Buying a Kids 'R' Kids franchise: SBA acquisition loan data
Since FY2018, SBA lenders have approved 20 7(a) loans to buy an existing Kids 'R' Kids (classified mostly as Child Care Services), totaling $57.8M. The median loan was $2,925,350, 353% higher than the $645,250 median for all SBA-financed acquisitions. 5 of these loans were approved in the last two fiscal years.
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What this tells a buyer
- Price range to expect. Loan size tracks purchase price. Half of Kids 'R' Kids resale loans landed between $1,442,500 and $4,783,475.
- Lender experience exists. Live Oak Banking Company alone has financed 4 Kids 'R' Kids resales.
- Guaranty. The SBA guaranteed 74% of the dollars lent here.
- What the file leaves out. The SBA file does not record franchisor transfer terms or fees.
Financing a Kids 'R' Kids resale
The median SBA 7(a) loan for a Kids 'R' Kids resale was $2,925,350 across 20 loans (FY2018 to FY2026). Live Oak Banking Company, PNC Bank, National Association and Plains State Bank have financed the most Kids 'R' Kids resales. Too few of these loans are old enough to measure a charge-off rate; the average for all SBA acquisition loans is 3.5%.
Kids 'R' Kids acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 6 | $19M | $3,175,350 | |
| FY2019 | 4 | $16.1M | $4,725,000 | |
| FY2020 | 2 | $5.5M | $2,774,900 | |
| FY2021 | 1 | $2.9M | $2,850,000 | |
| FY2022 | 0 | $0 | - | |
| FY2023 | 1 | $5M | $5,000,000 | |
| FY2024 | 1 | $580K | $580,000 | |
| FY2025 | 2 | $1.5M | $735,000 | |
| FY2026 | 3 | $7.2M | $1,600,000 |
How often do these acquisition loans fail?
Fewer than 20 Kids 'R' Kids acquisition loans are old enough to measure losses reliably, so no charge-off rate is shown. The benchmark across all SBA acquisition loans in the FY2018 to FY2021 cohort is 3.5% by count. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.
"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.
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Lenders financing Kids 'R' Kids resales
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Live Oak Banking Company | 4 | 20.0% | $16.1M | |
| 2 | PNC Bank, National Association | 4 | 20.0% | $12.8M | |
| 3 | Plains State Bank | 2 | 10.0% | $5.7M | |
| 4 | The Huntington National Bank | 2 | 10.0% | $5.6M | |
| 5 | Bankwell Bank | 1 | 5.0% | $5M | |
| 6 | Texas Capital Bank | 1 | 5.0% | $3.8M | |
| 7 | United Bank | 1 | 5.0% | $2.9M | |
| 8 | First Bank | 1 | 5.0% | $2.3M | |
| 9 | Pinnacle Bank | 1 | 5.0% | $1.6M | |
| 10 | Fifth Third Bank | 1 | 5.0% | $970K |
States where Kids 'R' Kids units are bought
| # | State | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Texas | 10 | 50.0% | $29.6M | |
| 2 | Florida | 3 | 15.0% | $9.7M | |
| 3 | Georgia | 3 | 15.0% | $6.8M | |
| 4 | North Carolina | 2 | 10.0% | $8.4M | |
| 5 | Kansas | 1 | 5.0% | $1.7M | |
| 6 | New Jersey | 1 | 5.0% | $1.6M |
Terms signed in the LOI shape the purchase agreement that follows.
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How lenders classify Kids 'R' Kids
Lenders code each loan to a NAICS industry. For Kids 'R' Kids the codes used were:
| # | Industry | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Child Care Services | 17 | 85.0% | $51.5M | |
| 2 | Child and Youth Services | 3 | 15.0% | $6.2M |
Questions buyers ask
How much do buyers borrow to buy a Kids 'R' Kids franchise?
The median SBA 7(a) loan for a Kids 'R' Kids resale was $2,925,350 across 20 loans (FY2018 to FY2026). The middle half of loans ran from $1,442,500 to $4,783,475. The loan excludes the buyer's equity and any seller note and may include working capital, so the price is usually higher than the loan.
Which banks finance Kids 'R' Kids acquisitions?
Live Oak Banking Company has made the most SBA acquisition loans for Kids 'R' Kids (4, 20% of the total). PNC Bank, National Association, Plains State Bank, The Huntington National Bank follow.
What interest rate and term do Kids 'R' Kids acquisition loans carry?
The average initial rate at approval was 6.83% (a blend of fixed and variable loans across several rate environments, so treat it as context, not a quote). The median term was 25 years.
Is a Kids 'R' Kids resale riskier than other SBA-financed acquisitions?
Too few Kids 'R' Kids acquisition loans are old enough to measure. The benchmark for all SBA acquisition loans is 3.5% charged off in the FY2018 to FY2021 cohort.
Where are Kids 'R' Kids units being bought with SBA loans?
Texas (10), Florida (3), Georgia (3), North Carolina (2), Kansas (1). State counts follow where the brand has units and where SBA lending is most active generally; see the state pages for the overall picture.
Terms signed in the LOI shape the purchase agreement that follows.
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Related
- All Child Care Services acquisitions
- Texas acquisitions
- Florida acquisitions
- Georgia acquisitions
- Live Oak Banking Company
- PNC Bank, National Association
- Plains State Bank
- All franchise brands
Brand name as recorded by lenders in the SBA file: "Kids 'R' Kids" (franchise code S0944). Figures are aggregates of public SBA data and are not provided or endorsed by the franchisor.