Brand Analysis
Goddard School: two schools at the same revenue, half a million apart — and which drivers the disclosure supports.
Goddard is one of the few franchise systems that discloses results school by school rather than only in aggregate, which makes the drivers of the spread unusually legible. Reported gross revenue across 620 mature schools ranged from $716,896 to $6,594,330.
What the filing supports.
1. Cost structure, not size
The average school out-earns the median on every disclosed line, which tells you the mean is being pulled up by strong performers rather than describing a typical outcome. More importantly, the spread survives when you control for revenue — schools doing the same volume land very far apart on EBITDA.
| Line (FY2025) | Average | % of rev | Median | % of rev |
|---|---|---|---|---|
| Gross revenue | $2,507,631 | — | $2,329,913 | — |
| Payroll | $968,761 | 40.1% | $921,350 | 40.6% |
| Occupancy | $329,645 | 13.6% | $309,479 | 13.6% |
| Misc items | $662,671 | 27.4% | $625,695 | 27.6% |
| Total expenses | $1,961,077 | 81.1% | $1,845,473 | 81.4% |
| EBITDA | $546,554 | 21.8% | $474,693 | 20.9% |
2. Payroll discipline
The dominant line at 40.1% of revenue, and the one that decides the year. Note the direction of the relationship though: strong schools generally pay more in absolute dollars and less as a percentage, because they have filled the classrooms those teachers already staff. Cutting staff at an under-enrolled school reduces the capacity to enroll — the same loop we work through in why your payroll percentage isn’t a payroll problem.
3. Occupancy, fixed at signing
Occupancy averaged 13.6% of revenue but the disclosed schools range widely around it. Rent is set at lease signing and lived with for the term, which makes site selection the least reversible decision in the deal. The disclosed EBITDAR of $876,198 against EBITDA of $546,554 shows how much of the outcome rent alone accounts for.
The real estate structure makes the point sharper. A leased site with landlord-funded improvements and a ground-up build with land acquisition are different businesses at identical revenue, because debt service scales with the capital deployed. Item 7 discloses the range; the end you land on moves return more than most operating decisions will.
4. Miscellaneous cost discipline
At 27.4% of revenue this is larger than most operators expect — royalties, marketing, utilities, supplies, technology, professional fees. It is the least examined line on the statement and often the most recoverable.
What the filing does not support — but structure suggests.
Three further drivers are commonly named and entirely plausible. None appears in the disclosure. Item 19 reports revenue, payroll, occupancy, miscellaneous, and EBITDA by school. It does not report enrollment, capacity, age mix, or staffing detail.
5. Enrollment utilization
Probably the variable underneath most of the cost ratios above. Rent is fixed whether you fill 90 seats or 160, so a school at 60% of licensed capacity shows an occupancy ratio that the same building at 90% would show several points lower. Most weak cost ratios in this system are likely reporting under-enrollment rather than overspending. Not disclosed — the FDD reports capacity nowhere and enrollment nowhere.
6. Age mix
Infant rooms carry far heavier state-regulated staffing ratios than pre-K. The ages you enroll are a margin decision that frequently gets made as an enrollment decision. Structurally certain, not disclosed.
7. The director hire and local marketing
The director is a required non-owner hire, and only trained staff may tour prospective families — which makes a director vacancy a direct constraint on the enrollment funnel. Separately, royalty and marketing fund contributions total 11% of gross receipts, but brand-level spend is not local lead generation; the dollars that fill your seats are incremental to that. Both are structural features of the agreement rather than disclosed performance data.
One thing to hold in view on the benchmark.
Roughly 23% of mature schools earn under $250,000 in EBITDA and about 4% run negative, while about 12% clear $1M. And the disclosed EBITDA sits before your salary, debt service, taxes, and depreciation — so the gap between median reported EBITDA and what actually reaches an owner is wider than the headline suggests, particularly on a debt-funded build.
For the full disclosure walkthrough — averages against medians on every line, the two-year trend, and the reporting population — see the Goddard School unit economics teardown. Part of our Childhood & Early Education Franchise Finance guide.
Frequently asked.
How much does the highest-grossing Goddard School make?
In the 2026 Franchise Disclosure Document covering fiscal year 2025, reported gross revenue across 620 mature schools ranged from $716,896 to $6,594,330. The average was $2,507,631 and the median $2,329,913. Average EBITDA was $546,554, or 21.8 percent, with median EBITDA of $474,693.
Is the performance gap between Goddard schools about size or cost structure?
Mostly cost structure. Sorting the mature schools by EBITDA, the top quartile averages roughly eleven times the bottom quartile's EBITDA on only about twice the revenue. Isolating schools at nearly identical revenue between $2.0M and $2.8M, the top quartile within that band still earns several hundred thousand dollars more EBITDA than the bottom quartile at the same revenue. That difference is entirely cost structure, not market.
What are the biggest costs in a Goddard School?
Payroll at 40.1 percent of revenue on average, miscellaneous items at 27.4 percent covering royalties, marketing, utilities, supplies and professional fees, and occupancy at 13.6 percent covering rent and property tax. Total expenses average 81.1 percent of revenue. Because payroll dominates, staff-to-child ratios and the age mix you enroll are the primary margin levers.
Why does age mix affect Goddard School margin?
State-regulated staffing ratios differ sharply by age band. Infant rooms require far more staff per child than pre-kindergarten rooms, so an infant-heavy enrollment carries a materially higher payroll cost at the same headcount of children. That makes the age mix you enroll a margin decision, though it is frequently treated as purely an enrollment decision. The FDD does not disclose age mix, so this is structural rather than reported.
Does reported EBITDA reflect what a Goddard owner takes home?
No. EBITDA excludes interest, taxes, depreciation, and amortization, which means it sits above debt service on the initial investment. It is also before owner compensation. Because the disclosed investment range spans a leased site with landlord-built improvements at one end and a ground-up build with land at the other, debt service alone can consume a substantial share of median EBITDA depending on how the site was financed.
Run your own numbers.
The Franchise Finance Diagnostic compares your trailing-twelve figures against your brand’s Item 19 disclosures. Free, and everything runs in your browser.
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By Heather Engler, Esq.
Founder & Principal, Capital Advisors
Heather blends legal training with deep expertise in bookkeeping and tax compliance, giving her a unique perspective on financial strategy, risk management, and operations. Under her leadership, Capital Advisors serves hundreds of clients across bookkeeping, tax, payroll, and financial advisory. More about the team →