direct or indirect financing to its franchisees, nor does it guarantee any franchisee notes, leases, or other obligations.
Performance Metrics
Total US Locations
69
Franchised Units
69
Corporate Units
0
Avg Square Footage
10,600
Franchising Since
2001
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
1
Litigation Summary
Childrens Lighthouse Franchise Company has disclosed one litigation case. In December 2014, former franchisees, Guiding Light Partners, Inc. and its owners, sued Childrens Lighthouse Franchise Company for breach of contract, negligent misrepresentation, fraud, and violations of the Texas Deceptive Trade Practices Act. They sought unspecified damages of at least $200,000. Childrens Lighthouse Franchise Company denied the allegations and settled the matter for $45,000 in September 2015.
Bankruptcy History
Childrens Lighthouse Franchise Company has no bankruptcy history to report.
Agreement Terms
Initial Term
20 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, Childrens Lighthouse Franchise Company franchisees must provide written notice of their intent to renew between 12 and 24 months before the current term expires. They must be in good standing, meaning they have complied with all material provisions of the agreement and owe no past due amounts. Franchisees must also have the right to remain in possession of the school premises for the 10-year renewal term. They are required to sign the then-current franchise agreement and all ancillary documents, which may include different terms for royalties and advertising fund contributions, and each principal must execute a personal guaranty. Additionally, franchisees must sign a general release of claims against Childrens Lighthouse Franchise Company and remodel, redecorate, or update their school to meet current brand standards at their own expense. Childrens Lighthouse Franchise Company may refuse renewal if the franchisee has repeatedly failed to make payments on time, been in material default (even if cured), or consistently ignored recommendations to improve enrollment and revenue.
Training & Support Program
Franchisor Assistance
Childrens Lighthouse Franchise Company provides extensive assistance to its franchisees. Before opening, the franchisor helps with site selection by designating a protected search area, offering guidelines, counseling, and on-site evaluations. They provide names of approved suppliers and proprietary prototype school plans and specifications. Initial training is provided to owners and school directors, along with on-site pre-opening training. The franchisor also assists with establishing the school's licensed capacity and uses the pre-opening marketing payment to arrange marketing services. After opening, Childrens Lighthouse Franchise Company offers on-site training for management teams within the first 30 days of operation. They provide Directors' Training for replacement school directors and ongoing operations consultation through school visits, meetings, seminars, or electronic materials. The franchisor may also offer continuing education programs and training, and it maintains and administers the advertising fund.
Initial Training Hours
120
Training Location
Fort Worth, Texas; or remote via live instruction
Ongoing Support
Childrens Lighthouse Franchise Company provides ongoing support to its franchisees after the school opens. This includes returning to the school within the first 30 days of operation to conduct on-site training for the management team. The franchisor also provides Directors' Training for replacement School Directors. Ongoing operations consultation is offered as deemed necessary through school visits, in-person or virtual meetings, seminars, or conferences, and through electronic or printed materials. Childrens Lighthouse Franchise Company may also offer continuing education programs and training related to school operations or promotion, which could be conducted online, at the franchisor's support center in Fort Worth, Texas, or at regional facilities. Franchisees are required to attend these programs.
Franchise Requirements
Ideal Candidate Profile
The ideal candidate profile for Childrens Lighthouse Franchise Company focuses on the Operating Principal, who must have at least 10% ownership in the franchised business. This individual is required to devote full-time best efforts to operating the school, including marketing and management, with the first 12 months of operations being on-site. The Operating Principal must be approved by the franchisor and responsible for supervising the School's Director. If a franchisee operates multiple schools, an additional individual may be required to provide multi-unit supervision. The franchisor recommends that the School Director not have any ownership in the business and not be the sole holder of the state's childcare license.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
Yes
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
Full-Time
Territory Type
Protected
Territory Size Requirements
Childrens Lighthouse Franchise Company defines territories based on location characteristics. For schools not in densely populated urban areas, the minimum territory is a 1.25-mile radius around the school, centered at its front door. This radius can vary based on the specific site, natural boundaries, nearby residences and businesses, and the territory's demographics. However, there is no minimum territory protection for schools located in areas where the population within a one-mile radius of the approved location is 125,000 or more.
Staffing Notes
Childrens Lighthouse Franchise Company requires specific staffing for its schools. Each school must have an Operating Principal with at least 10% ownership, who devotes full-time effort to operating, marketing, and supervising the school, including being on-site for the first 12 months. Additionally, each school must employ a full-time, state-qualified School Director responsible for day-to-day operations, an assistant director, and a curriculum coordinator. The number of teachers needed will vary based on enrollment levels, the age of the children, and state-mandated teacher-to-child ratios. The franchisor recommends that the School Director not hold any ownership in the business and not be the sole holder of the state's childcare license. For franchisees operating multiple schools, an additional individual may be required to provide multi-unit supervision.