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Celebree School

Celebree Enterprises, LLC
https://www.celebree.com
1-443-991-4791
8029 Corporate Drive, Nottingham, Maryland 21236
FDD Version:

How much does Celebree School cost?

Initial Investment Range

$100,000 to $7,379,500

Franchise Fee

$95,000 to $142,500

Celebree School franchises offer infant care, pre-school, before and after-school programs for school aged children, summer camps, back-up care and emergency care.

Enjoy our partial free risk analysis below

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Celebree School April 16, 2025 FDD Risk Analysis

Free FDD Library AI Analysis Date: August 19, 2025

DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.

1

Franchisor Stability Risks

Start Here
Total: 10
2
3
5

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

Celebree Enterprises, LLC's (Celebree LLC) audited financial statements show significant, recurring net losses ($2.27M in 2024, $2.18M in 2023) and a growing negative member's deficit (-$861k). Total liabilities exceed total assets. The company's operations appear dependent on large, ongoing capital contributions from its member. The FDD also explicitly lists “Financial Condition” as a special risk, signaling a high degree of financial instability that could impact its ability to support you.

Potential Mitigations

  • Your accountant must conduct a thorough analysis of the franchisor’s financial statements, including cash flow and dependency on new franchise sales.
  • Exploring the strength of any required financial assurances, like the surety bonds mentioned in state addenda, with your attorney is critical.
  • Developing a contingency plan with your business advisor for scenarios where franchisor support may be reduced is a prudent measure.
Citations: Item 21, FDD Exhibit D

High Franchisee Turnover

High Risk

Explanation

While Item 20 Table 3 reports zero terminations or cessations, Exhibit I reveals a contradictory and concerning fact: seven franchised outlets were terminated in 2024 before they ever opened. This indicates a very high rate of pre-opening failure. This discrepancy raises questions about the transparency of the FDD data and suggests potential systemic issues in the site selection, financing, or development support process that could significantly affect your ability to successfully open your school.

Potential Mitigations

  • A discussion with your attorney is necessary to understand the discrepancy between Item 20 and Exhibit I and its implications.
  • Contacting franchisees who failed to open (listed in Exhibit I) is crucial to understand the specific challenges they faced.
  • Your business advisor should help you create an exceptionally conservative pre-opening budget and timeline to account for potential difficulties.
Citations: Item 20, FDD Exhibit I

Rapid System Growth

Medium Risk

Explanation

The number of franchised outlets has more than doubled in the last two years, from 13 to 29. While growth can be positive, such rapid expansion, especially when coupled with the franchisor's disclosed financial weakness, presents a risk. The franchisor’s financial and human resources could be stretched thin, potentially compromising the quality and availability of the training, site selection, and ongoing operational support that you will need to succeed.

Potential Mitigations

  • It is important to discuss the franchisor's capacity to support this growth with both their team and existing franchisees.
  • A review of the franchisor's staffing and support infrastructure with your business advisor can help assess if it is keeping pace with unit growth.
  • Your accountant should evaluate if the franchisor's financials support a sustainable growth model rather than one reliant on initial fees.
Citations: Item 20, Item 21

New/Unproven Franchise System

Medium Risk

Explanation

The franchisor began offering franchises in 2018. While not a complete startup, as it has an affiliate with a longer history of operating company-owned schools, the franchise system itself is still relatively young. A younger system may have less-developed support structures, evolving operational standards, and lower brand recognition compared to more established competitors. This can place a greater burden on you to establish the brand in your local market.

Potential Mitigations

  • Speaking with some of the earliest franchisees listed in Item 20 about the evolution of the system and its support is highly recommended.
  • Engage a business advisor to evaluate the strength of the brand recognition in your specific market.
  • Your attorney should help you assess whether the contractual obligations reflect a mature system or offer flexibility for a developing one.
Citations: Item 1, Item 20

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD Package. The franchise operates in the early childhood education and care industry, which is a well-established sector with consistent long-term demand. It is not considered a fad business that relies on a temporary trend for its appeal. However, you should still evaluate the specific market and competitive landscape in your area to ensure long-term viability.

Potential Mitigations

  • Engaging a business advisor to research the long-term demand and competitive landscape for childcare services in your specific market is prudent.
  • An attorney can review the contract terms to ensure they are appropriate for a long-term business commitment.
  • An accountant can help you model financial performance based on sustained, not trend-based, demand.
Citations: Item 1

Inexperienced Management

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 2 indicates that the key executives of Celebree LLC have extensive and long-term experience in the childcare and education industry, often for many years or decades. This suggests the management team has significant operational expertise relevant to the business you will be operating, which is a positive factor for franchisor stability and the quality of support you may receive.

Potential Mitigations

  • It is still advisable to interview key management during your due diligence to assess their vision and strategy for the franchise system.
  • Talking to current franchisees about their direct experiences with the management team's competence and accessibility is a valuable step.
  • A business advisor can help you frame questions to gauge how management's experience translates into effective franchisee support.
Citations: Item 2

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD Package. There is no disclosure in Item 1 or Item 2 indicating that the franchisor is owned or controlled by a private equity firm. The management structure appears to be led by the company's founders and long-term executives rather than external financial investors. This may suggest a focus on the long-term health of the brand over short-term financial returns.

Potential Mitigations

  • Your attorney can help you confirm the ownership structure of the franchisor and its affiliates during due diligence.
  • A business advisor can assist in researching the background of the principal owners to understand their history and focus.
  • It is still important to ask existing franchisees about any major changes in ownership or strategic direction.
Citations: Item 1, Item 2

Non-Disclosure of Parent Company

Medium Risk

Explanation

The franchisor's structure is complex, involving multiple affiliates like HWG IP, LLC, which owns the trademarks, and Celebree Property Investments, LLC, which may lease property to you. Your agreement is with Celebree Enterprises, LLC, which has weak financials and licenses the brand from an affiliate. The FDD does not include financial statements for these other critical parent or affiliate entities, which could obscure a complete picture of the overall organization's financial health and stability.

Potential Mitigations

  • Your attorney and accountant must review the roles and interplay of all affiliated entities and the risks this structure poses.
  • It is important to ask the franchisor for financial information on the key affiliate that owns the intellectual property.
  • A business advisor can help you understand the operational implications of dealing with multiple related entities for branding, real estate, and support.
Citations: Item 1, Item 13, Item 21, FDD Exhibit D

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 1 of the disclosure document does not list any predecessors for Celebree Enterprises, LLC. This indicates that the franchisor did not acquire the assets of another company to start this franchise system and is operating under its original corporate identity. Therefore, there are no predecessor-related historical issues such as past litigation, bankruptcy, or franchisee turnover to evaluate.

Potential Mitigations

  • Your attorney should still confirm the corporate history during due diligence to ensure no predecessor entities were omitted.
  • Asking long-term employees or early franchisees about the company's history can provide additional context.
  • A business advisor can help investigate the brand's origin and market history.
Citations: Item 1

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 3 states, 'No litigation is required to be disclosed in this Item.' This is a significant positive factor, as it indicates a lack of recent, material legal disputes with franchisees, suppliers, or government agencies regarding issues like fraud, misrepresentation, or breach of contract. This suggests a potentially healthier franchisor-franchisee relationship compared to systems with a pattern of litigation.

Potential Mitigations

  • Your attorney should still conduct an independent search for litigation as part of a comprehensive due diligence process.
  • Asking current and former franchisees about their experiences with disputes, even if they didn't result in litigation, is a prudent step.
  • It is wise to have a business advisor help you assess the overall health of franchisee relations despite the clean litigation record.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
7
1
7

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

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3

Financial & Fee Risks

Total: 10
6
4
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

4

Legal & Contract Risks

Total: 16
8
4
4

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

5

Territory & Competition Risks

Total: 5
3
2
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

6

Regulatory & Compliance Risks

Total: 10
4
4
2

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

7

Franchisor Support Risks

Total: 4
1
3
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

8

Operational Control Risks

Total: 12
5
4
3

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

9

Term & Exit Risks

Total: 18
10
4
4

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

10

Miscellaneous Risks

Total: 2
2
0
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.