How to Finance a Kid to Kid Franchise: Resale Store Startup
By Anthony Cornella
A Kid to Kid franchise loan funds a children’s resale store, a retail business with an unusual twist: most of the inventory is bought from local parents rather than ordered from a supplier. That changes how much cash you need on hand, how the opening budget is built and how a lender reads your projections.
Below we cover what Kid to Kid is, where to find each cost in the Franchise Disclosure Document (FDD), how the brand’s SBA Franchise Directory listing helps and which loan types fit a resale store. We could not open the franchisor’s current FDD or investment pages, so we point to the right Item for each figure instead of quoting it.
US Professional Funding is not affiliated with, sponsored by or endorsed by Kid to Kid; the name is used only to describe the business. Figures in the franchisor’s disclosure document can change, loan programs vary, and every loan is subject to approval. Nothing here is legal, tax or investment advice.
Kid to Kid Franchise Loan at a Glance
- Concept: a resale store that buys gently used children’s clothing, toys and baby gear from parents and resells them at a fraction of new retail prices.
- History: the company reports it was founded in 1992 by Shauna Sloan and now has more than 100 stores across the US, plus locations in Portugal, Spain and Canada.
- SBA Franchise Directory: listed under code S0942 with no additional note, so SBA 7(a) financing can be considered.
- Franchise fee, royalty and marketing fund: disclosed in Items 5 and 6 of the current FDD.
- Estimated initial investment: Item 7 of the FDD lists the range and line items, including opening inventory purchases.
- Owner qualifications: the franchisor sets net worth and liquidity expectations during discovery; get them in writing.
- Typical loan uses: leasehold improvements, fixtures and racks, point-of-sale and buying systems, opening inventory and working capital for ongoing buying.
What Is Kid to Kid?
Kid to Kid is a children’s resale franchise. The company says it was founded in 1992 by Shauna Sloan around a simple idea, that kids grow faster than paychecks, and it now reports more than 100 stores in the US along with international locations.
The model works in two directions. Parents bring in items their children have outgrown and, according to the company, are paid cash on the spot for what the store accepts. Shoppers then buy those items at prices well below new. Items the store declines can be donated to local charities.
Why lenders view resale differently. Lenders understand retail, but a resale store’s cost of goods depends on what the buying counter pays each day, not on a supplier invoice. A lender will want to see that you understand buying margins, how fast inventory turns and how much cash you need to keep the buying counter open. The upside is that inventory is sourced locally, so the store is not dependent on shipments to restock.
Kid to Kid Franchise Costs to Cover With Your Loan
Request the current FDD and read Items 5, 6 and 7 before you build a budget. Each cost below appears there.
Initial franchise fee. Item 5 states the fee due when you sign and any reduced fee for additional stores.
Lease and build-out. Most resale stores lease space in a neighborhood shopping center. Build-out typically covers flooring, lighting, fitting rooms, a buying counter and back-room space for sorting and pricing.
Fixtures and equipment. Clothing racks, shelving, toy and gear displays, signage, the point-of-sale system and the software used to price and track items bought from the public.
Opening inventory. A resale store cannot open with empty racks. Expect the opening budget to include buying from the community before the grand opening, which is cash spent before any sales come in.
Opening costs and working capital. Training, pre-opening marketing, insurance, deposits and the additional funds Item 7 estimates for the first months.
Total investment. Expect the Item 7 table to include line items like these:
- Initial franchise fee
- Rent and security deposits
- Leasehold improvements
- Fixtures, racks and displays
- Point-of-sale hardware and software
- Signage
- Opening inventory purchases
- Training expenses and grand-opening marketing
- Additional funds for the initial operating period
Size your loan request to the Item 7 total, and ask the franchisor how much of the inventory line is typically spent before opening.
Ongoing Fees and How They Affect Your Loan
Royalty and marketing. Item 6 describes the royalty and any brand fund contribution, typically a percentage of gross sales, plus any local advertising requirement and technology fees.
How lenders factor these costs in. When a lender sizes a Kid to Kid franchise loan, it starts with projected sales, subtracts the cost of buying inventory from parents, then deducts royalties, marketing, rent and payroll before checking whether the remaining cash covers loan payments. Because buying is a daily cash outflow, lenders pay close attention to how your projections handle it.
Franchisor Requirements for New Owners
Kid to Kid sets its own net worth, liquidity and experience expectations. We could not verify the current thresholds from the franchisor’s own materials, so ask the development team for them and for the current FDD.
Ask too about training on buying and pricing, whether the owner must be in the store full time, and how the franchisor helps with site selection.
The approval process. Expect an inquiry, an application, FDD review, discovery calls or a visit, and final approval. Start your financing conversation during discovery so your lease and loan timelines match.
Ways to Own a Kid to Kid
A new store. You select a site, build out the space, buy opening inventory and train staff. Lenders underwrite a new store on projections, your liquidity and the strength of the site. Our page on retail store start-up financing explains how these loans are structured.
An existing store. When a franchisee sells, a buyer gets an established customer base, a trained team and inventory already on the racks. Lenders can underwrite actual sales and buying history, and the franchisor must approve the transfer. See our retail business acquisition financing page and our article on buying a franchise resale.
Financing Options for a Kid to Kid Franchise
SBA 7(a) loans. With the brand on the SBA Franchise Directory, an SBA 7(a) loan can combine the franchise fee, build-out, fixtures, opening inventory and working capital in one loan. For a leased retail store, this is often the most practical route.
SBA 504 loans. If you plan to buy the building your store occupies, SBA 504 financing is designed for owner-occupied real estate. Most resale stores lease, so this applies only to owners buying property.
Conventional term loans. Borrowers with strong liquidity or existing stores may qualify for a conventional business loan, underwritten on its own terms.
Equipment financing. Racks, displays, point-of-sale systems and signage can be financed separately to protect cash for buying. Learn about retail equipment financing and leasing.
Working capital and lines of credit. Back-to-school and seasonal wardrobe changes bring waves of both buying and selling. A line of credit helps you keep paying parents for quality items when sales lag behind purchases; see our retail working capital and lines of credit.
Seller financing on resales. A seller may carry part of the price of an existing store. Any seller note is typically subordinate to the senior loan, and SBA rules may limit its terms, so discuss it with your lender early.
SBA Loans for Kid to Kid Franchisees
SBA lenders generally require that a franchise brand appear on the SBA Franchise Directory, which shows the franchise agreement has been reviewed for eligibility.
Directory status. Kid to Kid is listed under code S0942 with no special note. In plain terms, your lender does not need extra franchise-related documents beyond the standard ones and can focus on you and the store. A listing does not approve any borrower, and status can change.
The SBA 7(a) program maximum is currently $5 million, though program rules can change.
SBA application tips. Bring the current FDD and franchise agreement, a signed lease or letter of intent, build-out bids, proof of your equity injection and monthly projections that separate buying costs from other expenses. Our article on writing a franchise business plan for an SBA loan shows how to lay them out.
How Lenders Evaluate a Kid to Kid Deal
Personal credit and financial history. Expect a credit check, tax returns, a personal financial statement and a personal guarantee.
Net worth and liquidity. Lenders want your equity contribution plus reserves after closing. Reviewing how much franchise you can afford helps set realistic targets.
Industry and management experience. Retail, merchandising or management experience helps, as does comfort with hiring and training hourly staff.
Business plan and projections. Show sales ramping as buying builds the inventory, a buying cost that reflects the franchisor’s pricing system, and seasonal swings in both directions.
The FDD and franchise agreement. Lenders check Item 17 for term, renewal and transfer rules, Item 10 for any franchisor financing and whether Item 19 includes financial performance representations.
Site and lease. The lease and renewal options should run at least as long as the loan, and the location should be convenient for parents bringing in items to sell.
Historical financials for resales. For an existing store, expect to share profit and loss statements, sales reports and buying records.
Inventory and Buying Deep Dive
Inventory is bought, not ordered. Every item on the floor was purchased from a parent at the buying counter. That means inventory cash goes out continuously, and lenders want to see it modeled.
Opening inventory is a pre-opening cost. Stores build their racks before the doors open, so a share of the loan or your equity is spent before any revenue arrives.
Seasonality matters. Families clear out closets when seasons change and before school starts. Owners who plan a cash reserve for those buying surges avoid turning away good items.
Multi-Unit Growth and Development Agreements
Owners who do well with a first store sometimes add a second in a nearby market. Lenders underwrite each new store on its own projections plus the cash flow of the stores you already own, and they will want consolidated financials. Our article on multi-unit franchise financing explains how lenders handle a growing group. If the franchisor offers development rights, compare the opening schedule with your realistic capacity to fund and staff each store.
Real-World Scenarios
A parent turned retailer. A former retail manager opens a store in a family-heavy suburb. An SBA 7(a) loan covers the franchise fee, build-out, fixtures and opening inventory, with a working capital reserve for buying.
A buyer of an established store. A buyer acquires an operating store from a retiring franchisee. The lender reviews actual sales and buying history, the franchisor approves the transfer and a seller note sits behind the senior loan.
An owner adding a second store. An owner with a stable first store opens another nearby, financing fixtures separately and using a line of credit to fund opening buying.
Common Mistakes to Avoid
- Underestimating the cash needed to keep the buying counter open
- Treating opening inventory as an afterthought in the budget
- Ignoring seasonal buying surges in cash flow projections
- Signing a lease without enough parking or easy drop-off access
- Relying on an outdated FDD instead of the current Items 5, 6 and 7
- Overlooking transfer terms when buying an existing store
For more, read about the loan mistakes retail store owners make.
Next Steps to Finance Your Kid to Kid Franchise
Step 1: Get the current FDD. Read Items 5, 6, 7, 10, 17 and 19.
Step 2: Confirm the franchisor’s requirements. Ask for net worth, liquidity and experience expectations in writing.
Step 3: Talk with a financing specialist. Compare SBA 7(a) and conventional options early. Our SBA loan calculator offers planning estimates only.
Step 4: Secure a site. Negotiate a lease that fits the loan term and your buying traffic.
Step 5: Build projections. Model sales, buying costs, seasonality and every Item 6 fee.
Step 6: Apply and close. Submit your package and align funding with build-out and opening inventory dates.
Kid to Kid Franchise Loan FAQs
How much does it cost to open a Kid to Kid?
Item 7 of the current FDD gives the estimated initial investment. Costs vary with store size, build-out and local rents.
What is the Kid to Kid franchise fee?
Item 5 discloses the initial franchise fee and any discount for additional stores.
What royalty does Kid to Kid charge?
Item 6 describes the royalty, marketing fund and other ongoing fees.
How much liquid capital or net worth do I need?
The franchisor sets these thresholds during qualification, and lenders also expect post-closing reserves.
Can I get an SBA loan for a Kid to Kid franchise?
Yes. The brand is listed on the SBA Franchise Directory under code S0942, so SBA 7(a) financing can be considered, subject to approval.
Can a loan cover opening inventory?
Yes. An SBA 7(a) loan can include opening inventory and working capital along with build-out and fixtures.
Can I buy an existing Kid to Kid store?
Yes, if a franchisee is selling and the franchisor approves the transfer.
Can a first-time business owner get a Kid to Kid franchise loan?
Yes, if the franchisor approves you and you meet the lender’s credit and equity standards. Retail or management experience helps.
Does Kid to Kid offer financing?
Item 10 of the FDD discloses any franchisor financing. If none is offered, you arrange your own.
How long is the franchise term?
Item 17 sets out the term and renewal rights. Lenders prefer a term that covers the full loan.
Final Thoughts
A Kid to Kid franchise loan should reflect how resale really works: inventory bought from parents every day, an opening inventory built before launch and seasonal surges in buying. With the brand on the SBA Franchise Directory, SBA 7(a) financing is available to qualified borrowers. Start with the current FDD and a financing conversation before you sign a lease.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment and working capital. Learn more about our franchise financing and retail business financing programs.
