Tierra Encantada Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$1,541,675 - $3,658,354
Franchise Fee
$48,000
Total US Locations
13
Business Summary
Tierra Encantada operates early childhood education centers that provide a warm, Spanish-language immersion learning environment for children. These centers also feature fresh cooked, globally inspired meals.
Corporate History
Tierra Encantada Franchising LLC was organized in December 2018 in Minnesota as a limited liability company. While the franchising entity itself does not operate centers, its affiliate, Tierra Encantada Eagan Inc., has operated the first Tierra Encantada Center since January 2013. Tierra Encantada Franchising LLC began offering franchises in February 2019, focusing solely on selling franchises for its early childhood education centers.
Financial Overview
Investment Range
$1,541,675 - $3,658,354
Franchise Fee (Low)
$48,000
Franchise Fee (High)
$60,000
Royalty %
7%
Marketing %
1%
Equipment Costs (Low)
$481,482
Equipment Costs (High)
$663,245
Working Capital
$225,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Tierra Encantada appears to be in good financial health, showing positive net income and member's equity for both 2023 and 2024. The company's cash balance also increased during this period. The independent auditor's report did not include any going concern qualifications or other significant financial concerns.
Financing Details
Tierra Encantada does not offer any direct or indirect financing to its franchisees. This means that Tierra Encantada will not guarantee loans, leases, or other financial obligations for franchisees.
Performance Metrics
Total US Locations
13
Franchised Units
2
Corporate Units
11
Avg Square Footage
10,375
Franchising Since
2019
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Tierra Encantada has no litigation to report in Item 3 of its Franchise Disclosure Document. No litigation is required to be disclosed.
Bankruptcy History
Tierra Encantada has no bankruptcy history to report in Item 4 of its Franchise Disclosure Document. No bankruptcy is required to be disclosed.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, Tierra Encantada franchisees must provide written notice between six and nine months before the current term ends. They must have no outstanding financial or other obligations to Tierra Encantada or its approved suppliers, and must be in full compliance with their current Franchise Agreement. Franchisees are required to sign a mutual general release of claims and execute Tierra Encantada's then-current form of franchise agreement, which may have materially different terms and fees. They must also meet current qualification and training requirements, renovate their center to meet updated brand standards, provide proof of continued premises possession, and demonstrate sufficient financial resources. A renewal fee of $5,000 is also required.
Training & Support Program
Franchisor Assistance
Tierra Encantada provides extensive support to its franchisees. Before opening, the franchisor assists with site approval and provides initial training for up to three individuals. They also provide a Development Manual with design and layout specifications, loan copies of the confidential Operations Manual, and provide a list of approved suppliers, along with general pre-opening and opening assistance. On an ongoing basis, Tierra Encantada offers periodic operational guidance, updates to the Operations Manual and operating procedures, sells proprietary products and services, administers the Advertising Fund for brand promotion, and offers regular training programs for franchisees and their staff.
Initial Training Hours
104
Training Location
Corporate headquarters in Minneapolis, Minnesota or Online
Ongoing Support
Tierra Encantada provides ongoing support to its franchisees through periodic operational guidance and updates to the Operations Manual, standards, specifications, and procedures. They also conduct periodic and ongoing training programs for franchisees, their Operating Principals, and other staff members. The franchisor administers an Advertising Fund for brand development and may offer additional advice and assistance at the franchisee's expense.
Franchise Requirements
Ideal Candidate Profile
Tierra Encantada is seeking qualified legal entities or individuals to establish and operate its early childhood education centers. For entities, a designated Operating Principal, who must be an individual and own at least a 10% beneficial interest, must be acceptable to Tierra Encantada and responsible for general oversight and management. The franchisee or Operating Principal must hold all required licenses and certifications for the center. All owners of the franchisee entity and their spouses are required to personally guarantee the obligations. Additionally, the franchisee or an approved Center Director must take on the full-time responsibility for the daily supervision and operation of the Tierra Encantada center. The franchise is also open to current members of the United States Military and honorably discharged veterans, offering a 20% discount on initial fees.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
Supervisory
Territory Type
Protected
Territory Size Requirements
Tierra Encantada determines territory size on a case-by-case basis during the site confirmation process. Factors considered include whether the location is urban or suburban, the number of residents, and the number of children in the area. Each territory is different, but generally contains a population of 50,000 people or more.
Staffing Notes
Tierra Encantada franchisees are responsible for hiring and maintaining a competent and conscientious staff that provides prompt, courteous, and knowledgeable service, and adheres to uniform and dress code standards. The franchisor requires that either the franchisee, their Operating Principal, or a designated and approved Center Director assume full-time responsibility for the daily supervision and operation of the center. Franchisees are solely responsible for all employment decisions, functions, and compliance with labor laws.