The 344-Franchisee Phone List: How to Run Validation Calls That Actually Reveal What the FDD Won’t Tell You
Kiddie Academy’s FDD lists contact information for every current and former franchisee. With 344 locations as of December 2024 and 363 by December 2025, you have hundreds of people you can call who already know what this investment actually looks like. Almost nobody calls more than five.
You have read the FDD. You have studied Item 19. And now someone — your broker, your attorney, your spouse — has told you to “call some existing franchisees.”
Calling three owners and asking “are you happy?” is not validation. It is confirmation bias dressed as due diligence. Real validation is structured and designed to surface the specific risks a disclosure document cannot capture — because the FDD reports averages, and you are not buying an average.
The FTC Franchise Rule requires every franchisor to disclose in Item 20 the contact information for every current franchisee, plus those who left the system in the prior fiscal year. Kiddie Academy complies. The list is in the FDD. The question is whether you use it.
Why Item 20 Is the Most Underused Page in the FDD
Item 19 gets the attention. It has numbers: $2,193,070 average gross revenue for mature academies, $559,914 average gross profit. Those figures are real. They are also blended averages that mix multi-unit and single-unit operators across every geography and tenure bracket in the system.
Item 20 is where you unblend them.
The list gives you direct access to people operating this business today. They know what they actually earned last year. They know what their staffing costs look like at 6 a.m. on a Tuesday. They know whether corporate returns calls. They know what happens when enrollment dips in July.
None of that is in the FDD. All of it is available to you — if you ask the right questions, to the right people, in the right sequence.
The Three Segments: Who to Call and Why
Not every franchisee on the Item 20 list is equally useful to you. Your calls should target three distinct segments, in this order.
Segment 1: Single-unit operators in markets similar to yours
This is your primary validation pool. Kiddie Academy’s system is 54% multi-unit — more than half the locations are operated by owners running two or more academies. They amortise overhead across locations, negotiate group rates, and have operational leverage you will not have in year one.
When you call a five-unit operator and she tells you her numbers, those numbers reflect a business structure you will not have. Weight accordingly.
How to identify single-unit operators from the Item 20 list:
- Look for names that appear exactly once on the franchisee list
- Cross-reference with FranchiseChatter’s Kiddie Academy review for unit count context
- During your first call, ask: “How many locations do you operate?” If the answer is more than one, note it and continue — but weight the data differently
Target: 8 to 12 single-unit operators in metro areas with demographics comparable to your target market. Not just the same state — the same population density, household income range, and competitive childcare landscape.
Segment 2: Multi-unit operators
Call 3 to 5 multi-unit operators after completing your single-unit calls. They are not your comparable — they are your context.
- How did economics change between unit one and unit two?
- Does the franchisor treat single-unit owners differently from portfolio operators?
- Would they do it again as a single-unit buyer?
Ask that last question directly. The hesitation before the answer is data.
Segment 3: Former franchisees
Kiddie Academy had 4 closures in 2024. That is a low number relative to a 344-unit system. It is also 4 people who can tell you exactly what went wrong.
Former franchisees are the most valuable calls you will make. They have no incentive to protect the brand and no ongoing relationship with the franchisor. They will tell you things current franchisees will not.
What to listen for from former franchisees:
- Was the closure financial, personal, or both?
- Did they approach the franchisor for help before closing? What was the response?
- Did the territory economics match what they were told during Discovery Day?
- Would they have made a different decision with better information?
Call all 4. It is 4 phone calls. There is no excuse for skipping them.
The 20 Questions: What to Ask and Why Each One Matters
Generic lists like Rush on Business’s franchisee questions are a starting point. The questions below go further — each one targets a specific data point that Kiddie Academy’s FDD either omits, averages, or presents without context.
Financial reality
- “What was your gross revenue last year, and how does that compare to your first full year?” — The FDD reports $2,193,070 for mature academies and $1,618,629 for ramping ones. The ramp gap between those figures is $574,441. You need to know how long it took real operators to close it.
- “What is your actual owner take-home after all expenses, debt service, and your own salary?” — The FDD discloses gross profit, not net. The $559,914 average gross profit does not account for debt service on your buildout loan, your own compensation, or the dozen below-the-line expenses that reduce gross profit to actual cash in your pocket.
- “What were your total startup costs, and how did they compare to the FDD’s Item 7 estimates?” — Item 7 gives a range. The range is wide. The question is where real operators landed within it — and whether anyone landed above it.
- “What percentage of your revenue goes to staffing?” — Childcare is a labour business. Staffing typically consumes 50% to 60% of revenue. If the number you hear is consistently above 55%, your gross profit margin compresses and the Item 19 averages may not apply to current market conditions.
- “What does your monthly rent or mortgage payment look like relative to revenue?” — Occupancy costs vary wildly by market. A franchisee in suburban Maryland pays a different number than one in suburban Phoenix. The FDD does not segment this.
- “How long did it take you to reach cash-flow breakeven?” — Not profitability. Not ROI. Cash-flow breakeven — the month where inflows exceeded outflows for the first time. This is the number your personal savings account cares about.
Operations and support
- “When you call the corporate office with a problem, what happens?” — Kiddie Academy is family-owned (Miller family, Essential Brands), headquartered in Abingdon, Maryland. Family-owned franchisors can be exceptionally responsive or exceptionally insular. Ask the people who call them.
- “Describe your experience at Discovery Day/Orientation Day in Abingdon.” — This reveals whether the event is a sales pitch or a genuine operational briefing. Vague enthusiasm is a yellow flag.
- “What does a typical day look like for you as the owner?” — This separates operators on-site at 6:30 a.m. from those with a centre director running the show. You need to know which model your market and capital structure require.
- “What is the hardest operational problem you have solved in the last 12 months?” — Staffing shortages, licensing inspections, parent complaints, supply chain problems. The answer tells you what daily reality looks like.
- “How does the 9% fee load — 7% royalty plus 2% Brand Building Fund — affect your monthly cash flow?” — Some franchisees absorb it without stress. Others feel it acutely during ramp. The FDD’s fee structure is one thing. The felt impact on a monthly P&L is another.
Territory and competition
- “Has another Kiddie Academy opened near you since you signed? What was the impact on your enrollment?” — Kiddie Academy’s territory protection is conditional on population. In markets above 125,000 residents within a one-mile radius, there is no exclusive territory. Ask operators in dense suburbs whether encroachment has been an issue — or whether they worry it will be.
- “What is your competitive landscape? Who are you actually competing against for enrollment?” — The answer may not be other franchises. It may be a church-run programme, a Montessori school, or a state-funded pre-K that charges nothing. Local competitive dynamics are invisible in the FDD.
- “How far do your enrolled families typically drive to reach your location?” — This tells you the real catchment radius, which may be smaller or larger than the contractual territory.
Growth and trajectory
- “If you were buying today at the current franchise fee range of $70,000 to $150,000, would you still do this deal?” — 62 new franchise agreements were signed in 2024, with 24 going to multi-unit operators. The people who already own units are still buying. The question is whether they would start from zero.
- “What would you do differently if you were starting over?” — This is an open-ended question, but it belongs at the end of a structured call, not at the beginning. By this point the franchisee has been talking specifics for 20 minutes. The “do over” question tends to surface the single biggest insight they have.
- “Have you considered selling? If so, what did you learn about resale values?” — The secondary market for childcare franchises is opaque. This question reveals whether exit economics are real or theoretical.
- “What surprised you most — positively or negatively — in your first two years?” — The gap between expectation and reality is where the risk lives.
The franchisor relationship
- “How would you describe the relationship between the franchisee community and corporate leadership?” — Listen for “collaborative,” “supportive,” “they listen.” Also listen for “top-down,” “they don’t ask,” “it’s their way.” Neither is inherently disqualifying. But you should know which culture you are joining.
- “Is there anything I should have asked you that I didn’t?” — This question has generated more valuable information across more franchise systems than any other single prompt. People want to tell you. Give them the opening.
The Call Protocol: Structure, Timing, and Documentation
Unstructured calls produce anecdotes. Structured calls produce data. Here is how to run the process.
Step 1: Build your call list (1 day)
Pull the Item 20 list from the FDD. Separate it into the three segments described above. Identify 15 to 20 targets for your primary segment (single-unit operators in comparable markets), 3 to 5 for multi-unit, and all former franchisees.
Step 2: Send a brief introductory text or email (Day 2)
Most franchisees screen calls from unknown numbers. A short message helps: “I’m evaluating a Kiddie Academy franchise in [your market]. I found your contact information in the FDD. Would you have 15 to 20 minutes this week to share your experience?”
Franchisees were once in your position. Most remember what it felt like.
Step 3: Conduct calls in order (Days 3–10)
Start with single-unit operators. Their answers calibrate your expectations. Then call multi-unit. Then former franchisees. Do not call former franchisees first — you need the baseline from current operators to know what questions to push on.
During each call:
- State up front that you will take notes and that you are speaking with multiple operators
- Work through the 20 questions in order, but follow the conversation where it goes
- Record the call duration and the franchisee’s tenure in the system
- Note specific numbers: revenue, costs, timeline to breakeven, enrollment figures
- Mark anything that contradicts the FDD or the broker’s representations
Step 4: Log everything in a spreadsheet (Ongoing)
Create a simple tracking sheet with columns for:
- Franchisee name and location
- Unit count (single or multi)
- Years in system
- Revenue range shared
- Key concerns raised
- Contradictions with FDD data
- Overall sentiment (1–5 scale)
This is not bureaucracy. It is the document your lender may ask to see. SBA 7(a) loan underwriters increasingly expect evidence that the borrower conducted substantive franchise validation, not just a few casual conversations.
Step 5: Synthesise and pressure-test (Days 11–12)
After completing your calls, look for patterns:
- Consistency. If 8 of 10 operators report revenue within 10% of each other, you have a reliable signal. If the range is $800,000 to $2,400,000, the averages are hiding a distribution problem.
- Recurring complaints. One franchisee complaining about staffing is venting. Six is a structural issue.
- The silence. What did nobody mention? If no one discussed territory competition, either it is not a problem or no one has experienced it yet.
Capital advisors like Lendesca can model the debt service against the actual revenue figures you hear from franchisees, rather than the FDD’s blended averages. This is where the validation spreadsheet becomes a financial planning input, not just a due diligence artefact.
What Validation Calls Cannot Tell You
Be honest about the limits of this process.
Franchisees who are struggling may not pick up the phone. Franchisees who are thriving may not have time. The sample you reach is self-selected. It skews toward people who are either comfortable enough to talk or frustrated enough to want to.
Some franchisees will be guarded — the franchise agreement may include confidentiality provisions. Respect that. The qualitative information — how it feels to operate, what the corporate relationship is like, whether they would do it again — is often more valuable than a precise revenue figure you cannot independently verify.
The Decision After the Calls
Validation calls do not make the decision for you. They give you the inputs to make it intelligently.
If single-unit operators in markets like yours consistently report revenue below the FDD’s mature average — and the ramp gap analysis suggests 18 to 24 months before you reach those figures — your pro forma needs to reflect that reality, not Item 19’s blended number.
If former franchisees tell you their closures were driven by a specific factor — a bad lease, a staffing crisis, a competitive incursion — you can evaluate whether it applies to your situation. If they tell you the economics simply did not work, that is a different signal entirely.
If every operator says they would do it again, that is meaningful. If half of them hesitate, that is meaningful too. Neither is a verdict. Both are evidence.
The franchise fee is $70,000 to $150,000. The total investment is multiples of that. Twenty hours of phone calls is the cheapest due diligence you will ever do on a decision this large. The list is in the FDD. Use it.