In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for The Learning Experience franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for The Learning Experience franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned The Learning Experience outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on The Learning Experience franchise opportunity

Section V – Presentation and analysis of The Learning Experience’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2021, 2022, and 2023 average and median gross sales for the franchised and company-owned (separately stated) Learning Experience centers that were open for more than 48 months as of December 31 of the applicable year (“Mature Centers”)

• 2021, 2022, and 2023 average and median gross sales for the franchised and company-owned (separately stated) Learning Experience centers that were open 24-47 months as of December 31 of the applicable year (“Intermediate Centers”)

• 2023 average revenue, royalties, gross profit, salaries and benefits, school supplies, advertising, utilities and repairs, admin expenses, miscellaneous expense, total expenses, and EBITDAR (earnings before interest, taxes, depreciation, amortization, and rent) for the 18 company-owned Mature Centers that corporate owned the entire year in 2023

Section VI – Key ratios, comparables, computations, and analyses for The Learning Experience franchise opportunity (exclusive content for Platinum subscribers)

Section I – The Learning Experience Franchise Costs

• Franchise Fee:  $60,000
• SDSC Fee – Only for Site Development:  $240,000 to $302,500
• Lease Security Deposits:  $15,000 to $150,000
• Insurance Premiums:  $3,500 to $18,000
• Assignor Security Deposit:  $20,000 to $50,000
• Organizational Expenses:  $1,000 to $2,500
• Software Service Fee for 6 Months:  $3,150 (at $525/month)
• Pre-paid Rent for Up to 3 Months:  $0 to $150,000
• Opening Marketing Efforts:  $30,000 to $55,000
• Initial Computer Set-Up Fee:  $2,999
• Payments/Security Deposits to Utility Provider (heat, gas, electric, water, sewer, telephone, and internet service):  $500 to $5,000
• Local and State Licenses and Permits:  $400 to $2,000
• Travel/Lodging for Staff Training:  $2,500 to $15,000
• Initial Employee Salaries for 6 Months:  $100,000 to $175,000
• Curriculum:  $500 to $3,850
• Food/Paper/Expendables:  $1,250 to $3,500
• Miscellaneous:  $0 to $70,000
• Additional Funds – Operating Expenses for 6 Months:  $200,000 to $400,000
• L.E.A.P. Interactive Setup Fee (per whiteboard):  $5,000 to $8,800
• Total Estimated The Learning Experience Franchise Costs:  $685,799 to $1,477,299

Section II – The Learning Experience’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Franchise Fee:  $60,000
• Royalties:  7% of the Center’s Gross Revenue, which includes all revenue related to the Center
• Brand Awareness Fund:  currently, 1% of Gross Revenue. The Learning Experience has the right to increase the minimum payment up to 2.5% of Gross Revenue.

Section III – Number of Franchised and Company-Owned The Learning Experience Outlets

Franchised

2021

• Outlets at the Start of the Year:  239
• Outlets at the End of the Year:  269
• Net Change:  +30

2022

• Outlets at the Start of the Year:  269
• Outlets at the End of the Year:  301
• Net Change:  +32

2023

• Outlets at the Start of the Year:  301
• Outlets at the End of the Year:  326
• Net Change:  +25

Company-Owned

2021

• Outlets at the Start of the Year:  24
• Outlets at the End of the Year:  33
• Net Change:  +9

2022

• Outlets at the Start of the Year:  33
• Outlets at the End of the Year:  38
• Net Change:  +5

2023

• Outlets at the Start of the Year:  38
• Outlets at the End of the Year:  40
• Net Change:  +2

Section IV – News Updates on The Learning Experience Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for The Learning Experience Franchise (Item 19, 2024 FDD)

Part 1 – Average Gross Sales for Certain Franchised and Company-Owned Centers for January 1, 2021 to December 31, 2023

• The following tables directly below set forth the historical average annual revenue during the fiscal period between January 1, 2021 and December 31, 2023 for centers that had been open for at least 24 months as of the fiscal end date in 2021, 2022, and 2023.

• As of December 31, 2021, there were 303 centers in the United States, 213 of which had been open for at least 24 months. As of December 31, 2022, there were 339 centers in the United States, 239 of which had been open for at least 24 months. As of December 31, 2023, there were 366 centers in the United States, 296 of which had been open for at least 24 months.

• The tables below include franchise and company-owned centers.

• The information below is divided into subsets by center type: Centers that were open for more than 48 months (“Mature Centers”) and Centers that were open for 24-47 months (“Intermediate Centers”), as follows:

A.  Mature Centers

Mature Franchise Centers

2021

• Number of Centers:  149
• Average Gross Sales:  $1,477,322
• Number and Percentage of Centers That Exceeded the Average:  72 (48.3%)
• Median Gross Sales:  $1,435,711

2022

• Number of Centers:  173
• Average Gross Sales:  $1,979,344
• Number and Percentage of Centers That Exceeded the Average:  81 (46.8%)
• Median Gross Sales:  $1,961,141

2023

• Number of Centers:  197
• Average Gross Sales:  $2,034,763
• Number and Percentage of Centers That Exceeded the Average:  99 (50.3%)
• Median Gross Sales:  $2,038,148

Mature Company-Owned Centers

2021

• Number of Centers:  11
• Average Gross Sales:  $1,629,769
• Number and Percentage of Centers That Exceeded the Average:  5 (45.5%)
• Median Gross Sales:  $1,553,803

2022

• Number of Centers:  19
• Average Gross Sales:  $2,090,734
• Number and Percentage of Centers That Exceeded the Average:  9 (47.4%)
• Median Gross Sales:  $2,082,642

2023

• Number of Centers:  18
• Average Gross Sales:  $2,269,149
• Number and Percentage of Centers That Exceeded the Average:  9 (50.0%)
• Median Gross Sales:  $2,269,043

B. Intermediate Centers

Intermediate Franchise Centers

2021

• Number of Centers:  48
• Average Gross Sales:  $1,291,090
• Number and Percentage of Centers That Exceeded the Average:  20 (41.7%)
• Median Gross Sales:  $1,196,827

2022

• Number of Centers:  55
• Average Gross Sales:  $1,861,522
• Number and Percentage of Centers That Exceeded the Average:  30 (54.5%)
• Median Gross Sales:  $1,901,758

2023

• Number of Centers:  69
• Average Gross Sales:  $1,766,829
• Number and Percentage of Centers That Exceeded the Average:  38 (55.1%)
• Median Gross Sales:  $1,825,419

Intermediate Company-Owned Centers

2021

• Number of Centers:  10
• Average Gross Sales:  $1,375,049
• Number and Percentage of Centers That Exceeded the Average:  4 (40.0%)
• Median Gross Sales:  $1,221,848

2022

• Number of Centers:  6
• Average Gross Sales:  $1,898,665
• Number and Percentage of Centers That Exceeded the Average:  4 (66.7%)
• Median Gross Sales:  $1,997,189

2023

• Number of Centers:  12
• Average Gross Sales:  $1,532,296
• Number and Percentage of Centers That Exceeded the Average:  4 (33.3%)
• Median Gross Sales:  $1,462,942

Part 2 – Average Annual Gross Sales, Selected Expenses, and EBITDAR for Mature Company-Owned Centers for January 1, 2023 to December 31, 2023

• The table below reflects the average annual gross sales, selected expenses, and EBITDAR (which means “earnings before interest, taxes, depreciation, amortization, and gross rent”) for the 18 Mature Company-Owned Centers that corporate owned the entire year in 2023. All numbers are reported in thousands.

Average

Revenue:  $2,403 (100.0%)

Less: Royalties:  $168 (7.0%)

Gross Profit:  $2,235 (93.0%)

Operating Expenses

• Salaries and Benefits:  $1,161 (48.3%)
• School Supplies:  $136 (5.7%)
• Advertising:  $53 (2.2%)
• Utilities and Repairs:  $119 (5.0%)
• Admin Expenses:  $56 (2.3%)
• Miscellaneous Expense:  $37 (1.5%)
• Total Expenses:  $1,562 (65.0%)

EBITDAR:  $673 (28.0%)

• “Gross Sales” includes cash and credit sales for goods and services provided, but does not include sales or use taxes.

• The Gross Sales information is reported to the franchisor by each Franchised Center for royalty reporting. The franchisor has not audited the Gross Sales reports and it has not verified (i) the accuracy of the information or (ii) whether such information was prepared in accordance with generally accepted accounting principles. The franchisor does not believe that any Center overstated Gross Sales nor does it believe that any Mature Company-Owned Center understated the selected expenses.

• In Part 2, the franchisor has not included any cost and expense data related to any Franchised Centers because it does not have the ability to poll such data through its point of sale system and its franchisee reports are not handled in a consistent manner.

• This means the earnings claims figures for Franchised Centers do not reflect the costs of sales, operating expenses, or other costs or expenses that must be deducted from the gross revenue or gross sales figures to obtain your net income or profit.

• You should conduct an independent investigation of the costs and expenses you will incur in operating your Center. Franchisees or former franchisees listed in the Disclosure Document may be one source of this information.

• The franchisor has no reason to believe that comparable expense categories and EBITDAR of Mature Franchised Centers materially differ from those presented for Mature Company-Owned Centers. Company-Owned Centers may be able to take advantage of economies of scale not available to franchisees.

• The information in Part 2 is based on the actual results for the Mature Company-Owned Centers, as maintained in the franchisor’s corporate accounting records. The franchisor uses generally-accepted accounting principles in maintaining its records. The franchisor has not audited, confirmed, or verified this information.

• You will incur expenses that are not identified in Part 2. For example, base rent, CAM charges, property taxes and lease administration fees, interest, income taxes, depreciation, and amortization are not deducted in arriving at EBITDAR.

• Part 2 reflects a deduction for royalties in the amount of 7% of Gross Sales, as well as the LEAP Interactive Fee, Software Fee, and Lease Administration Fee; however, Company-Owned Centers do not pay a royalty fee but do contribute to the Brand Awareness Fund at the same rate as franchisees; namely, 1% of Gross Sales.

• The Mature Company-Owned Centers spent between 1% and 5% on marketing and advertising.

• The information in Part 1 does not include centers that closed during the reporting year. In Part 1, the “center type” is as of December 31, 2023. For example, if a center was converted from a Company-Owned Center to a Franchised Center during the reporting period, but prior to December 31, 2023, the center is categorized as a Franchised Center in Part 1.

Section VI – The Learning Experience Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️