While Mom works, Kinder-Care plays part-time parent
The idea was as obvious as the mess created by a six-year-old tackling a bowl of spaghetti. If Holiday Inns sanitized and made respectable the once tacky motel, and McDonald's gave the nation hamburgers without heartburn, why couldn't the same techniques of standardization and mass marketing be applied to day-care centers for children?
Today, at 250 locations in and near major cities, the green Holiday Inn marquee and the yellow McDonald's arches have company: the red steeple housing a black plastic nonringing bell, the symbol of Alabama-based Kinder-Care Learning Centers, Inc. By offering a service that is safe, uniform and reasonably priced, it has become the largest network of places where parents can deposit offspring for a few liberating hours a day.
Kinder-Care is the prodigy of Perry Mendel, 56, a stocky, effusive former real estate developer whom some call the Colonel Sanders of child care. He opened the first center in Montgomery in 1969, pouring in $15,000 of his own money and $185,000 from assorted investors. The company has spread to 23 states, swamping immature competition (La Petite Academies, with 115 units, is a distant second). Kinder-Care is growing almost daily, and two weeks ago, Mendel announced that his company will acquire for stock Living and Learning Centers. Inc., which now operates 33 centers in New England.
With weekly fees of $28 (in Rome, Ga.) to $42 (in Columbia, Md.) and with 22,000 kids under its wing, Kinder-Care had revenues last year of $12.8 million, up 41% from the year before. Earnings have grown for seven straight years, to $745,180 in 1977; for the first nine months of this fiscal year they were up 65%. Kinder-Care stock, first offered in 1972, jumped from less than $1 in 1976 to $29 last week before a two-for-one split Friday. It has made a million dollars for each of 14 ground-floor investors from Montgomery; Mendel alone has stock profits of more than $5 million. Says Montgomery Investment Banker Nimrod Frazer, whose holdings are worth $335,000: "Kinder-Care is the biggest piece of capitalism that Montgomery has ever had."
The company has ridden several big social and economic changes. The women's movement, the divorce epidemic, inflation—all beckoned mothers to seek jobs outside the home. Even the decline in the birth rate boosted Kinder-Care. As school enrollments dropped, laid-off teachers were quite willing to work for Kinder-Care at the federal minimum of $2.65 an hour. Forty percent of Mendel's 2.300 day-care employees are former teachers; many of the rest are housewives in need of extra cash. Center directors receive only $11,000 a year, but Mendel offers them a plum: their kids can attend free.