A mature U.S. Kiddie Academy may produce an annual owner-operator result ranging from an estimated $90,000 loss to about $690,000 of positive benefit, with a $266,000 base analytical case. The range uses the FDD's bottom-quarter, all-mature, and top-quarter average cohorts. The 2026 Franchise Disclosure Document does not report net income or owner compensation; it reports Gross Profit before several acknowledged non-listed expenses.
Legal franchisor: Kiddie Academy Domestic Franchising, LLC. Parent: Essential Brands, Inc. FDD issuance: March 27, 2026. Item 19 status: official historical Gross Profit disclosure, not net income or owner compensation. Period: calendar year ended December 31, 2025. Format and population: franchisee-owned U.S. early-childhood learning and child-care Academies, including 293 mature and 22 ramping reporting Academies; the single company-owned outlet was not part of the reporting population. The disclosure does not separate leased facilities from property-owned facilities. External benchmark: 2022 U.S. Census Service Annual Survey data for employer firms in broad NAICS 624 Social Assistance. Date checked: July 19, 2026. See the official Kiddie Academy U.S. franchise website.
The FDD provides strong same-brand revenue and expense-category evidence, but the owner-benefit result depends materially on a broad government operating-expense proxy because the disclosure omits several costs and does not define owner compensation.
Base owner-operator benefit
Before financing and personal income taxes; not an official FDD earnings figure.
Mature average Gross Profit
Official, reconcilable model anchor for the 293-Academy mature cohort.
Mature median Gross Profit
Official central-tendency check; not owner earnings or the model's paired anchor.
Mature average Gross Revenue
Official 2025 revenue anchor that reconciles with the average expense lines.
Mature reporting Academies
Franchised outlets open at least 24 months at the end of the reporting period.
Required recurring percentages
7% royalty, 2% Brand Building Fund, plus at least 2% local advertising.
What does Kiddie Academy Item 19 actually measure?
Item 19 officially measures Gross Revenue, Labor, Occupancy, Miscellaneous expenses, and Gross Profit—not an owner's salary, distribution, net income, or after-tax take-home pay. The 2025 mature-Academy median reported amount is $479,211, while the average reported amount is $534,330. The scenario model uses the average figures because they reconcile: $2,193,815 of reported revenue minus $1,019,835 of Labor, $370,668 of Occupancy, and $268,982 of Miscellaneous equals $534,330. The resulting 24.4% ratio is a ratio of compatible disclosed averages, not the median or average of Academy-level profit margins.
The FDD states that the reported amount can still be affected by non-listed revenue, including government funds and grants, and non-listed expenses, including supplies, food, and insurance premiums. Owner salary, owner draw, distributions, interest, depreciation, capital spending, and personal taxes are not separately identified. Source: 2026 Kiddie Academy Franchise Disclosure Document, Item 19, pp. 61–80.
Each median line item is calculated independently across the reporting population. Subtracting the median expense lines from median revenue therefore does not reproduce the disclosed median result, and the observations may come from different Academies. The calculation model uses the fully reconciling average cohort for its cost bridge, while retaining the median as a separate central-tendency check rather than combining unpaired medians.
| 2025 reporting cohort | Median Gross Revenue | Median Gross Profit | Academies |
|---|---|---|---|
| Mature Academies, all | $2,075,740 | $479,211 | 293 |
| Mature, top quarter by Gross Profit | $2,932,736 | $991,054 | 73 |
| Mature, bottom quarter by Gross Profit | $1,343,525 | $105,058 | 73 |
| Ramping Academies, all | $1,465,325 | $225,960 | 22 |
| Ramping, bottom quarter by Gross Profit | $1,089,677 | -$437,520 | 6 |
Average results are not typical results. Only 131 of 293 mature Academies, or 45%, reported Gross Revenue above the disclosed average, and 125 of 293, or 43%, reported Gross Profit above the disclosed average. The lower median figures and these achievement rates are reasons the Base case should not be presented as an expected outcome.
Registration fees, tuition, and other amounts charged to families, based on operating results reported monthly by franchisees.
Employee wages, salaries, bonuses, payroll taxes, training, benefits, workers' compensation, and the cost of Academy Director personnel.
Rent, common-area maintenance, real estate taxes, percentage rent, maintenance, security, trash, association dues, and certain shopping-center marketing charges.
Reported variable operating expenses including royalty fees, Brand Building Fees, telephone, advertising, utilities, cleaning, and postage.
Gross Revenue minus Labor, Occupancy, and Miscellaneous. Because other expenses can remain outside those categories, it cannot be silently renamed owner earnings.
How was the −$90,000 to $690,000 owner-benefit range estimated?
The estimate uses the FDD's observed bottom-quarter, all-mature, and top-quarter average cohorts as Conservative, Base, and Upside anchors. These average line items reconcile within each cohort. The scenarios are descriptive analytical cases, not probabilities, forecasts, or claims that a particular Academy will fall inside the range.
The 12.224% additional operating-cost allowance is derived from compatible central averages. The reconciled FDD average leaves 24.356% of revenue after the three listed expense categories. U.S. Census Bureau 2022 Service Annual Survey tables show $273.292 billion of revenue and $240.136 billion of expenses for employer firms in broad NAICS 624 Social Assistance, implying a 12.132% operating-surplus ratio. The difference is 12.224 percentage points of revenue.
This benchmark is a compatibility proxy, not a Kiddie Academy or child-care-franchise result. NAICS 624 contains activities beyond child care, and the Census expense structure does not map perfectly to owner benefit. The Census definition of NAICS 624410 Child Care Services is narrower than the published sector-level data used for the allowance.
The common allowance is held constant as a percentage only to make the three cohort cases reproducible. It does not assert that food, supplies, insurance, maintenance, professional services, depreciation, and other costs scale identically at every Academy. A location-specific model should replace the allowance with actual vendor quotes, staffing plans, lease terms, and franchisee accounting records.
| Scenario | FDD cohort and average revenue | Average Gross Profit | Estimated owner-operator benefit |
|---|---|---|---|
| Conservative | Mature bottom quarter $1,389,528 Gross Revenue |
$80,014 | −$89,844 after $169,858 allowance |
| Base | All mature Academies $2,193,815 Gross Revenue |
$534,330 | $266,155 after $268,175 allowance |
| Upside | Mature top quarter $3,203,602 Gross Revenue |
$1,081,579 | $689,967 after $391,612 allowance |
Conservative uses the mature bottom-quarter averages, Base uses all mature averages, and Upside uses mature top-quarter averages.
Interpretation: The FDD's mature bottom-quarter average reported figure is not enough to absorb the modeled additional operating-cost allowance, while the top-quarter cohort retains substantially more. The Base case is an analytical reference point, not the most likely result.
Source and method: 2026 Kiddie Academy FDD, Item 19, mature cohort averages; U.S. Census Bureau 2022 Service Annual Survey Tables 1 and 5; FranchisesBiz calculations using unrounded inputs.
- Cohort anchors: Conservative, Base, and Upside use the official mature bottom-quarter, all-mature, and mature top-quarter averages ranked by Gross Profit. They are not worst, expected, or best cases.
- Additional operating costs: each scenario subtracts 12.224% of its FDD cohort revenue, the gap between the compatible mature-average ratio and the broad Census operating-surplus ratio.
- Recurring obligations: the 7% royalty, 2% Brand Building Fund, and reported advertising expense are already inside Miscellaneous and are not subtracted twice.
- Director compensation: included in Labor. The full-time Academy Director is distinct from the owner or principal.
- Owner compensation: not separately defined by the disclosure. The result is labeled owner-operator benefit because it may combine residual business profit and compensation for the owner's required management work.
- Financing: interest and principal payments are excluded from the published range and should be modeled separately for the buyer's actual capital structure.
- Depreciation and capital spending: the Census expense table includes depreciation and amortization as an expense category, but the scenario does not separately deduct cash capital expenditures.
- Taxes: no personal income-tax estimate is made. Entity form, jurisdiction, deductions, and owner circumstances determine after-tax cash.
How much does Gross Profit vary across mature Academies?
The official 2025 medians range from $105,058 for the bottom quarter of mature Academies to $991,054 for the top quarter, measured by the FDD's defined operating measure. This is a large same-brand dispersion, and each figure remains the disclosed operating measure rather than final owner earnings.
Bottom quarter, all mature reporting Academies, and top quarter for calendar 2025.
Interpretation: Academy economics vary enough that a single system median is not a safe prediction for a particular location. Enrollment, pricing, staffing, occupancy, market conditions, and management execution can move the result materially.
Source: 2026 Kiddie Academy FDD, Item 19, pp. 62–64. Cohorts are ranked by the FDD measure; the chart does not convert the reported figures into owner earnings.
How does owner involvement change the earnings interpretation?
Kiddie Academy's FDD contemplates an active owner or principal, not a standard passive-income model. Item 15 requires the owner, a principal, or a personal guarantor to devote full time and best efforts to management and supervision. The Academy must also remain under the on-premises supervision of a trained, certified, full-time Director.
Active owner or principal
The published range is labeled owner-operator benefit because the owner's required management labor is not separately priced in the financial performance disclosure. Part of the economic benefit may compensate the owner for work performed rather than represent passive residual profit.
Local operator or ownership partner
The official ownership qualifications state that an owner must live in the market, relocate, or partner with an approved local operator providing day-to-day oversight. No reliable same-brand evidence quantifies the extra cost or resulting owner income for that structure, so this article does not invent a manager-run adjustment.
For multi-unit ownership, the FDD permits the responsible owner or principal to divide full-time efforts among Academies. Per-unit results should still be modeled first; multiplying one mature unit's benefit by several units would ignore ramp-up, shared overhead, director structure, financing, and development timing. Source: 2026 Kiddie Academy FDD, Item 15, pp. 55–56.
Which franchise charges and advertising commitments are already reflected in the FDD figures?
The standard 7% royalty, 2% Brand Building Fund fee, and required local advertising are already represented within the FDD's Miscellaneous category. The disclosure expressly includes royalties, Brand Building Fees, and advertising. Subtracting these obligations again from the reported figure would double-count costs that reporting franchisees already classified there.
| Recurring obligation | FDD requirement | FDD treatment |
|---|---|---|
| Royalty | 7% of Gross Revenues | Included in Miscellaneous |
| Brand Building Fund | 2% of Gross Revenues | Included in Miscellaneous |
| Local Annual Advertising Expense | At least 2% or $10,000 | Advertising is included in Miscellaneous; verify franchisee classification |
| Combined percentage commitments | At least 11% of Gross Revenues | Embedded in reported operating expenses, not added to the scenario allowance |
Item 6 also describes a 3.5% royalty rate for the first six months of the first qualifying newly developed Academy. That temporary opening-period reduction should not be imposed on—or credited to—the 2025 mature cohort averages.
Source: 2026 Kiddie Academy FDD, Item 6, pp. 14–15; Item 11, pp. 41–42; and Item 19, p. 80. Initial fees and facility development costs in Items 5 and 7 are startup-investment items, not annual operating expenses, and are not subtracted from one year of sales.
How reliable are the official figures and the scenario range?
The official operating evidence is broad but incomplete for owner-income analysis; the scenario range therefore remains Limited-confidence. At December 31, 2025, the system had 363 franchised Academies. The data set excluded 23 that had operated for fewer than 12 full months and 25 that did not report the required full-year information, leaving 315 reporting Academies: 293 mature and 22 ramping. The reporting set represents 86.8% of all franchised Academies and 92.6% of the 340 Academies open for at least 12 full months.
The FDD says the franchisee-reported information was not independently audited or verified by the franchisor or a third party. It also says performance varies substantially and that location, competition, region, market, labor cost, programs, franchisee marketing, and management skills affect results. In Item 20, the franchised system ended 2025 with 363 outlets after 23 openings, one termination, and three outlets ceasing operations for other reasons; 18 franchised outlets transferred during the year. These counts add context but do not prove profitability.
The U.S. Census benchmark has a separate limitation: it is a national average for employer firms in broad NAICS 624 Social Assistance, which includes but is not limited to NAICS 624410 Child Care Services. The Service Annual Survey methodology covers taxable and tax-exempt employer firms and produces national estimates; it is not franchise-specific, location-specific, or a substitute for a proposed Academy's operating budget.
What should a buyer verify before relying on an earnings estimate?
A buyer should reconstruct the proposed Academy's income statement and test every disclosed definition against franchisee records. The Federal Trade Commission's franchise buyer guide explains that Item 19 is where a franchisor places financial performance claims that have a reasonable factual basis, while Item 20 provides outlet growth and turnover information.
- Ask for the written substantiation supporting the 2025 financial performance tables and reconcile the exact proposed format and cohort.
- Ask mature, ramping, transferred, and former franchisees how supplies, food, insurance, repairs, professional fees, depreciation, and owner compensation appear in their books.
- Separate tuition and enrollment assumptions by classroom capacity, age group, local rates, discounts, bad debt, and seasonality.
- Build labor from local wage rates, child-to-staff ratios, benefits, overtime, substitute coverage, and Academy Director staffing.
- Model rent or property ownership separately, including common-area charges, real estate taxes, maintenance, and affiliated-party rent where applicable.
- Request a bridge from FDD Gross Profit to operating income, cash flow, owner draws, retained earnings, and distributions.
- Run debt service with the actual loan amount, interest rate, amortization, fees, and required reserves; do not deduct financing from operating earnings invisibly.
- Compare the site's licensing timeline and enrollment ramp with the 22 ramping Academies rather than relying only on mature results.
What is the strongest defensible annual earnings answer?
For one mature U.S. Kiddie Academy, the evidence-led scenario band runs from an estimated $90,000 annual loss to about $690,000 of positive pre-tax owner-operator benefit, with a $266,000 Base case. It is scenario-based—not an official owner-earnings disclosure—and uses the official 2025 bottom-quarter, all-mature, and top-quarter average cohorts after a common additional operating-cost allowance.
The most important earnings driver is the combination of enrollment-driven revenue and labor efficiency. The largest unresolved uncertainty is how each Academy's non-listed operating expenses and owner compensation bridge the FDD's reported measure to actual distributable cash. A buyer should verify that bridge in the FDD substantiation, the target site's budget, and interviews with current, ramping, transferred, and former franchisees before relying on any range.