A daycare buyer checklist covers whether the childcare licence actually transfers on a change of ownership, whether staff hold the qualifications the province requires, how subsidy and fee-assistance agreements are structured, current enrollment against the waitlist, staffing ratios, and the facility’s inspection history.
Reviewed
This checklist covers what to verify before buying a Canadian licensed child care centre or home-based daycare business. A daycare’s ability to operate at all depends on a licence that generally does not simply follow a change of ownership, on qualified staff who may or may not stay, and on ratios and inspections that a new operator inherits from day one, which makes licensing the starting point here rather than a formality handled alongside the financials.
Confirm the childcare licence and whether it moves with a sale
Confirm whether the existing childcare licence transfers automatically on a change of ownership or whether the new operator needs a fresh licence application and inspectionIn Ontario, a licence issued under the Child Care and Early Years Act is tied to the licensee, and a change of ownership commonly triggers a new application rather than a simple transfer; other provinces license child care under their own equivalent legislation.
Ask for the facility’s full inspection history, including any compliance orders, and confirm every outstanding item has actually been resolved, not just scheduledA pattern of repeat findings on the same issue — supervision, sanitation, physical space — points to an operational problem a new licence application can force back to the surface.
Confirm current criminal record and vulnerable-sector screening is on file for every staff member, and check how recently each was completedA missing or expired screening on even one staff member can hold up a new operator’s licence approval, since a childcare licence depends on the people in the building as much as the space itself.
Review staffing, qualifications and ratios
Confirm which staff hold the early childhood educator registration or equivalent qualification the province requires, and whether they intend to stay through the transitionA licensed capacity that assumes a certain number of qualified educators can become unusable overnight if enough of those staff leave with the previous owner.
Confirm current staff-to-child ratios are actually being met day to day, not just on paper, across every room and age groupA ratio shortfall discovered by an inspector after closing becomes the new owner’s compliance problem, even if the gap started under the previous operator.
Check enrollment, waitlist and funding agreements
Get verified current enrollment and a documented waitlist, and confirm how much of both depends on a subsidy or fee-assistance agreement with a municipality or the provinceA subsidy or fee-assistance agreement is generally its own contract with its own renewal and reporting conditions, and it is worth confirming separately whether it continues under new ownership rather than assuming it does.
Review parent contracts for notice periods, deposit terms and what happens to a family’s spot if the operator changesA weak or informal parent contract gives a buyer little protection against a wave of withdrawals right after the sale is announced.
Inspect the facility and confirm insurance
Confirm the facility meets the fire, building code and playground safety requirements specific to licensed child care, not just general commercial codeLicensed child care space carries requirements — exits, playground surfacing, sightlines for supervision — beyond what a typical commercial space needs to meet, and a facility that passed a general inspection is not automatically compliant for this use.
Confirm current general liability insurance and ask whether any incident reports or insurance claims have been filedAn incident history involving children in care is worth understanding in detail, both for the operational risk it points to and for what it may do to insurance cost going forward.
Deavo is an advertising and listings platform, not a brokerage, law firm or valuation firm. This page is general information, not legal, tax, accounting or valuation advice, and rules differ by province. Confirm anything you rely on with a qualified professional before you act on it.