Nursery Franchise Opportunities

Nursery Franchise Opportunities

Why buy a nursery franchise?

Running a nursery can be very rewarding, with the potential for important community impact. By choosing to buy into a nursery franchise, you will know that the franchisor has put in the work to ensure the model works. They should also be able to give you the support that will enable you to hit the ground running.

Buying a nursery franchise, as opposed to starting from scratch, can help to offset some of the challenges of running your own childcare business. These include a high initial outlay, and multiple health and safety rules and Ofsted inspections to contend with. It can also be hard to recruit the right staff in a low-wage sector.

Pip Wilkins from the British Franchise Association says the best franchises will provide help with everything from legal advice and how to identify the right premises where footfall is high to how many children you need to be profitable and how to recruit the right staff.

Franchises linked to children’s activities tend to be a tight-knit community and are committed to sharing best practice and continuing to develop, adds Wilkins.

What is a nursery franchise?

There are many different types of nursery franchise available today. This includes everything from nursery schools or day nurseries to early years providers, such as creches, playgroups and children's centres.

A day nursery franchise provides care and early education for children from birth to around five years old, typically during the day while parents work or study. With parents working longer hours, some nurseries even offer overnight coverage.

Nursery franchises include everything from the more established businesses such as the Banana Moon Day Nursery franchise, which operates a network of 49 nurseries across the UK, and Monkey Puzzle, the UK’s largest childcare franchise network, to up-and-coming brands such as Canopy. The nursery landscape is constantly changing and adapting to what parents want and need.

Buying a nursery franchise

The cost of buying a nursery franchise is estimated to range from £40,000 to £120,000 or more for start-up costs. This is dependent on size, location and reputation.

This cost covers franchise fees, legal advice, fittings, rent and more. On top of that are the ongoing cost of property, salaries, training, maintenance, food and other daily expenses.

When it comes to property costs, buying an existing childcare business which is already adapted to childcare usage can bring some cost savings.

What makes for success?

To be a successful franchisee, Wilkins says doing your research and due diligence is vital. That includes checking Ofsted ratings, franchisees’ reviews, the support package offered and benchmarking against the competition.

The nursery sector has been at the centre of a political storm of late with government subsidies for pre-school children not covering the full cost of childcare provision. That has led some nurseries to close or cut back on funded places.

Nevertheless, many nurseries are thriving, offering innovative curricula and extras such as outings, art activities, language teaching and more, with a big focus on health and wellbeing.

Wilkins says one trend she is seeing in premise-based sectors which is replicated in the nursery sector is towards multi-unit locations.

Franchisees who own multiple units can share resources and centralise functions such as finance. They can attract more investment if they are successful. But franchisors need to support them, says Wilkins, by proactively training their franchisees in how to manage more than one unit.

Nursery franchise case studies

Monkey Puzzle Day Nursery franchisee

Dilpreet Singh had planned to start a school in India when he was young. After a career in IT, he has finally returned to his passion for education, using his savings to fund a franchise business.

The franchise option made sense as he had no experience in the sector and childcare has a lot of compliance and safeguarding issues.

Dilpreet picked the Monkey Puzzle Day Nursery franchise after doing his research. The initial franchise fee for a Monkey Puzzle franchisee is £40,000 + VAT. Franchisees also need at least £100,000 in liquid capital.

First, Dilpreet had to identify a site for his nursery and get planning permission, have surveys done and sort out legal issues. The building, in Wokingham, was then adapted for nursery use.

Monkey Puzzle helped with everything, including finding the site and marketing. The Monkey Puzzle name helps to draw parents as they know it is a quality brand. Other franchisees also offer advice and pool resources, for instance, to bring down uniform costs.

Challenges

Asked what the most challenging aspect of the business is, Dilpreet says finding a manager with the right experience was initially difficult.

When it comes to recruitment and retention, he emphasises employee wellbeing. Understanding staff members’ personal issues or giving practical help is a win-win as any problems affect the business either directly or indirectly. He even helped one employee to fix her car.

Another big challenge is government policy changes. Dilpreet says it can be difficult for nurseries to implement government policies quickly as it takes time to explain them to parents and staff.

One recent change involves not charging top-up fees for extras like food, even though the government rate for preschoolers doesn’t cover the full cost of places. Parents will be allowed to bring in their own food, but that creates a risk for nurseries around allergies, says Dilpreet.

He is enjoying his learning curve, however. If he feels stressed he says he likes to sit with the children. “When the little ones look at you and smile it feels I am doing something amazing,” he says. “They give me more energy.”

Canopy Children's Nursery Franchise

Sarah Charles’ story shows how up-and-coming nursery franchises can make their mark. She is the founder of Canopy Children's Nursery Franchise, one of a new breed of nursery franchises.

Sarah had always planned to start a nursery franchise from her first steps into the childcare sector in 2003, but she wanted to be sure she had a successful model. That approach has paid off.

Sarah started working in the nursery sector around 20 years ago after a career in banking. A mum with young children, she did her research and decided to take out a loan to buy an existing nursery in Solihull. Over the next years she acquired two more nurseries and got each up to outstanding in the Ofsted rankings.

The third nursery was operating in the grounds of a private school and they asked her to run their holiday club. Her holiday club business, Fun Fest, became her first venture into franchising.

As a lower risk venture, requiring lower investment than nurseries, she was able to use it to learn and build her reputation in the franchising world.

Modern and flexible nursery franchise

By 2020 she felt ready to launch her nursery franchise business, just after Covid struck. Fun Fest clubs were closed temporarily, giving her time to plan. “I thought it was now or never,” she says.

She worked with a branding agency and developed her Canopy curriculum to encourage children to be more emotionally resilient and more culturally aware - the kind of skills she sees as vital in the 2020s.

The franchise is gathering momentum now. It has five franchisees and four more in the pipeline for 2025 as well as a new centrally-run business. Most are in the South East where parents’ salaries are higher.

The nurseries are modern and flexible, offering a community space for other groups such as the National Childbirth Trust or baby massage sessions. They also share an ethos - Canopy Cares - which centres around teaching children about sustainability, for instance, that they can grow their own food.

However, there are many challenges facing the childcare sector and Sarah, like Dilpreet, mentions changing government policy and subsidies that don’t cover the full cost of childcare places, particularly if they offer quality food, more activities and longer hours. The result is that nurseries are cutting down on the number of funded places they offer.

Franchisor support

On the plus side, there is a lot of support from the franchisor. Potential Canopy franchisees begin with a discovery session so franchisor and franchisee can see if they are a good fit.

Canopy helps franchisees acquire property and fixtures and fittings, gives legal advice and helps with marketing, website development, digital systems, recruitment and information about the early years process.

Sarah thinks newcomers have one big advantage over more established brands: “We have come into the market as a fresh entrant. That gives us the opportunity to be really in touch with what aspirational parents are looking for.

“It’s more difficult for long-standing nurseries to pivot to what today’s parents want and we know that what we offer is relevant today.”

If you're interested in buying a nursery franchise, browse our wide range of franchise opportunities. You can also browse education franchise opportunities.