When and How to Tell Staff and Parents You Are Selling Your Preschool

When do you have to tell parents that your preschool is being sold?

ECDA's Code of Practice sets the latest point: at least 3 months before the targeted transfer date for a transfer of licence, and at least 1 month before the change for a share sale that changes the Key Appointment Holders.

Which deadline applies depends on how the centre is sold. If the buyer's own company takes over the centre, the licence has to be transferred. If the buyer buys the shares of your company, the licensee stays the same and only the directors change. Our guide to share sales and asset sales explains the difference.

These are minimums, not targets. Because ECDA wants proof of the parent letter with a transfer of licence application, in practice parents are told at the same time as, or just before, the application goes in. Most owners therefore spend the months before that keeping the sale confidential, and then move quickly from signing to telling staff and parents.

What must the written notice to parents say?

For a transfer of licence, the letter must say that the transfer is subject to the CLO's approval and that the current licensee remains responsible for the centre's management and operations until the transfer takes effect (s3.3.10).

Beyond what the ECDA Code of Practice for Operators requires, a good letter answers the questions parents will actually ask:

• Who is taking over: the incoming operator's name and a line on their background in early childhood education.
• When: the targeted date, and that it depends on ECDA's approval.
• What stays the same: on a transfer of licence the new licensee takes over the centre's existing operations, including the fee structure and programmes (s3.3.7), and any changes can only be made after the transfer, subject to ECDA's notice periods (s3.3.8).
• Fees: any increase in registration fee, deposit or programme fees needs written notice to parents and ECDA no later than 1 September of the year before it takes effect (s9.2.1), so there is no sudden fee change at handover.
• Who to contact: a named person, usually the Principal, and the date of a parent session.

For a share sale, ECDA also asks for documentation of the centre's communication plans with parents and its efforts to maintain quality of care (s3.5.5). Write the plan down before you send the letter, because you will need to submit it anyway.

How do you keep the sale confidential until then?

Share information only with screened buyers who have signed a non-disclosure agreement, and market the centre under an anonymous code rather than its name.

Word of a possible sale travels fast in a preschool. A teacher who hears a rumour may start job hunting, and a parent may enrol a younger sibling elsewhere. Both reduce the value of what you are selling, and neither can be undone if the deal falls through. Practical steps that help:

• Advertise under a code (Edugrow uses codes such as EG149) and describe the location broadly.
• Release the name, address and detailed figures only after an NDA is signed and the buyer has been screened.
• Arrange buyer visits after hours or at quiet times, and introduce visitors in neutral terms.
• Keep documents off shared centre computers and out of staff group chats.
• Agree in the Letter of Intent or Sale and Purchase Agreement who will tell staff and parents, when, and with what message.

Decide early what you will say if someone asks directly. A short, honest holding line ("we talk to many people about the future of the centre; nothing is changing for the children") is better than a denial you will have to take back.

Who should you tell first?

Tell your Principal and any key staff first, then all staff, then parents, with only a short gap between each step.

The order matters because each group will hear from the one before it. Teachers should never learn about a sale from a parent, and parents should hear it from the centre, not from a teacher's resignation.

The Principal is the most important person in this sequence. Every licensed centre must have a full-time Principal approved by ECDA (s4.2.1, s4.2.2), and buyers value continuity in that role. Many buyers will want to meet the Principal during due diligence, so plan that conversation rather than letting it happen by accident. Some owners agree a retention or completion bonus for the Principal, paid by the seller, the buyer or both.

What should you say to staff?

Tell them who the buyer is, when the change happens, what happens to their employment, and who they can ask.

The legal position on employment depends on the deal structure. The Ministry of Manpower's guidance on transfer of employment says that when a business is transferred, employees move to the new employer with no break in employment and on terms that are not less favourable. It also says affected employees or their union must be notified of the transfer within a reasonable time and told its terms, so they can consult the company. MOM lists a transfer of shares as not being a transfer of employment: in a share sale the company remains the employer, so contracts simply continue. Our guide to what happens to staff when a centre is sold covers this in detail.

A staff briefing works best in person, with the buyer present for at least part of it. Cover:

• Why you are selling, in a sentence, and why you chose this buyer.
• That their employment continues, and on what basis (the same company in a share sale, the buyer's entity on the same terms in a business transfer).
• Who they will report to after completion.
• What the buyer has said about its plans, and what it has not yet decided.
• That parents will be told on a set date, and that staff should not discuss it before then.

How do you handle anxious staff?

Expect questions about pay, roles and job security, answer what you can, and be honest about what is not yet decided.

Teachers worry about whether they will be kept on, whether their pay will change, and whether the new owner will run the centre differently. In a business transfer, MOM's guidance is that terms cannot change as part of the transfer unless the employee agrees. Where the buyer has firm plans, such as a new curriculum or a new uniform, let the buyer explain them. Avoid promising things that are the buyer's decision, such as future pay rises. Offer one-to-one conversations for anyone who wants them, and check in again a week later.

How do you handle anxious parents?

Hold a parent session where the incoming operator introduces themselves, and keep teachers and routines stable through the handover.

Parents mainly want to know that their child's teachers, routines and fees will not change overnight. ECDA's rules help you here: the licensee must ensure that care and education are not compromised during the transition (s3.3.6), and changes such as a new name, curriculum or fee increase come only after the transfer and with their own notice periods (s3.3.8). Say so plainly. Practical steps that reduce withdrawals:

• Send the letter and hold the session within days of each other, so the question "who is the buyer?" is answered quickly.
• Have the Principal and familiar teachers present at the session.
• Prepare a short written FAQ covering fees, deposits, teachers, programmes and contact details.
• Give a named contact for follow-up questions, and reply quickly.
• Keep the daily experience unchanged in the first weeks after handover.

Deposits and fees paid in advance also need a clear answer. How they move between seller and buyer is settled in the sale agreement; our guide to prepaid fees and deposits at completion explains the usual approach.

What if the sale falls through after you have told people?

Tell staff and parents promptly that the centre will continue under your ownership, and keep the message short and calm.

This is the main reason to tell people only once a buyer is committed and the key risks have been tested in due diligence. If the ECDA approval, the landlord's consent or the buyer's financing is uncertain, try to resolve it before the announcement, or make the parent letter clear that the change is still subject to approval, as s3.3.10 requires for a transfer of licence.

How Edugrow helps

Edugrow runs sales confidentially: buyers sign NDAs before receiving information, and listings use an anonymous code, never the centre name. Once a buyer is committed, we help you plan the timing and sequence of staff and parent communications so they fit ECDA's notice periods and the deal timetable, and we coordinate the handover with the buyer. Edugrow has advised on 70+ education business transactions since 2014. If you are thinking about selling, start with a conversation through our selling page.