Outlet review - October 2026
PlayFACTO School @ Kovan:
two and a half years in
What the numbers show, what we are up against, and how we plan to make Kovan work for the long term.
Prepared for Justin, PlayFACTO HQ - by PlayFacto @ Kovan Pte Ltd - Confidential
The short version
Kovan has not broken even yet, 31 months after opening
$422k
to set up: franchise fee, renovation, aircon and fit-out, pre-opening costs
-$385k
operating losses from February 2024 to September 2026
-$5.0k
a month still, at today's 42 student-care children (June-September 2026)
The founders have lent the company $761k to keep it running. Losses are narrowing every year, but slower than the plan, for two reasons: enrolment and rent.
Kovan outlet only, excluding GST. Source: PFS Kovan accounts 2024-2026 and fee reports.
Plan versus reality
What we expected when we signed, and what happened
| The plan | What happened | |
|---|---|---|
| Break-even | After the first year | Not yet, 31 months in |
| Enrolment | 60-70 children (about 75% of capacity) | Peak of 53 in January 2026; 42 today |
| Year 1 average | Ramp up towards break-even | 18 children, losing $16.6k a month |
| Rent | Covered once enrolment filled | $18.8k a month, still 45% of fees in year 3 |
| Renewal from Feb 2027 | - | $19.9k, then $20.7k a month |
Capacity: 96 children. Rent shown excluding GST; the renewal figures include the tenant's contribution.
Enrolment
Each January lifts us; the rest of the year we lose children
9
18
39
25
53
42
2024 (from April)
2025
2026 (to September)
Student-care children billed each month (red = January intake). 2025 lost 14 children between January and December; 2026 has lost 11 since January.
Year by year
Each year is better, but the gap is closing slowly
| Per month, on average | Year 1 Apr 24 - Mar 25 | Year 2 Apr 25 - Mar 26 | Year 3 so far Apr - Sep 26 |
|---|---|---|---|
| Student-care children | 18 | 36 | 42 |
| Fees and other revenue | $20.6k | $35.5k | $42.0k |
| Running costs | $37.2k | $45.2k | $48.8k |
| Profit / loss | -$16.6k | -$9.7k | -$6.9k |
| Rent as a share of revenue | 91% | 53% | 45% |
Excluding GST and one-off set-up costs. Revenue by the month the fee is for; refundable deposits excluded. Running costs include royalties, staff, rent, food, transport and enrichment trainers.
The fixed cost that does not shrink
Rent takes 45 cents of every fee dollar
Rent $18.8k (45%)
Everything else must come out of $23.2k
Monthly revenue of about $42k (year 3 so far), excluding GST
$18.8k
rent today, whether we have 25 or 53 children
$19.9k-$20.7k
rent from February 2027 under the renewal offered
$582k
rent paid since opening, more than the set-up cost
Rent at 780 Upper Serangoon Road, excluding GST. $18,776 a month from March 2024 to September 2026.
Break-even
At Kovan's rent we need about 50 children just to break even
Rent today
50
children to break even at $18.8k rent
Renewal rent, 2027
52
children to break even at $19.9k rent
At $4.00-4.50 psf
38-39
children to break even in a 2,300 sq ft unit
We have averaged 36 children in year 2 and 42 in year 3. Each extra child adds about $690 a month after royalties and food, so the rent level decides whether an average year makes or loses money.
Based on Jun-Sep 2026 costs: core team $16.7k, other fixed costs $6.4k, revenue about $825 per child, royalties 9.3% of revenue. One more teacher per 9 children above 54.
Break-even after year 1
To break even after year 1 we needed about 50 children. We have never held that.
50
39
48
42
Needed to break even
End of year 1
(March 2025)
End of year 2
(March 2026)
Today
(September 2026)
Break-even worked out from Kovan's actual 2025-26 costs: about $690 per child after royalties and food, against about $42k of monthly fixed costs (team $16.7k, other $6.4k, rent $18.8k), less about $7.8k of enrichment and other income.
Is this normal?
Kovan is well outside the usual range for a franchise outlet
Monthly break-even
Commonly quoted: 12-24 months, up to 36 for costly education outlets. Kovan: not yet at month 31.
Repaying the investment
Guidance for owner-operators: 1.5-4 years. Kovan: 2033 at best, about 9 years.
Rent and premises
Care-centre benchmarks: 15-25% of revenue. Kovan: 45% on rent alone.
We signed the agreement knowing its terms, and we stand by them. What we did not expect is how long Kovan takes to break even and repay its investment. That is more than one franchisee can carry alone, which is why we are asking HQ for help.
Sources: franchise payback guidance (VettedBiz); childcare budget benchmarks (Brightwheel, HonestBuck - US). Ranges are indicative; no Singapore body publishes a benchmark.
The market
Fewer children, more centres, cheaper subsidised places
-7.1%
Primary 1 enrolment nationally, 40,218 in 2021 to 37,377 in 2025 (MOE)
About 40 within 3 km
student-care centres around us: 17 in primary schools, 17 community, about 6 private
$290
median monthly fee at registered centres, unchanged for five years (MSF, July 2026). Our fee is about $700.
$6,500
new household income ceiling for student-care subsidies from Jan 2027, covering about 13,000 more children. As a private centre, we cannot offer these.
Sources: MOE P1 enrolment (data.gov.sg); MSF parliamentary reply, 7 July 2026; MSF registered centre lists; SCFA changes reported by AsiaOne. Distances from 780 Upper Serangoon Road.
PlayFACTO around Kovan
Since we signed in 2023, the network grew from about 43 to 72 outlets
| PlayFACTO outlet opened after us | Distance from Kovan | Opening |
|---|---|---|
| Hougang Heights | 1.4 km | October 2026 (opening now) |
| Woodleigh (Bidadari) | 1.8 km | November 2025 |
| Potong Pasir | 3.0 km | Late 2024 |
| Ubi | 3.4 km | Late 2024 |
| Compassvale Walk | 4.5 km | Mid 2026 |
| Compassvale (Sengkang CC) | 4.6 km | About mid 2024 |
6 other PlayFACTO outlets now within 3 km, 20 within 5 km.
Serangoon Central (1.0 km) opened 5 months before us.
Opening dates from archived copies of playfactoschool.com.sg outlet lists (2023-2026) and company registrations; months are approximate. Network: 29 open in Feb 2023, 43 in Nov 2023, 72 in Oct 2026.
Why enrolment has lagged
No single cause: several pressures add up
Price and spending power
At about $700 we compete with $290 school and subsidised places, and subsidies widen in 2027.
Location
About 0.8 km from both Kovan and Serangoon MRT, chosen with HQ's review, at a high rent.
More choice nearby
About 40 other centres within 3 km plus 6 PlayFACTO outlets, for a shrinking group of P1 children.
Children leaving each year
3-4% of children leave every month, about a third over a year, so each January intake mostly replaces leavers.
How we projected
The projections use our own track record, not hopes
| What actually happened | What we assume | |
|---|---|---|
| New children each January | +27 in 2025, +28 in 2026 | +28 a year (recent trend) |
| Children leaving | 4.0% a month in 2025, 2.9% in 2026 | 3.4% a month |
| 2027 intake so far | 20 P1 deposits paid by early October | Fits the trend |
| Fees and costs | About $825 per child; costs as in Jun-Sep 2026 | Fees and wages +3% a year |
| Staffing | 6 full-time staff for 42 children | One more per 9 children above 54 |
Reaching 90 children would mean filling 94% of capacity and finding about 31 new children every year to replace leavers. Our best month so far is 53 (55%).
Children counted from monthly student-care fee lines in the HQ fee reports. Rent at the renewal rate from February 2027; franchise renewal costs at the end of November 2028.
Recent-trend case: 28 new children each January (as in 2025 and 2026) and 3.4% of children leaving each month. Staffing at one full-time teacher per 9 children.
2027 outlook
A record P1 intake, and still only break-even at the renewal rent
20
P1 (2027) children with deposits paid, against 6 at this point last year
58-66
children expected in January 2027, with one extra teacher hired
-$0.2k
a month on average in 2027 if we stay at the renewal rent: about break-even
7 of the 20 new P1 families already attend our Creative Math or Coding classes. But about a third of children leave each year, so we expect about 45 children by December 2027, and the higher rent uses up most of the extra fees.
Four futures at 780 Upper Serangoon Road
Only a near-full centre makes real money at this rent
| Profit per month | 2027 | 2028 | 2029 | $806k repaid |
|---|---|---|---|---|
| Confirmed sign-ups only +20 each January | -$2.8k | -$3.1k | -$2.4k | Never |
| Recent trend +28 each January | -$0.2k | +$1.4k | +$2.9k | After 2036 |
| Steady 70 from 2028 | -$0.1k | +$6.6k | +$7.5k | After 2036 |
| Ideal: 90 children from 2028 | +$0.6k | +$14.0k | +$15.1k | January 2033 |
Kovan only, excluding GST. $806k = $422k set-up plus $385k operating losses to September 2026. Includes about $104k of franchise renewal costs at the end of November 2028.
Return on investment
Even the ideal case repays us only in 2033
Actual
Recent trend
Confirmed sign-ups only
Steady 70
Ideal 90
+$0.8M
$0
-$0.8M
2024
2027
2030
2033
2036
Today
Ideal 90: +$0.8M
Steady 70: -$0.1M
Trend: -$0.5M
Confirmed: -$1.3M
Cumulative money in or out since opening (dark line = actual to September 2026). Staying at 780 USR on the renewal rent, with franchise renewal costs at the end of November 2028.
Franchise renewal, November 2028
Renewal would cost about $104k, just as Kovan first turns a profit
| To renew for 5 more years | Cost |
|---|---|
| Renewal fee: 50% of the $120k franchise fee | $60,000 + GST |
| Renovation: at least 10% of the original set-up cost | about $42,000 |
| Legal fees and stamp duty | about $2,000 |
| Upgrades HQ may require | not yet known |
| Total | about $104,000 |
Our request
Waive the renewal fee and renovation requirement for Kovan, or defer them until the outlet has repaid its investment.
On our recent trend, Kovan makes about $1.4k a month in 2028. The renewal would take more than six years of that profit, after $806k already put in.
Franchise agreement clause 3.2 and Schedule items 3-5: term of 5 years from lease handover on 1 December 2023; renewal notice due 6-12 months before expiry (Dec 2027 - May 2028).
An option we are exploring
Move Kovan into Paya Lebar Kovan CC, beside Kovan MRT
| Per month, 2027 | Stay at 780 USR | Move, bid $4.00-4.50 psf |
|---|---|---|
| Rent and service charge | $19.9k | $10.1k-11.2k |
| Profit, recent trend | -$0.2k | +$7.9k-6.8k |
| Profit by 2029 | +$2.9k | +$13.4k-12.2k |
| Children to break even | 52 | 38-39 |
Same catchment. 215 Tampines Road, level 3, 2,296 sq ft, a short walk from today's centre.
Public tender. Education use only, 3+3 years, closes 27 October 2026.
Cost to move. About $260k for fit-out and reinstatement, repaid in about 2-3 years.
Excluding GST. Subject to PA confirming student care and early opening hours are allowed.
For discussion
Where HQ's help would make the biggest difference
Renewal fee
Waive or defer the 2028 renewal fee and renovation requirement.
The relocation
HQ's approval, a leaner fit-out standard, and a fresh term under the new agreement.
Outlet spacing
How new outlets near Kovan are planned, and protecting each outlet's catchment.
Marketing and leads
HQ campaigns for Kovan, and Kovan-area enquiries passed to us first.
We believe in PlayFACTO and in Kovan. We want to make this outlet work for the long term.
Our families are growing and our team is strong. With the right rent and HQ's support, Kovan can be a profitable outlet at the enrolment we already have.
Thank you, Justin.