Gymboree Play & Music Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$56,250 - $389,100
Franchise Fee
$15,000
Total US Locations
45
Business Summary
Gymboree Play & Music® Centers offer non-therapeutic sensory-motor child programs, including music and art programs, exercise, birthday parties, and story line parties for infants and children up to age 5, as well as programs for parents. Gymboree Play & Music® offers several models: the full-scale Play & Music Center with a play floor and a secondary classroom, a smaller Play & Music Mini Center, a Metro Play Center with a play floor but no secondary classroom, a Metro Play Mini Center, and a Mobile Play Center which operates in community centers and other recreation areas without a dedicated facility.
Corporate History
Gymboree Play & Music's origins trace back to Joan Barnes, who began operating a sensory-motor play program for children in 1976 under the name Kindergym of California. The Gymboree Corporation, a predecessor, was incorporated in 1979 after acquiring Ms. Barnes' businesses. GPPI, Inc. itself was incorporated in California in July 1994 as a wholly-owned subsidiary of The Gymboree Corporation. In March 1995, GPPI, Inc. assumed all franchise rights and obligations. In July 2016, Zeavion Holding Pte. Ltd. acquired GPPI, Inc., and intellectual property, including certain Proprietary Marks, were sold to Zeavion, which then licensed rights back to GPPI for its use and its franchisees' use. Following this acquisition, the company changed its legal name to GPPI, Inc. Gymboree Play & Music has offered franchises since May 1995.
Financial Overview
Investment Range
$56,250 - $389,100
Franchise Fee (Low)
$15,000
Franchise Fee (High)
$45,000
Royalty %
6%
Marketing %
3.25%
Equipment Costs (Low)
$8,400
Equipment Costs (High)
$203,700
Working Capital
$22,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Gymboree Play & Music reported income from operations of $278,474 in 2023 but has an accumulated deficit of $26,633,709 as of December 31, 2023. This deficit includes significant goodwill impairment losses of $13,925,182 recorded in 2021 and $9,678,000 in 2017 due to the economic climate and transfer of intellectual property. To address financial sustainability, Gymboree Play & Music's management has implemented a plan to leverage its parent company's (Zeavion Holding Pte. Ltd.) global platform and resources to reduce operating expenses and increase revenue. The parent company has committed to supporting Gymboree Play & Music through at least fiscal year 2025 to help sustain operations.
Financing Details
Gymboree Play & Music does not offer any direct or indirect financing to its franchisees. Additionally, it does not guarantee any notes, leases, or other financial obligations with third parties on behalf of franchisees.
Performance Metrics
Total US Locations
45
Franchised Units
44
Corporate Units
1
Avg Square Footage
2,250
Franchising Since
1995
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
1
Litigation Summary
Gymboree Play & Music is currently involved in one legal dispute with a former franchisee, Mary Ann O'Neill, and her companies. The dispute originated with GPPI, Inc. filing a lawsuit in federal court in California on June 22, 2022, seeking damages for the defendants' failure to pay royalties and other amounts due under five franchise agreements in New York. Later, on August 30, 2022, GPPI, Inc. filed a new action in New York, asserting claims for breach of contract, violations of the New York Uniform Voidable Transactions Act, and fraud. Mary Ann O'Neill subsequently filed for Chapter 11 bankruptcy in November 2022. In March 2024, GPPI, Inc. was granted a default judgment by the Bankruptcy Court for $765,920.13 plus post-judgment interest, and Gymboree Play & Music is participating as a creditor in the ongoing bankruptcy proceeding.
Bankruptcy History
Gymboree Play & Music has no bankruptcy information required to be disclosed in this item.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, Gymboree Play & Music franchisees must provide written notice of their intent to renew between six and twelve months before the agreement expires. Before the expiration date, they must address any identified deficiencies and renovate and modernize their location to meet the then-current brand standards, including purchasing new Play Equipment and updating signs, furnishings, fixtures, and decor, all at their own expense. Franchisees must also be in full compliance with all terms of their franchise agreement and any other agreements with Gymboree Play & Music, satisfy all monetary obligations owed to the franchisor and its affiliates, and maintain the right to possess their approved location for the new 10-year term. They will need to sign Gymboree Play & Music's then-current franchise agreement, which may have different terms, and execute a general release of claims against the franchisor. Additionally, franchisees must comply with current qualification and training requirements, potentially including retraining programs for their personnel, and pay a renewal fee equal to 10% of the then-current initial franchise fee.
Training & Support Program
Franchisor Assistance
Gymboree Play & Music provides pre-opening assistance with site selection guidelines and consultation, along with initial training for franchisees and their Operations Managers. It also furnishes templates for advertising materials and designates or approves suppliers for required equipment and program aids. The franchisor may also establish and administer a Brand Fund for brand promotion. After opening, Gymboree Play & Music offers ongoing advice, assistance, and written materials covering operations, services, teaching methods, products, and marketing techniques. It continues to designate or approve suppliers for necessary equipment and products. The brand manages a Brand Fund that supports national, regional, and electronic advertising, website and social media development, and various promotional programs. Franchisees are required to contribute to this fund and participate in local marketing efforts. Gymboree Play & Music may also establish regional advertising cooperatives. The franchisor specifies required computer systems and software, enabling remote data retrieval from franchisee systems. Franchisees, their Operations Managers, and teachers are required to attend regional training sessions, teacher training programs, and annual franchisee meetings, with franchisees covering their own expenses for these events.
Initial Training Hours
60
Training Location
Corporate headquarters in San Mateo, California; with virtual training also offered.
Ongoing Support
After opening their centers, Gymboree Play & Music franchisees receive ongoing advice, assistance, and written materials from the franchisor covering operations, services, teaching methods, products, and marketing techniques. The franchisor also designates or approves suppliers for equipment and program aids. Franchisees contribute to and benefit from a Brand Fund, which is managed by Gymboree Play & Music to cover costs for national and regional advertising, public relations, website maintenance, social media engagement, and the development of new products and services. Franchisees are required to attend regional training sessions, teacher training programs, and annual franchisee meetings to stay updated on new programming ideas and concepts. Additionally, Gymboree Play & Music specifies the required computer systems and software, and has the ability to remotely retrieve data from franchisee systems to monitor operations.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
full-time
Territory Type
limited
Territory Size Requirements
Gymboree Play & Music defines its franchise territories in various ways depending on the center type. For Play & Music Centers and Metro Play Centers, the territory size can vary based on factors such as the number of sites a franchisee commits to develop, the number of children in the vicinity, and other geographic, socioeconomic, and psychographic factors. These territories may be described using county lines, city lines, zip codes, borders of state parks and recreation areas, other municipal boundaries, as well as natural boundaries like rivers and man-made boundaries like railroad tracks and highways. For fixed locations, territories typically range from a 2-mile radius in urban areas to a 10-mile radius in suburban or rural areas, but can be less than a 2-mile radius in densely populated locations. Mobile Play Center territories are also defined by similar geographic and demographic factors, including county lines and zip codes.
Staffing Notes
Gymboree Play & Music franchisees are solely responsible for hiring, supervising, and training all employees at their center. They must also establish and maintain an ongoing training program for both new and existing staff to meet the franchisor's standards. All center teachers are required to participate in local, regional, and/or national teacher training programs. While teachers are not generally required to be state-certified, Gymboree Play & Music recommends that franchisees conduct background checks on all employees. Additionally, to ensure focus on the programs, franchisees and their employees are not permitted to bring their own children to the center while conducting classes.