Does anyone have experience with daycare/childcare facilities in U.S.?

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November 20, 2020

by a searcher in Charleston, SC, USA

Seems upside potential is capped, but what are downside risks/liabilities I should be aware of?

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Reply by a searcher
from University of Virginia in Atlanta, GA, USA
No personal experience, but I know the space is basically comprised of franchise groups (e.g., Primrose, Goddard, etc.) + more traditional chains (e.g., Bright Horizons), which account for ~10% of locations, and the rest are non-profit organizations (e.g., churches) and independents (e.g., Ms. Jones down the street). Roll-up strategies have not been successful as neither churches nor (actual) "Mom & Pop"s are legitimate acquisition targets and the advantages to scale are minimal given: (1) lack of back-office costs at independents, (2) parent distrust toward corporate childcare, and (3) lower profit requirements at independents/non-profits who are often happy to break even. That being said, franchisors have found success guiding interested entrepreneur-franchisees who want the support (e.g., with curriculum) and corporate chains like Bright Horizons have secured a few lucrative corporate contracts to provide in-building daycare for working-parent employees. Hope this helps.
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Reply by a searcher
from University of Pennsylvania in Washington, DC, USA
Huge liabilities for obvious reasons working with children, though typically insurance can be purchased to cover. Hiring and responsible oversight become that much more important. No personal experience, but I know a colleague who was involved in the industry a while ago
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