Risk Score
Pending analysis
Investment Range
$45,000 - $104,700
Franchise Fee
$25,000
Total US Locations
4
Business Summary
STEM Builders Learning Center offers Science, Technology, Engineering, and Math (STEM) enrichment education and tutoring services to elementary and middle school students. The centers provide a safe environment for students to learn science, math, computer programming, and robotics, including building, programming, and testing robots. Additionally, STEM Builders Learning Center hosts birthday parties and summer camps focused on STEM education.
Corporate History
STEM Builders Learning Center LLC was organized on April 3, 2018, in Minnesota. Its predecessor and affiliate, STEM Builders, Inc., was formed on May 17, 2016, and initially operated a STEM Builders business in Plymouth, Minnesota, from 2016 until October 2020, when it was sold to a franchisee. STEM Builders, Inc. has also offered online STEM classes since April 2020. STEM Builders Learning Center LLC began offering franchises in 2018.
Financial Overview
Investment Range
$45,000 - $104,700
Franchise Fee (Low)
$25,000
Franchise Fee (High)
$25,000
Royalty %
7%
Marketing %
2%
Equipment Costs (Low)
$11,000
Equipment Costs (High)
$28,000
Working Capital
$17,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The financial statements for STEM Builders Learning Center received an Unqualified Opinion from their independent auditor. However, Note 1 to the financial statements indicates that the company's ability to continue as a going concern is dependent on obtaining additional capital and generating sufficient revenues and cash flows to meet its obligations.
Financing Details
STEM Builders Learning Center does not offer any direct or indirect financing to its franchisees. Additionally, the franchisor does not guarantee any notes, leases, or other obligations for franchisees.
Performance Metrics
Total US Locations
4
Franchised Units
3
Corporate Units
1
Franchising Since
2018
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
STEM Builders Learning Center has no litigation history to report. Item 3 of the FDD states that no litigation is required to be disclosed.
Bankruptcy History
STEM Builders Learning Center has no bankruptcy history to report for itself, its predecessors, affiliates, or management personnel. Item 4 of the FDD states that no bankruptcy is required to be disclosed.
Agreement Terms
Initial Term
5 years
Renewal Conditions
To renew their franchise agreement, STEM Builders Learning Center franchisees must be in good standing with the franchisor, provide 12 months' advance notice of their intent to renew, pay a $5,000 renewal fee, and sign the then-current franchise agreement. They are also required to update or replace software and hardware and ensure their premises are retained and meet current standards.
Training & Support Program
Franchisor Assistance
Before opening, STEM Builders Learning Center assists franchisees by licensing trademarks, designating their territory, reviewing and approving their selected business premises, and providing a copy of the operations manual. The franchisor conducts an initial training program totaling 54 hours (33 classroom, 21 on-the-job) for up to three people. After opening, STEM Builders Learning Center provides ongoing assistance by protecting and defending the brand's marks, updating the operations manual, managing the Brand Fund and related marketing programs, and handling vendor rebates. They also plan to offer additional ongoing training programs for managers and employees, although these may incur additional charges for the franchisee. The franchisor also expects to be in regular contact with franchisees to offer general assistance and discuss operations.
Initial Training Hours
54
Training Location
Via webinar or at STEM Builders Learning Center's headquarters in Plymouth, Minnesota, and/or at one or more operating STEM Builders Learning Center businesses.
Ongoing Support
After opening, STEM Builders Learning Center expects to maintain regular contact with franchisees to discuss operations and offer general assistance. The franchisor plans to provide additional ongoing training programs for franchisees, their managers, and employees, although these services will be at the franchisee's cost. STEM Builders Learning Center also manages the Brand Fund and its associated marketing programs, handles vendor rebates, and provides periodic training (at cost). Franchisees may also need approval for internet activities and might participate in an advisory council if one is formed.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
Yes
Operational Details
Location Type
Hybrid
Owner Participation
Supervisory
Territory Type
Exclusive
Territory Size Requirements
STEM Builders Learning Center territories are defined as a specific mutually agreed-upon marketing area described by zip codes. When designating a territory, the franchisor considers factors such as demographics, the number of public and private schools, and other elements relevant to operating a STEM Builders business.
Staffing Notes
STEM Builders Learning Center requires the franchisee to either devote full time and effort to actively managing the Licensed Business or delegate its management to a responsible person. If a manager is designated, they must successfully complete the franchisor's initial training program within 60 days of assuming the role. The franchisee or designated manager must always retain ultimate authority and responsibility. Additionally, each STEM Builders Learning Center franchisee must, at all times, employ at least one Certified STEM Builder Trained Specialist (SBT) who meets or exceeds the qualifications set forth in the Operations Manual. Both the manager and the SBT must successfully complete the franchisor's initial training program. Any manager or employee with access to trade secrets must sign a confidentiality agreement. The Operations Manual provides a Center Manager job description and guidelines for coaches.