From the September 1999 issue of Entrepreneur

Everywhere you turn these days, there's something about Generation Y. You've read enough studies about this new wave of kid consumers to know they're the hot new market, and you're excited because you think you have a good grasp of what they want.

But do you? The one thing you must understand about the boomers' children's market: This group, the "echo boom," is growing up in very different times and, consequently, has very different needs. It's not enough to hand them a Barbie and a box of Legos, or sit them in front of a guy in a dinosaur suit. Kids today are more sophisticated than that. They'd rather surf the Net or chat online, play the newest Nintendo 64 game, or see the latest sci-fi action flick. "There's a lot going on in our society that's really driving [the market]," says Peter Sillsbee, senior project director of the Roper Youth Report at Roper Starch Worldwide. "Kids today are growing up in single-parent homes or homes where both parents are working. The percentages for both have actually doubled over the past 25 years."

As a result, kids now have more influence over family purchases. With their own hectic schedules to juggle, parents rely on kids to be part of the decision-making process. With so much access to information right at their fingertips, today's typical kids are also a lot more knowledgeable about the products on the market, from clothes to technology.

Fortunately for franchising, the echo boom is creating endless opportunities. After all, the steadily increasing birth rate heightens the need and demand for services and products that cater to this new group of consumers.

One thing franchises have discovered is that kids expect the same things from products and services as adults--but on their own level. In response, children's franchises are changing and creating programs to accommodate this new group by combining fun, technology and learning so children feel they have something all their own.

Kid-related franchises deserve an "A" for adapting to customers' needs. During the past several years, computer training centers have appeared, while many other learning centers are incorporating computers into their curricula to keep up with these tech-savvy tykes. Fitness programs are constantly creating new routines to keep up with industry trends and children's needs. The Gymboree Play Program has strengthened its brand by revamping its image with strong marketing and new programs and equipment. Here, the Gymboree Play Program and a few other "booming" businesses show how they're catering to the children and parents of the 21st century.

Hit The Books

According to the 1998 Roper Youth Report, 84 percent of children ages 8 to 12 agree it's cool to be smart. Forget Beavis and Butthead--kids today are realizing it pays to be the next Bill Gates.

Little Scientists is a learning program based in Ansonia, Connecticut, that takes a hands-on approach to teaching science to children. Such a combination of kids and science is a dream come true for John Sullivan, a Little Scientists franchisee in Wethersfield, Connecticut.

After years of being frustrated with his job at a nuclear utility company, Sullivan, 48, evaluated other career options and decided a franchise concept that incorporated his love for both science and children was the way to go. "I've seen and heard things from parents and program administrators that confirm this concept is excellent," says Sullivan, who opened his franchise in August 1998.

Even on his worst day, Sullivan says he still hasn't longed for his nuclear utility days. "After seeing what this program can do, I believe there's a strong demand," says Sullivan. "Every kid is naturally curious. Science opens the door for learning in general because kids can relate it to other things they're learning about. It also enhances overall creativity and imagination. Video games are great, but they don't leave much to the imagination."

Bare Necessities

Most families work within a budget--some tighter than others--and welcome any opportunity to save a dollar. Ask any parent: The costs of basic necessities add up. Once Upon A Child, a children's resale system with more than 200 stores in North America, helps families find what they need at reasonable costs by buying and selling new and "gently used" children's apparel, toys, equipment and furniture.

With two kids already and a third on the way, Once Upon A Child franchisees Maury and Kim Purnell, both 31, know how important value is to parents. "Part of what attracted me to this concept is that it's a good idea that works," says Purnell. "There are large margins compared to most retail stores and not much competition."

Maury left his career in finance to take a chance on starting his own business. After researching the various opportunities available, Purnell came across an article about Once Upon A Child and decided to contact its parent company, Minneapolis-based Grow Biz International. After just one visit, he was sold on the idea--the couple opened their first store in 1996 in Plano, Texas. They're projecting $1 million in sales for 1999 for that store and have a second unit opening this fall.

Play Time

Baby boomers, who realize maintaining a healthy lifestyle is important, are passing this value on to their children. And while health is a serious issue, it's also about fun and games at Gymboree Play Programs.

Burlingame, California-based Gymboree Play provides a series of programs for both parents and children devoted to the physical, emotional and social development of children. The more than 409 franchised Gymboree Play Program sites in 10 countries share a common mission: to help maximize childhood development during the critical years from birth to age 4.

Don and Adrian Becker opened their first Gymboree Play franchise in March 1982. When they purchased the franchise, the young couple knew it was the perfect business for them: They both had strong educational experience and Don also had a solid musical background. That provided them with the necessary tools to teach children and parents through play and music.

"It's a joy to open my office door and see these children and know we're doing the right thing," says Adrian, 50. "We can't think of any other [business] we would have been happier in." With three Gymboree Play locations in California's San Fernando Valley, the Beckers project 1999 sales of $600,000.

The couple warns that the program isn't designed to be a baby-sitting service--parent participation is required. Of course, they realize parents can't always spend the time they'd like with their children, so the Beckers offer classes on weekends and evenings to accommodate parents' hectic schedules.

"Look at the world around us--it's frightening in many ways," says Don, 50. "As parents and children have less and less time together due to work schedules and other pressures of life, a program like Gymboree is the perfect beginning to restrengthen family ties."

Happy And Healthy

The children of today are definitely not the children of yesterday. The slacker mentality isn't what's "in." Kids are much more optimistic and entrepreneurial than in past generations, and they're ready to take on new challenges and experiences.

"These kids are turned on to information," says Sillsbee. "And there are great opportunities for businesses that make parents feel their kids are learning something, while appealing to what kids are interested in and giving them a sense that they're contributing [to society]."

Unlike in the aftermath of the baby boom, when births in the United States dropped to 3.1 million per year in the early 1970s, the current birth rate isn't projected to fall off, but remain stable at around 4 million per year. Long-range projections by the U.S. Census Bureau show a rising number of births, increasing to 4.2 million in 2010 and 4.6 million in 2020.

As parents continue to get busier, their time becomes more valuable. It becomes even more important to find products and activities that serve a useful purpose and allow boomer parents to spend quality time with their kids. Although times change and population numbers fluctuate, one thing remains constant: Parents just want what's best for their kids. And businesses of the 21st century are sure to play a more significant role than ever in helping parents achieve that goal.

Looking for more information on kid-focused franchises? Check out our comprehensive listing of opportunities at http://www.entrepreneurmag.com/franchise500/kidfran.html

Contact Sources

Gymboree Play, (800) 222-7758; Little Scientists, 178 Church St., Wethersfield, CT 06109

Once Upon A Child, (214) 692-3521, alicorinv@aol.com

Roper Starch Worldwide Inc., (212) 455-4958