Feel free to review our FAQs. If you have questions or concerns, please contact us and rest assured that your inquiry is completely confidential.
The Great Schools Franchisee Owners Association (GSFOA) is an independent association of The Goddard School® Franchisees – and an affiliated chapter for the American Association of Franchisees & Dealers (AAFD). GSFOA was formed in 2020 to help franchisees obtain benefits, such as low-cost healthcare, through the AAFD.
When private equity (PE) firm Sycamore Partners (Sycamore) acquired Goddard Systems, LLC (GSL) in 2022 that added a new dimension and dynamic to the franchisor/franchisee in 2022 that added a new dimension and dynamic to the franchisor/franchisee relationship that had not resulted from previous sales of our franchisor. The Sycamore acquisition was followed by changes that are still ongoing regarding what franchisors are expected to do and pay*. Sometime after the Sycamore acquisition, GSFOA members realized that the interests of franchisees and the franchisor are not always aligned and that a franchisee-controlled association could help franchisees collaborate with each other and our franchisor for the betterment of the franchise, franchisor, and franchisee experience.
*For more information on what PE ownership of a franchisor might mean to franchisees see this FAQ: Our franchisor was purchased by a private equity firm. What might that mean to franchisees?
Today, the GSFOA provides access to money-saving benefits and other services provided by AAFD, as well as GSFOA negotiated discounts on products and services that franchisees need. It also aims to improve the franchise and franchisees grow their businesses through networking, mentoring, and by collaborating with the franchisor to provide feedback on proposed or mandated actions together with inputs that help shape policies, tools, and practices that can benefit both franchisees and the franchisor.
The American Association of Franchisees & Dealers is a national trade association that represents franchise owners. By contrast, the International Franchise Association (IFA), of which our franchisor is a member, primarily represents the interests of franchisors. The AAFD is recognized by the American Bar Association, the IFA, the National Franchise Council, Franchise Times magazine, and others for its positive contributions to franchising.
When you join the GSFOA you will gain access to:
- Low-cost benefit plans and discounts on purchases that are not available through our franchisor or local brokers.
- Legal advice regarding your franchise renewal agreement from an attorney who is familiar with our franchisor’s agreements and can negotiate effectively on your behalf.
- Opinions about government actions that could negatively impact franchisees and that may not be held or shared by our franchisor or the IFA.
- Guidance and advice from experienced franchisees on how to manage your business; and,
- Help communicating with our franchisor about things that are important to your business.
What we are
The Great Schools Franchise Owners Association (GSFOA) is an independent association of The Goddard School® franchisees organized for a joint purpose with a desire for positive collaboration with our franchisor and to help franchisees realize the full potential of their businesses. Joining the GSFOA is like joining a trade association or a local Chamber of Commerce where members collaborate to help each other in business and legislative pursuits that affect members.
What we are not
The GSFOA is not a union, external group, or a third-party representative of owners. More specifically, because GSFOA members are not employees of our franchisor, the GSFOA is not a union as defined by the National Labor Relations Act (NLRA).
The GSFOA’s goals are to improve your business, protect your investment, and increase your influence using our collective voice to have constructive communications with our franchisor that can benefit franchisees and improve the franchise. Ideally, we want to grow the association from more than one hundred franchise locations to a few hundred locations with franchisees who support and benefit from the GSFOA’s services and our relationship with our franchisor.
If you would like to take advantage of the benefits, discounts, and services offered through the GSFOA and if you would like to preserve and increase the value of your business, please join the association. And if you have the interest, time, and skills, please volunteer to be considered for election as an officer or at-large board member.
Our franchisor does not recognize or endorse the GSFOA, but they stated in a June 8, 2023 letter to the Federal Trade Commission that “[we have] never retaliated against franchisees for participating in non-franchisor endorsed associations or franchisee groups.
We do not know why our franchisor does not want to recognize the GSFOA. However, it is possible, as can be reasonably inferred from a June 8, 2023 letter to the FTC from our franchisor’s CEO, that our franchisor is confident that any requirement or need for franchisee contribution to the franchisor’s decision making is satisfied by the GSAC and Input Groups, and that the operating models, tools, services, guidance, ECE curricula, etc. our franchisor provides are sufficient for franchisees to operate successfully.
It is important to know that the GSFOA was initially organized to help franchisees acquire benefits not available in their markets. Over time, the association evolved from its single founding purpose to focus on advocating for franchisees and assisting them in preserving and increasing the value of their businesses by providing third party services, discounts, webinars, tools, mentoring, and advocacy that successful franchisees have found necessary to supplement the operating models, tools, services, guidance, ECE curricula, etc. provided by GSL.
In pursuing its expanded purpose, the association does not intend to have an adversarial relationship with our franchisor.
The GSFOA’s primary purpose is to foster collaboration among its members and with the franchisor. The association is not adversarial unless any discussion between franchisees (buyers) and their franchisor (seller) is defined as adversarial. The GSFOA is a proponent of free market capitalism, which relies on willing buyers (franchisees) and sellers (franchisors), each with equal bargaining power, to create fair and mutually beneficial business relationships.
Visit the AAFD website to complete a membership application and arrange to pay the initiation fee and annual or monthly dues. When completing the application, select Join an Existing Chapter and choose Goddard School from the Franchise System dropdown menu and Education from the Industry drop down menu.
Click here to access the Membership Application.
You can join the GSFOA anonymously. To do this, instruct your attorney* to join on your behalf. Your attorney then becomes the public face of your membership while you receive the benefits association membership. By joining this way, neither our franchisor nor GSFOA members will know your identity. The GSFOA can, however, include you as a member in promoting its collective strength.
*Most AAFD-affiliated attorneys provide this service without charge or for a very modest fee.
Background:
Our franchisor, previously a privately held company, was purchased by Sycamore Partners, a private equity (PE) firm, in 2022. While the answer to this FAQ may not reflect Sycamore Partners’ plans for our franchisor because their plans have not been shared with us, according to franchise industry lawyers, this answer reflects common practices for PE firms.
When PE firms acquire a business, they usually have a five-to-seven-year ownership horizon during which time they seek to grow revenues and profits. At the end of their ownership horizon, PE firms usually plan to take the company public or sell it to another PE firm that has other ideas about how to generate more revenue and profit from the business.
What might PE ownership of a franchisor mean to franchisees?
To grow a franchised business, PE firms may invest in activities that foster growth and look for ways to reduce the franchisor’s operating costs through headcount reduction and by passing on service costs to franchisees through increased royalties or fees as allowed by franchise agreements.
To facilitate a PE firm’s growth objectives, franchisors may ramp up branding activities to build perceived value that attracts new franchisees and customers, and to bolster a future sale price. They may also seek to expand the number of physical locations to increase market share and revenues. And they look for ways to further increase profits by maximizing fees (e.g., marketing, technology), and adding new revenue streams from which royalties can be derived (e.g., new programs, services, products).
The bottom line for franchisees is that during a period of PE ownership – and afterward – they can expect:
- increasing pressure to increase revenues – even if ways promoted by the franchisor to increase topline revenues are not very profitable for franchisees to adopt;
- increases in existing fees as well as new fees to the extent they are allowed by franchise agreements; and
- increasing standardization across all locations (e.g., hours of operation, programs, location management, franchise agreements).
If our franchisor is taken public by Sycamore Partners before some of the other large childcare franchises are taken public by their PE owners, it would be the first franchised childcare business to go public. The two childcare businesses that have been taken public as of December 2024 are Bright Horizons and KinderCare Learning Companies, both of which operate centers wholly owned by the company.
The KinderCare IPO:
As a case in point of what can happen when a private equity firm acquires a childcare enterprise, after being loaded up with $1.6 billion in first lien term debt, KinderCare Learning Companies (KinderCare Learning Centers, Crème Schools, and Champions), acquired by Partners Group in 2015, were taken public nearly 10 years later in a NYSE IPO on October 9, 2024.
24,000,000 shares of common stock (approximately 30% of total shares) were offered in the $24-$27 range, selling for $576 million and resulting in a company valuation of approximately $2.75 billion. Partners Group, its affiliates and advisees, retained approximately 70% of the common stock. A little more than two months later (December 20, 2024), shares were trading around $17.50, down approximately 30% from the IPO, resulting in a reduced company valuation of approximately $1.9 billion.
About KinderCare (and Bright Horizons)
According to Partners Group, KinderCare, founded in 1969, is the largest private provider of early childhood education in the US as measured by the potential of its 2,400 centers with capacity to serve 200,000 children. Bright Horizons Family Solutions, Inc. is the second largest and is also publicly traded with a significant portion of its stock held by Bain Capital, the private equity firm that took it public. KinderCare centers are wholly owned by the parent company, just like Bright Horizons. KinderCare brands fuel growth mainly by acquiring existing centers. They serve families with children ranging from six weeks to 12 years old and in the fall of 2024, they employed more than 43,000 teachers and staff.
During the nearly 10 years KinderCare Learning Companies were owned by Partners Group, the private equity firm facilitated business transformations geared to support and accelerate growth. Transformation initiatives included optimizing center footprints, driving same-center revenue growth and occupancy, and investing in curricula, human capital, and technology.
Additional Reading
To learn more about the impact private equity ownership of childcare centers and franchises is having on the industry and operators, read this in-depth article titled “The End User Is a Dollar Sign, It’s Not a Child”: How Private Equity and Shareholders Are Reshaping American Child Care, published by EarlyLearningNation.com. The article takes a deep dive into private equity and the childcare space where in the U.S. 9 of the 11 largest childcare center ‘chains’ are now either publicly held (e.g., Bright Horizons and KinderCare) or owned by private equity firms (e.g., The Goddard School®, Primrose School®, The Learning Experience®, etc.).
