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A BETTER BABYSITTER

A NEW CROP OF CHILD-CARE CENTERS OFFERS PARENTS AND LANDLORDS MORE-FLEXIBLE OPTIONS

By Joel Groover

When Christina Petrosky started P3 Party Place, the basic idea was to create a fun and safe spot where busy parents like herself could drop off their kids for a few hours and go do whatever they needed to do, guilt-free. The drop-in child-care company, which opened about three years ago at a shopping center in Pleasanton, Calif., now is poised for a national rollout.

If there was ever any doubt that such a concept would fly in affluent Pleasanton, where 42 percent of households have children, it vanished faster than the popcorn and pizza at one of P3‘s inaugural Friday night movie parties. With such amenities as a moonwalk, a karaoke stage, a PlayStation room and a rock-climbing wall, P3 Party Place proved as popular with kids as with their parents. “I was able to pay myself a paycheck by the end of the fourth month,” Petrosky said.

Last year franchisees opened P3 Party Place units in the Bay Area communities of Brentwood, Livermore, Roseville and Santa Rosa. The seventh P3 Party Place opened in San Ramon in May, and yet another Bay Area franchise is slated to open by the end of the year in Dublin. All are in retail centers. Meanwhile, Petrosky, who has fielded about 600 inquiries from would-be franchisees, plans to launch a master franchise corporation in September to spearhead that rollout. Even famed Las Vegas developer Steve Wynn has expressed an interest in bringing P3 Party Place to his resorts, says Petrosky.

Who knew baby-sitting could be such big business? To be sure, professional child-care centers already blanket the country. Los Angeles-based Wilson Marketing Group, which keeps detailed statistics on the child-care market, says the number of U.S. child-care centers now stands at 105,462. The federal government‘s Forum on Child and Family Statistics, meanwhile, says 61 percent of children age 6 and younger and not yet in kindergarten regularly received some form of nonparental childcare in 2005.

The industry has seen considerable growth elsewhere too, aided in some cases by direct government subsidies. In Australia, for example, the government‘s budget through 2011 includes A$3.5 billion ($2.9 billion) for a host of benefits, tax credits and other measures aimed at helping families pay for childcare.

And yet, established day-care chains have been slow to give today‘s parents the more flexible child-care options they crave, says Sherry Workman, executive director and CEO of the Austin, Texas-based National Association of Child Care Professionals. Most chains let parents drop off their children only during set hours on set days, Workman says. For a mother who works from home but suddenly needs to meet with an important client at a nearby Starbucks, chasing down a last-minute babysitter may be the only option.

And that helps explain the popularity of concepts like P3 Party Place, says Workman, who predicts that hourly childcare will take off. “Flexible childcare is the wave of the future,” she said. “The established child-care centers are going to have to get ready for it. If they don‘t, they‘re going to die.”

Indeed, such concepts have already taken root in a number of cities, nearly always signing shopping center leases in the process. Houston-based Adventure Kids Playcare, which has an active franchise program, now has units not only in Dallas but also in the Texan cities of Flower Mound, Plano and Southlake. In metro St. Louis, KidsPlay operates three drop-in child-care centers. And in Maui, Hawaii, parents can drop off the kids at Maui PlayCare, located in the Macy‘s wing at the Queen Ka‘ahumanu Center regional mall.

Debbie Milner Gorenberg opened her first KidsPark in 1988 in San Jose, Calif., across from what is now Westfield Shoppingtown Oakridge. She moved to a franchise system in 2003. Today there are eight KidsPark centers, with nine more in the works. Most KidsPark units are in California, but new franchises are set to open in Arlington, Texas; Jacksonville, Fla.; and North Phoenix. Thousands of people have inquired about opening franchises, Gorenberg says. “Hourly childcare is more accepted now than it was 20 years ago,” she said. “Now just about everyone uses childcare in some form, whereas back in the 1980s it was still kind of new.”

Moreover, societal shifts favor flexible childcare. Today‘s highly mobile families, for example, are less likely to know their neighbors or live near a network of trusted friends and family members, says Gorenberg. That translates directly into fewer potential babysitters. And even when grandparents do happen to live nearby, they may be far more healthy and active than past generations. These seniors, in other words, may be more likely to go trekking in Tibet or roaring on their Harley-Davidson motorcycles than to spend a lot of time baby-sitting the grandkids.

“This is not just for moms going out to lunch and getting their nails done,” said Gorenberg. “This is truly addressing a need in the community. We have parents who are going to school part time, work part time, have medical appointments. You need a support system, and the support system that was in place doesn‘t exist anymore, because people have relocated.”

Both KidsPark and P3 Party Place strive to create a reassuring atmosphere for parents by emphasizing the use of FBI background checks for staff, open floor plans, electronic doors, surveillance cameras and the like. They also focus on making sure kids enjoy the experience. KidsPark‘s featured activities, for example, include cooking, arts and crafts, sensory exploration and hands-on science. P3 Party Place throws Friday and Saturday night parties, complete with movies, popcorn and pizza. “If parents know their kids are having fun, then they can relax and enjoy themselves, instead of feeling that the kids are at home with a babysitter,” Petrosky said.

Neighborhood shopping centers tend to be a good fit for drop-in child-care centers because of their proximity to residential areas, medical offices, restaurants and convenience-oriented retail. Convenience for parents is key, says Gorenberg. Her KidsPark centers run from about 3,500 square feet to 4,000 square feet. Each draws from a regular roster of 2,500 to 5,000 children. Franchisees set the hourly cost. In San Jose it is $7.50 for one child and $11.50 for two.

P3 Party Place occupies storefronts measuring about 2,300 square feet, ideally in communities where at least 17 percent of the households have children (the national average) and where the median annual income is $100,000 or more. Families with children between 2 and 12 years old pay $8 an hour for one child, $14 for two and $18 for three.

Before signing drop-in child-care tenants, shopping center owners should understand that these businesses operate under myriad constraints, says Workman. States regulate and inspect child-care providers, which often must comply with zoning requirements designed to protect children. A liquor or pornographic video store located too close to the child-care center could constitute a violation.

Early in the negotiating process, owners would do well to make sure that child-care operators have been cleared and licensed by the state, says Workman. They should also pay careful attention to the physical integrity of any shopping center spaces used for childcare. Clearly, liability is a concern. “If a screen is broken and needs to be fixed, you‘ve got to fix it immediately,” Workman said.

These tenants often want their own temporary parking so that parents are not forced to walk through busy parking lots with their kids in tow. The most important constraints, though, have to do with space. Every state will limit how many children can occupy a child-care center at one time. “Normally, it is an amount per square foot, per child,” Workman said. “The minimum should be somewhere around 35 square feet per child. This would be in spaces used by the children for activities.” Many states also require child-care centers to offer outdoor spaces divided into separate play areas for toddlers and older children. Both parents and state inspectors will expect these areas to be safe and secure, Workman says.

Such rules, in effect, cap the amount of money that drop-in child-care tenants can make. For Workman, though, they do not constitute a deal breaker. Time-pressed parents will come to the shopping center twice each time they use the service: once to drop off their children and then to pick them up again. They would have every reason to buy groceries, drop off their dry cleaning, pick up a gift or eat a meal during those trips, Workman reasons. “If I were to start a child-care center again, I would put around it all the things that parents need,” she said. “This would also be a selling point for the child-care center itself. They could say, ‘Look how convenient our program is.’ ”

As shopping center landlords would say, convenience is key — and perhaps even a kid could understand that.