The Validation Call Playbook: 25 Questions That Surface What the FDD Cannot Tell You About Owning a Goddard School

Franchise buyers spend weeks on the FDD and pro formas and far less time on validation calls — direct conversations with current and former franchisees — even though those calls produce the only unfiltered operational data available before signing.

The FDD is a legal document drafted by the franchisor’s attorneys. It discloses what the FTC Franchise Rule requires and little more. Item 19 can tell you the system’s average revenue — Goddard’s mature-school average is approximately $2.5 million — but it cannot tell you what it costs to generate that revenue in your specific market. For that, you need the people who are living it.

The GSFOA’s complaint to NASAA alleged, among other things, that franchisees underreport rent expenses. Whether or not those allegations are substantiated, they highlight a structural reality: categories of operating cost do not appear in the FDD’s financial performance representation. Validation calls are the primary verification mechanism for every assumption in your financial model.

What follows is 25 questions organized by topic, each designed to surface a specific risk the FDD does not address. The answers — and especially the patterns across multiple calls — will tell you more about the actual economics of a Goddard school than any single document in the franchise sales process.

A poorly structured process — three calls to the franchisor’s recommended contacts — produces a curated impression. A well-structured process produces something closer to operational truth.

Call 8 to 12 franchisees minimum. Patterns do not emerge from three data points. If six of ten franchisees say insurance premiums doubled after the first renewal, that is a finding. If one of three says it, you cannot tell whether it is an outlier or the norm.

Build a diverse sample:

• New operators (1–3 years open): Closest to the experience you are about to have. They remember the ramp and the gap between expectations and reality.
• Established operators (5+ years): They have seen fee changes, vendor switches, lease renewals, and at least one economic cycle.
• Different markets: A Goddard school in suburban Philadelphia operates in a different reality than one in suburban Dallas.
• Different investment paths: A ground-up build produces a different capital story than a commercial conversion.

Do not limit yourself to the franchisor’s recommended list. The development team will connect you with franchisees prepared to talk. They are helpful, but they are a curated sample. Item 20 gives you the name and phone number of every franchisee in the system. Use it.

Call some who left. Item 20 also lists franchisees who have left the system — transfers, terminations, non-renewals. These conversations contain information no current franchisee can give you: what the exit process actually looked like and what they would have done differently. NASAA maintains complaint records that can help identify former franchisees who had regulatory disputes.

Operational discipline:

• Take notes immediately after each call, not during. People talk more freely without a visible transcript.
• Never record without explicit permission.
• Never have a franchisor representative on the call. If the development team offers to “set up” the call, decline.
• Keep a running spreadsheet to spot patterns as you go.

These questions target the gap between disclosed investment figures and actual capital deployed. The FDD’s Item 7 investment range and Item 19 revenue figures provide the scaffolding; validation calls fill in the load-bearing details that the scaffolding does not carry.

Question 1: What was your total out-of-pocket cost to open, including everything not in Item 7?

Why this matters: Item 7 discloses a range of $1.0M to $1.5M for the build-to-suit lease path. But it is not a complete accounting of every dollar that leaves your bank account between signing and opening. Permit expediting fees, interest carry during construction, deposits that exceed the estimated range, legal fees for lease negotiation — these sit outside or at the margins of the disclosed range. The IFA’s franchise information resources describe standard FDD structure, but the gap between the disclosed range and the actual check is the number you are looking for.

Question 2: How long from signing the franchise agreement to first revenue, and how long to breakeven?

Why this matters: Goddard’s enrollment ramp is one of the most consequential variables in the financial model. The FDD does not disclose time-to-breakeven. Third-party analysts estimate 18 to 24 months of operation, but the clock on capital deployment starts at signing — typically 12 to 18 months before doors open. Most buyers finance through SBA 7(a) loans, and the total capital commitment period from signing to cash-flow-positive may be 30 to 42 months. Franchisees who have lived through it know the real number.

Question 3: What is your actual monthly insurance premium, and has it changed in the last two years?

Why this matters: Childcare liability insurance has undergone significant repricing industry-wide. What a franchisee paid in year one may bear little resemblance to what they pay now. The premium trajectory matters more than the starting point — if premiums are increasing 15% to 25% annually, your five-year model needs to reflect compounding, not a flat line.

Question 4: What does the curriculum and technology stack actually cost per year, beyond the $700/month fee?

Why this matters: Goddard’s monthly technology and curriculum fee is disclosed. What is less visible is the total cost of implementation — training time, supplementary materials, hardware refreshes, any upgrades mandated by the franchisor mid-year. The Wonder of Learning curriculum rollout involved real costs beyond the monthly fee. Franchisees who have been through it can quantify the delta.

Question 5: What is your actual rent or mortgage payment, and how does it compare to what was projected during the sales process?

Why this matters: Real estate is the largest fixed cost in a Goddard operation. The GSFOA complaint alleged underreporting of rent, which would mean aggregate cost data understates occupancy expense. The direct question bypasses any aggregation problem and gives you a market-specific data point.

Question 6: At what enrollment level did you become cash-flow positive?

Why this matters: A school licensed for 162 children might break even at 110 or at 135, depending on cost structure, tuition, and age-group mix. The enrollment breakeven point, combined with your market’s ramp data, tells you how long your working capital needs to last.

Question 7: If you could re-do your financial model, what number would you change?

Why this matters: The specificity of the answer is itself a data point. “I underestimated staffing costs by $4,000 a month” is a model input. “Everything was about right” is a different signal. If eight of ten name the same line item, your model has a known weakness before you sign.

Operational reality determines whether the revenue line in your model converts to actual cash flow. These questions target staffing economics, the daily mechanics of running a school, and the gap between the franchisor’s operational promises and the franchisee’s lived experience.

Question 8: How many teachers do you currently employ, and how many open positions do you have right now?

Why this matters: A school with 25 teachers and zero openings is in a fundamentally different state than one with 22 teachers and three vacancies. Unfilled positions mean closed classrooms, capped enrollment, and revenue below capacity. This is the staffing crisis expressed as a number.

Question 9: What is your actual teacher turnover rate?

Why this matters: Childcare teacher turnover nationally runs 26% to 40% annually. High turnover is a direct financial cost (recruiting, training, lost productivity) and an indirect revenue problem — parents leave schools with unstable classrooms.

Question 10: How long does it take to fill a teaching position in your market?

Why this matters: Two weeks is an inconvenience. Eight weeks means two months of reduced capacity and the revenue loss that follows. A school near a community college with an ECE program has a different pipeline than one where the cost of living prices out childcare workers.

Question 11: What is the biggest operational surprise in your first two years?

Why this matters: The value is in the specifics. “Staffing is hard” is generic. “State licensing requires a separate director for every 60 children, so my staffing model was wrong from day one” is a finding you can model.

Question 12: How has the Wonder of Learning curriculum implementation gone — what did it cost and what did it change?

Why this matters: Curriculum transitions change training requirements, material costs, classroom layouts, and parent expectations simultaneously. Franchisees who have lived through it can quantify the delta between the franchisor’s projections and the actual cost in time and money.

Question 13: What do parents complain about most?

Why this matters: Parent complaints are a leading indicator of enrollment risk. A school where the top complaint is parking lot congestion at pickup has a different risk profile than one where the top complaint is teacher turnover in the toddler room. The pattern across multiple schools tells you where the system’s operational vulnerabilities live.

Question 14: How many hours per week do you spend at the school?

Why this matters: A franchisee working 60 hours a week is subsidizing the P&L with uncompensated labor — that “profit” includes a salary that would otherwise be an expense. A franchisee working 15 hours with a strong director has a genuinely semi-absentee model. Both are valid, but they are different businesses with different economics.

The franchise agreement governs a 15-year relationship with termination penalties on both sides. These questions surface the quality of that relationship in practice, not just on paper.

Question 15: Has the franchisor changed any fees, required vendors, or system standards since you signed?

Why this matters: The franchise agreement reserves the franchisor’s right to modify standards and fees — per Item 17, this is standard. The question is how frequently and how materially the franchisor exercises it. A mandatory new technology platform every 18 months imposes costs absent from the original Item 7.

Question 16: How responsive is the franchisor when you have a problem?

Why this matters: Support quality is not disclosed in the FDD. A franchisor that responds within hours to health-and-safety issues but takes weeks on billing disputes has a profile a buyer should understand before signing.

Question 17: Are you a member of the GSFOA or any independent franchisee association, and why or why not?

Why this matters: The GSFOA’s complaint to NASAA raised specific allegations about disclosure practices. A franchisee’s willingness to discuss the association — and their reasons for joining or not — tells you about the system’s internal dynamics in ways no filing can.

Question 18: If Goddard were sold to a new owner tomorrow, would you be concerned?

Why this matters: Franchise systems change hands. A franchisee who says the current team is the reason they signed is telling you that the value proposition depends on specific people, not just the system. That is key-person risk at the franchisor level.

Question 19: What would you change about the franchise agreement?

Why this matters: The items franchisees would change — territory protection, transfer restrictions, non-compete scope, renewal terms — are the friction points. If multiple franchisees independently name the same clause, you have identified a structural tension that will shape your ownership.

Local market conditions determine where your school lands in the revenue distribution. These questions surface competitive dynamics, demand trends, and cost pressures specific to the markets where Goddard operates.

Question 20: How many competing childcare centers opened within 5 miles of you since you opened?

Why this matters: A Goddard school’s competitive position can change materially with a single new entrant. The rate of new openings in existing markets is a leading indicator of enrollment pressure and tuition pricing compression.

Question 21: Has your enrollment been affected by KinderCare closures in your area?

Why this matters: The KinderCare closures have disrupted childcare markets unevenly. In some areas, displaced families drove enrollment gains at premium centers. In others, closures coincided with oversupply from new builds and the net effect was neutral. The franchisee’s experience tells you which dynamic is playing out.

Question 22: What is happening to commercial rents in your area, and does it worry you?

Why this matters: Occupancy cost is the second-largest line item after labor. A franchisee expecting a 20% rent increase at renewal is facing margin compression that will not appear in system-wide data until after it happens. Rent trends are hyper-local.

Question 23: What does parent demand look like — waitlist, or working to fill spots?

Why this matters: A school with a six-month infant waitlist is in a structurally different position than one running enrollment campaigns for pre-K. The answer tells you whether enrollment growth is demand-driven or marketing-driven — two modes with very different sustainability.

Most franchise buyers focus entirely on entry and ignore exit. A 15-year franchise agreement is a long commitment, and the economics of selling or transferring a Goddard school are materially different from the economics of buying one.

Question 24: Have you thought about selling, and what do you think your school would be worth?

Why this matters: If an eight-year operator believes their school is worth 4x EBITDA but comparable transactions close at 2.5x, that disconnect affects your own exit planning. The transfer fee structure — a $50,000 transfer fee, a $37,500 training fee for the buyer, and franchisor approval rights — is a cost current franchisees can quantify from experience.

Question 25: Do you know anyone who has sold a Goddard school, and what was their experience?

Why this matters: A franchisee who knows someone who sold quickly is giving you evidence that a resale market exists. One who knows someone who tried for two years and walked away is giving you different evidence. Both are more valuable than any broker’s estimate.

Twenty-five questions across ten or more calls will produce a large volume of qualitative data. The value of that data depends on how you organize and interpret it.

Look for patterns, not stories. A single franchisee’s bad experience with insurance pricing might be an outlier driven by a specific claim history. Six franchisees reporting that premiums doubled after the first renewal is a systemic finding that belongs in your financial model as a cost escalation assumption.

Cross-reference against the FDD. For every quantitative answer you receive — actual rent, actual insurance premiums, actual enrollment at breakeven — compare it to the corresponding figure in the FDD or your pro forma. Where the answers diverge from the disclosure, you have found either an undisclosed cost or an outdated assumption. Both require adjustment.

Build a synthesis document. Before making your investment decision, compile the patterns into a single reference: where validation data confirmed your model, where it challenged it, and where it introduced risks you had not considered. Franchise financing specialists like Lendesca can help stress-test a financial model against validation call findings, but the synthesis itself is your responsibility — no one else has heard all the calls.

Watch for red flags in the process itself. The way franchisees respond to your calls is data:

• Franchisees who will not talk to you. Some decline for legitimate time reasons. A pattern of refusal — especially among operators the franchisor did not recommend — is a signal worth taking seriously.
• Scripted responses. If multiple franchisees use the same language to describe the same experience, they may have been coached. This does not mean their answers are false, but it means the information has been filtered.
• Nobody mentions a single challenge. Every business has challenges. A franchisee who describes nothing but upside is either exceptionally lucky, exceptionally guarded, or not telling you the whole story.
• Consistent avoidance of specific topics. If every call goes quiet when you ask about the GSFOA, that silence is an answer.

Reconcile the qualitative with the quantitative. Your FDD financial analysis gives you the system-level numbers. Validation calls give you the variance and the explanatory factors behind it. Neither source is complete alone. Together, they produce the closest approximation of your actual economics available before you sign.

The FDD is the floor of your due diligence. Validation calls are the walls and ceiling. Skip them, and you are making a seven-figure commitment on a floor plan without knowing the dimensions of the rooms.