Primrose Schools expands in California
By Maria Saporta
Published in the Atlanta Business Chronicle on September 27, 2013
As business leaders develop a growing appreciation for the value of early education, one metro Atlanta company is becoming a national force in the field.
Primrose Schools, based in Acworth, Ga., is becoming a major national player in the child-care business by offering franchise opportunities.
Today, Primrose has 276 schools in 34 markets in 18 states — and it has awarded five franchises in California, with the first opening later this year and all five to be open by 2015. It is part of the company’s dramatic growth strategy.
“Our goal is to have about $1 billion in revenues in about seven years,” said Jo Kirchner, president and CEO of Primrose Schools. “We are close to half of that right now.”
Kirchner’s influence in the field of early-childhood education was evident at ReadyNation, the 2013 National Business Leader Summit on Early Childhood Investment, which was meeting in Atlanta Sept. 22-23.
About 200 business and educational leaders convened in Atlanta to discuss the need for greater investments in birth-to-kindergarten education as a way to minimize a host of societal challenges later on in life. Primrose was one of the sponsors, and Kirchner was one of the presenters at ReadyNation.
Kirchner readily admits that Primrose serves a relatively affluent population of parents who need quality child care while they work. But she also recognizes the larger societal need to provide quality early education for families with limited means.
U.S. Secretary of Education Arne Duncan addressed ReadyNation urging business leaders to support a partnership between the federal government and state and local governments to provide greater access to early education. Duncan said that the country needs to double its child-care capacity to serve everyone currently on waiting lists.
Even in the wealthier Primrose demographic, Kirchner said they’ve identified a need for 600 more schools nationwide.
The Primrose story is rather remarkable. It was founded in 1982 by Paul and Marcy Erwin. Kirchner joined Primrose in 1990 as a vice president. When she became president and CEO in 1999, Primrose had a total of four schools.
When the company adopted a franchise model, it experienced dramatic growth — fueled by investments from private equity firms. Today Primrose is owned by Roark Capital, also based in metro Atlanta.
To buy a franchise usually requires an investment of about $300,000 to $400,000 plus a loan of between $2.8 million to $3 million. The company’s training and pilot center is located at its headquarters in Acworth.
“This year we will probably open 24 schools, and we have 89 schools in the pipeline to open in the next two and a half years,” Kirchner said, adding that Primrose now has opened four urban schools — showing that it is branching out from its traditional suburban model.
Texas has nearly 100 Primrose schools (there are 42 in Georgia), and Kirchner said it’s possible that California could become an even bigger market for the company than the Lone Star state.
“California is a large market with potential for significant growth,” Kirchner said. “California’s population is over 38 million, almost 50 percent larger than Texas. The state has a highly educated population of young, affluent people who are seeking a high-quality early education experience to prepare their children for their future.”
The five franchise agreements that Primrose has signed for California will have schools located in Los Angeles, San Diego and the San Francisco Bay area.
Kirchner said Primrose plans to open 28 new schools in California in the next five years, and that is just the beginning.
“After conducting extensive demographic research, we found that California has a high demand for quality, early childhood education, but providers are limited,” she said.
As Primrose continues its growth curve, Kirchner is becoming increasingly involved in efforts to make sure early-childhood education is not just available to the wealthy.
Kirchner has joined the boards of several organizations working in the child-care field. She said she is exploring ways in which Primrose can partner and share what it has learned about early-childhood education to others as a way ”to improve the educational outcomes for all children.”