For profit organizations showing signs of turnaround · FOR PROFIT CHILD CARE 29 Reprinted with permission fr JANUARY/FEBRUARY 2011 EXCHANGE For profit organizations showing signs

FORPROFITCHILDCARE 29 JANUARY/FEBRUARY2011EXCHANGE

For profit organizationsshowing signs of turnaround

Twenty-fourth annual Status Report on for profit child carebyRogerNeugebauerandDebraHartzell

The year 2010 will not be remembered as a banner year for large for profit child care organizations. But it appears that heading into 2011, optimism has returned.

No growth at top continues

In 2010, the total capacity of the three largest for profit chains in North America (see the Exchange Top 50 on page 30), KinderCare Learning Centers, Learning Care Group, and Bright Horizons Family Solutions declined slightly. This is a con-tinuation of a trend that has held for the past four years with their combined capacity declining slightly each year (see Growth of the Big Three Chains, on page 32).

This does not, in any way, mean that these three organizations are fading away. In fact, the total capacity of these three organizations is nearly double the total licensed capacity of the next 47 organiza-tions on the Top 50 list. You would proba-bly need to include the next 400 largest organizations in North America before you could match the capacity of the big three.

Franchise organizations playing larger role

Back in the early 1970s when child care centers were exploding onto the scene,

many of the original for profit chains, including KinderCare, started out as franchise ventures. The leaders of these organizations soon discovered that it was not possible to maintain quality control over either the business or programmatic aspects of franchised centers. So one by one the players moving forward in the industry shifted over to the company-owned model. By the mid-’80s the only franchise operation of any size remaining was Mary Moppets, which eventually was purchased and dismantled.

By the mid-1990s our understanding of the mechanics of successful early child-hood businesses had improved greatly, as had our ability to manage from afar with technology. So in January 1991, we find the first of a new wave of franchise organizations, Primrose Schools, pop-ping up on the Exchange Top 50. In the coming two decades the number of fran-chise operators has multiplied and today they oversee over 1,000 franchised cen-ters (see National Child Care Franchising Organizations).

2010: Year of living cautiously

Last year was a slow year for most Top 50 organizations. Although some organi-zations expanded, in total, licensed capacity of the Top 50 remained flat. Organizations held tight and focused on improving quality of the centers they already had in place. Some examples:

Sunrise Preschools: Our fabulous peo-ple are challenged to do more with less.

Children’s Friend: The economy contin-ues to weigh heavy on our plans.

Children’s Choice has responded to the current condition of the economy by working closely with our sponsors and our families to ensure that we are meet-ing the changing needs of the American family. We have found that families need more flexibility. Children and fam-ilies are dealing with unusual amounts of stress in the home and workplace, and we have looked for creative ways to address and reduce stress for them. We have revisited the extra curricula pro-grams that we offer our children to ensure that they are consistent with our goals. We had to listen to our families more closely than ever to ensure that we were meeting the specific needs of that particular community of families. (Are we planning events that are meaningful, timely, and events that are not adding to the stress of the family?) We have worked hard to question the traditional way of operating to ensure that we are progressive, yet consistent, with what we know children and families need and want as they partner with us.

KinderCare Learning Centers: Lever-aged expertise in primary and middle school ECE programs to offer science

Reprinted with permission from Exchange magazine.Visit us at www.ChildCareExchange.com or call (800) 221-2864.Multiple use copy agreement available for educators by request.

30 FORPROFITCHILDCARE EXCHANGEJANUARY/FEBRUARY2011

The Exchange Top 50North America’s Largest For Profit Child Care Organizations

Organization Headquarters CEO Centers Capacity KinderCare Learning Centers Portland, Oregon Felicia Thornton 1,641 218,300 Learning Care Group, Inc. Novi, Michigan James Howland (acting CEO) 1,036 156,110 Bright Horizons Family Solutions Watertown, Massachusetts David Lissy 730 80,000 Nobel Learning Communities, Inc. West Chester, Pennsylvania George Bernstein 184 28,500 Child Development Schools Columbus, Georgia J. Scott Cotter 160 22,874 Phoenix Children’s Academy Scottsdale, Arizona Douglas MacKay 115 21,000 The Sunshine House Greenwood, South Carolina Ed Follen 144 20,023 Minnieland Private Day School, Inc. Woodbridge, Virginia Charles W. Leopold 115 13,814 New Horizon Academy Plymouth, Minnesota Chad Dunkley 86 13,032 CCLC Inc. Sunnyvale, California Ty Durekas 102 12,343 Children of America Delray Beach, Florida Thad Prior 46 9,000 Brightside Academy, Inc. Pittsburgh, Pennsylvania Mark Kehoe 49 7,840 Crème de la Crème Greenwood Village, Colorado Bruce Karpas 24 7,000 Children’s Choice Learning Centers, Inc. Richardson, Texas Donna McClintock 41 6,902 Sunrise Preschools Tempe, Arizona Robert Orsi 27 5,653 Children’s Friend, Inc. Warner Robins, Georgia Dewayne Foskey 39 5,629 Rainbow Child Care Centers Troy, Michigan Patrick Fenton 33 4,600 Hildebrandt Learning Centers, LLC Dallas, Pennsylvania William J. Grant 41 4,325 Action Day Nurseries/Primary Plus, Inc. San Jose, California Carole J. Freitas 20 4,450 Country Home Learning Center San Antonio, Texas Sharon K. Ford 10 4,180 Creative World Schools Bonita Springs, Florida Billie McCabe 21 3,550 Stepping Stone School Austin, Texas Rhonda Paver 18 3,374 Rainbow Station, Inc. Glen Allen, Virginia Gail W. Johnson 9 3,131 Acelero Learning New York, New York Aaron Lieberman 32 3,054 Pinecrest Schools Sherman Oaks, California Jeri Dye 10 3,000 Ascendere, Inc. Lawrenceville, New Jersey Harsh Chadha 21 2,984 Stratford School Saratoga, California Matthew Wulfstat 11 2,900 Rogy’s Learning Place Peoria, Illinois Wendy Pettett, Dawn Meyer, and Rick Rogy 20 2,884 Youthland Academy Cincinnati, Ohio Amanda Bottleson and Courtney Berling 15 2,875 The Malvern School Glen Mills, Pennsylvania Joseph Scandone and Kristen Waterfield 20 2,847 *Tot-Time Child Development Centers, Inc. Plymouth Meeting, Pennsylvania Donna M. Fluehr 27 2,672 StarChild Academy Apopka, Florida Cindy Zimmerman 6 2,441 Next Generation Children’s Centers Sudbury, Massachusetts Donna Kelleher 10 2,200 Creative Playrooms, Inc. Solon, Ohio Joan Wenk 8 2,047 Sunny Daze, Inc. Edmond, Oklahoma Mike North 11 1,950 Junior Academy Children’s Centers Colorado Springs, Colorado Carroll Holden 32 1,872 *Valley Child Care & Learning Centers/Cactus Preschools Phoenix, Arizona James Emch and Mike Emch 10 1,830 Kid’s Country, Inc. Snohomish, Washington Lynnda Langston 11 1,758 The Children’s Workshop Cumberland, Rhode Island David B. MacDonald 15 1,712 Bobbie Noonan’s Child Care Frankfort, Illinois Judith Nevell 13 1,700 Clockwork Learning Westport, Connecticut David H. Lyme 12 1,668 The Kinderville Group Candiac, Quebec Manishi Sagar 22 1,524 Doodle Bugs! Children’s Centers Buffalo, New York Anthony Insinna 9 1,510 Children’s Discovery Center, Inc. Maumee, Ohio Lois Rosenberry 8 1,448 Creative Child Care, Inc. Bedford, Texas Alex Little 12 1,367 EduKids, Inc. Buffalo, New York Nancy Ware 12 1,262 U-GRO Learning Centers Harrisburg, Pennsylvania Gregory T. Holsinger 11 1,256 Children’s Corner Learning Centers Tarrytown, New York Anthony Ross 10 1,181 The Gardner School Brentwood, Tennessee Scott Thompson 6 1,170 K.I.D.S. Day Care Westmount, Quebec Evelyn Wajcer 13 1,061

Based soley on information supplied by the organizations. Data on capacity in chart above is the total licensed capacity for all centers as of January 1, 2011.*Data from organizations marked with an asterisk are from the 2010 report.

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newspaper, The Boston Globe, for our commitment to employees and to each other and for being a “Caring Com-pany.” . . . Our Going Green initiative, part of the Toward a Better World pro-gram, is also a core focus both in the classrooms and at the administrative levels of our centers and our organiza-tion. Well Aware is Bright Horizons’ approach to health, fitness, and well-ness. It has components focused both on curriculum for children, as well as how we care for employees with a renewed emphasis on wellness programs through our practices and benefits offerings. . . . We also introduced in 2010 a variety of new Awards of Excellence to honor employees for their contributions to “Caring for Others,” practicing our HEART Principles, Community Service, Diversity Champions, Environmental Champions, Excellence in Care and Education, Family Partnerships, Client Partnerships, and Rising Stars in the Field.. . . 2010 we launched a learning management software platform to increase our capabilities within Bright Horizons University (BHU), our greatest and most tangible way of reinforcing our commitment to ongoing training and development and continuing contri-bution to the professional growth of Bright Horizons teachers.

curriculum throughout our centers. Developed broader summer programs, based on feedback and requests from families.

The Children’s Workshop has under-gone some very big and very exciting changes in 2010! We’ve invested heavily in our facilities, vehicles, and most importantly, our staff. New vans, improved interiors, and bigger and bet-ter playgrounds — we’ve been busy giving our buildings a face lift, but we’ve been hiring many great new teachers and administrators, too. We’ve made some changes in our upper level management and are in the process of improving our curriculum as well. The company has made a commitment to get more involved with our communi-ties.

Bright Horizons Family Solutions: 2010 has been a key year for investing smartly in our people and our systems, and toward that end, we implemented a series of initiatives focusing on the health and wellness of the children in our care, our faculty, our communities, and our planet. All of these initiatives are among those that will play a large role in our plans for 2011 and beyond and reinforce our mission. We are also proud to recently have been named the #1 Best Place to Work by our hometown

Creme de la Crème offered parenting seminars in all markets on social emo-tional development based on the book How to Raise Emotionally Healthy Children by Dr. Gerald Newmark.

Rogy’s Learning Place: We added a new building for one of our locations in Nor-mal, Illinois. It is a beautiful building that has a turf surface for all the play-grounds with a water feature for outside play. How cool is that!!

Kiddie Academy Domestic Franchising: We have focused on customer service and further integration of technology within our schools.

Children’s Discovery Center: Several members of our team have collaborated, and with Dr. Sandra Duncan, have co-authored the book, Inspiring Spaces for Young Children and its companion, Rating Observation Scale for Inspiring Spaces. We are planning to expand into training, consulting, and developing products to enhance early childhood environments.

The Gardner School: We have invested in our employees and are offering a much more enriched benefit program. We will be offering a company match for our 401K.

Largest National Child Care Franchising Organizations

Organization Headquarters CEO Centers Capacity*Goddard Systems, Inc. King of Prussia, Pennsylvania Joe Schumacher 370 45,000 Primrose Schools Franchising Company Acworth, Georgia Jo Kirchner 225 41,000 Kids R Kids International Duluth, Georgia Patrick D. Vinson 155 38,500 The Learning Experience Boca Raton, Florida Michael H. Weissman 110 18,480 Kiddie Academy Domestic Franchising Abingdon, Maryland Michael J. Miller 109 16,194 Discovery Point Franchising Duluth, Georgia Clifford Clark 59 13,275 Children’s Lighthouse Fort Worth, Texas G. Michael Brown, Sr. 29 6,996 *Legacy Academy for Children, Inc. Sugar Hill, Georgia Melissa & Frank Turner 20 5,000 Youthland Academy (Franchise) Cincinnati, Ohio Amanda Bottleson/Courtney Berling 8 1,560

*Data from organizations marked with an asterisk are from the 2010 report. Based solely on information supplied by the organizations.

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Rainbow Child Care Centers: Organic build upon existing footprints of schools. Entering a new territory in the southern region of the United States. Capitalize on the increasing importance of early education for children and to provide a high level of service in addi-tional communities.

Exchange will be back in January 2012 with our Twenty-Fifth Annual Trend Report to explore how all these fine plans work out.

enhancements we feel we now can move to 60 to 70 centers in the next five years.

Child Development Schools: We will likely experience an ownership change by the end of 2010 or early 2011. With this change, we fully expect to restart our center acquisition program.

Stepping Stone School: We will be add-ing another child development center and continue to look for growth oppor-tunities moving forward.

Doodle Bugs! Children’s Centers: In 2011, we will be opening our fourth center in Rochester, New York, and first out-of-state location in Pittsburgh, Pennsylvania. We will also be launching our franchising program in Florida, Pennsylvania, Ohio, and Maryland.

Acelero Learning: We have begun oper-ations in Pennsylvania as well as in new parts of New Jersey.

Children of America continues to grow in strategic locations which we will con-tinue to do in the coming years. We are currently located in 12 states.

Children’s Lighthouse: Went ‘green’ in our centers throughout the nation. Chose Ronald McDonald House as our national charity of choice.

Youthland Academy: For the past two years, Youthland Academy has imple-mented a new curriculum for our pre-school and toddler programs. Due to the success of those programs, our curricu-lum coordinator has developed a pro-gram for our infants. This will be intro-duced in a few of our centers late 2010 and fully used by all by early 2011.

2011: The optimism returns

In looking ahead to 2011, 24 of the Top 50 organizations, including two of the ‘big three,’ reported to Exchange that they planned to add new centers in 2011. Here is what some of them had to say:

Clockwork Learning: We have come out of the very tight past couple years and have found that certain schools have increased enrollment consistently each month, while others have been slow. We expect next year to be very strong with growth both in tuition/enrollments, but also school acquisition within the tri-state area.

CCLC: Many of our global clients are evaluating opportunities to partner with us in countries where they have employ-ees. We have seen a resurgence in new center opportunities and are working with many new clients who would pre-fer not to operate their own child care centers in the future. This includes pro-viding dedicated backup child care cen-ters in key markets.

Hildebrandt Learning Centers: Our focus in 2010 was transforming our company from a small organization into a small/medium provider. This transfor-mation included development of staff to continue to deliver high quality pro-grams to our families. With these

Growth of the Big Three ChainsTotal licensed capacity (in thousands) for three largest for profit child care organizations.

2008 2009 2010 2011KinderCare 250 232 227 218Learning Care Group 162 163 157 156Bright Horizons 73 73 77 80combined capacity 485 468 461 454