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The Actual Cost Of Owning A Tierra Encantada Franchise
As many households have two parents in the workforce, the childcare industry has become more lucrative than ever. For entrepreneurs dreaming about opening their childcare facility, Tierra Encantada is one of the most promising franchise options in the market. So, in this article, learn more about the Tierra Encantada Franchise cost. You’ll also know the requirements in starting this franchise.
Franchise Description
The childcare center first opened its doors to young learners in 2013. But it wasn’t until 2019 that it opened its community-oriented Spanish immersion daycare and preschool for franchising. To note, Tierra Encantada Franchising, LLC, franchises the learning center from its headquarters in Minneapolis, Minnesota.
Aside from providing a Spanish-language immersion learning, it also features a wholesome environment. In fact, they offer freshly-cooked, on-site organic meals, and they use cloth diapers for babies. There are less than ten franchisees at present, which could present a good chance for pioneer franchisees.
Training Overview
Aside from the Tierra Encantada franchise cost, it’s also crucial to know the amount of time and effort you’ll need to put in. There are several training and preparation terms you’ll need to complete before your franchise can be approved:
- The initial training program for the franchisee and operating principal takes ten days. This is held at the corporate headquarters in Minneapolis, though the training location can also change upon the franchisor’s discretion.
- Officers from the main office will visit the center for up to a 10-day period before and after the grand opening.
- The franchise owner and operating principal, as well as center directors or staff, should complete training courses, classes, or programs organized by the franchisor from time to time.
Territory Granted
The franchise terms will specify the approved location as well as a protected territory. That said, the franchisor will arrange the scope based on various factors, such as:
- whether the place is an urban area or a suburban area
- the population size living in the area
- the population size of children living in the area
In general, however, a franchise territory will contain a populace of about 75,000 people or more.
Obligations
Aside from Tierra Encantada franchise cost, the franchise owner also needs to conform with obligations in the franchise terms:
- The franchise owner should be involved in running the center’s day-to-day operations.
- Suppose there comes a time when the operating principal or center director is not employed by the center anymore. In that case, the franchise owner must designate another person who will undergo the required training.
- If the franchise is an entity, the operating principal should own no less than 10 percent beneficial interest in the center.
- The franchisor doesn’t allow franchise owners to use the center for any other business or purpose without first getting written consent.
- There are minimum hours and days that the center must be open to serve clients.
- The center should also operate in line with standards, methods, and specs as prescribed in the manual.
The initial term of agreement lasts for 10 years. The franchise owner can apply to renew for another ten years. This, however, is subject to the franchisor’s judgment if the franchisee met the requirements or not. Also, the franchisor doesn’t provide direct or indirect financing. They also don’t guarantee leases, notes, or other obligations.
Your Investment
| Initial Franchise Fee | $45,000 | $50,000 |
| Lease and Improvements | $394,200 | $1,028,000 |
| Security, Fire, Video Surveillance, and Keycard Access System | $42,000 | $78,000 |
| Kitchen Equipment | $13,000 | $20,000 |
| Outdoor Playground Area | $108,000 | $190,000 |
| Signage | $8,000 | $12,000 |
| Facility Furniture, Equipment, and Supplies | $155,000 | $256,000 |
| Computer Equipment and Software | $900 | $3,000 |
| Business Licenses and Certifications | $1,000 | $3,000 |
| Professional Fees | $500 | $2,500 |
| Insurance | $858 | $6,325 |
| Initial Training | $11,100 | $17,900 |
| Opening Advertising/Marketing | $3,000 | $10,000 |
| Initial Inventory of Supplies | $4,000 | $10,000 |
| Additional Funds/Working Capital (Pre-Opening – First 3 Months of Operation) | $60,000 | $100,000 |
| ESTIMATED TOTAL | $846,558 | $1,786,725 |
Other Costs
| Royalty Fee | Greater of 7% of Gross Sales or $500/wk. |
| Advertising Fund Contribution | 1% of Gross Sales |
| Minimum Local Advertising Obligation | Minimum required spending is $1000/mo on local advertising until the center is full |
| Advertising Cooperative Fees | Not applicable unless advertising cooperative is available in the franchisee’s region. It’s not more than the minimum local advertising obligation per annum. Plus, franchisor will credit expenditures to the cooperative for this requirement. |
| Technology Fee | 12% per week. The fee may increase upon notice. |
| Additional Assistance or Additional Training | $500/day per person, plus expenses. |
| Annual Convention Registration | $250/attendee. The fee may increase per year. |
| Product/Supplier Testing Evaluation Costs | The greater of $500 or the reasonable costs incurred in evaluating the product and/or services. |
| Transfer Fee | Equal to 50% of current initial franchise fee, if the center is open and operating. If not open and operating at time of transfer, it will be 100% of the initial franchise fee. |
| Renewal Fee | $5,000 |
| Relocation Fee | $1,000 provided that if the franchisor’s actual expenses exceed this amount. Franchisees must pay the amount which exceeds the fee. |
| Charges for Inspections and “Mystery Customer” Quality Control Evaluation | Varies |
| Late Fee and Interest on Overdue Payments | Late fee equals to 5% of the overdue amount. Plus, interest is equal to 1.5% per month, but not more than any maximum rate set by law. |
| Dues and Assessments Imposed by a Franchisee Advisory Council | Depends if the franchisee advisory council is established. |
| Center Refurbishment | Varies |
| Audit Expenses | All costs and expenses associated with the audit, reasonable accounting and legal costs. |
| Costs and Attorneys’ Fees | Varies |
| Standard Default Fee | Up to $250/violation. |
| Prohibited Product or Service Fine | $250/day of use of unauthorized products or services. |
| Failure to Provide Required Agreements | $250/day of failure to provide. |
| Additional Cure Expenses, Collection Costs, and Post-Termination/ Expiration Expenses | The franchisor’s cost and expense if needed to cure any default by franchisees under the FA. Plus, costs of collection for unpaid amounts. |
| Indemnification | Varies. |
| Liquidated Damages | See FDD. |
Did You Know?
- The daycare center offers quality child care for kids ranging from 6 weeks to 6 years old. Their bilingual program gears towards early cognitive growth. Added to that, the program also teaches children about respect for diversity; they believe that children learn best by doing.
- The State of Minnesota licenses the daycare franchise. Moreover, the center has received the highest possible rating from Parent Aware, a platform that offers helpful resources for families.
- As mentioned, the daycare takes pride in offering wholesome, organic food cooked by food manager-certified, and well-trained staff. The tuition also includes breakfast, lunch, two snacks, organic milk, organic infant cereals, and organic infant purees.
- Here’s a sample daily menu of the daycare center. For breakfast, it’s scrambled eggs with spinach and corn tortilla. Meanwhile, for lunch, it’s quinoa salad, avocado, mixed veggies, whole grain bread, and pineapple. Finally, whole-grain zucchini bread and cottage cheese for snacks. Yum!
- Their staff is trained in crucial child care aspects, such as Infant and Child First Aid, Shaken Baby Syndrome, Infant and Child CPR, and Reducing the Risk of SIDS.
By and large, knowing the Tierra Encantada franchise cost is only the beginning. You also need to take on the mission of addressing the demand for quality childcare and increased preference for language learning and wholesome food. And if you’re up for the challenge, Tierra Encantada is surely a viable business option for you.