Educators fear profits are coming before kids as the number of commercial operators entering the early childhood market continues to grow.
Critics say the large, for-profit franchises are driving out community organisations, including kindergartens.
Teachers spoken to by the Herald were concerned about what they had seen in some large centres including evidence of poor care with staff not recognising children's speech impediments or hearing problems.
However the largest operators say their business-based structures allow them to put more money back into the centres, including professional development for teachers.
Academics, unions, teachers and opposition MPs believe there are quality issues in early childhood education which can be linked to the rise of for-profit centres.
They point to figures that show community-based kindergartens get the best ERO reviews.
NZ Educational Institute president Louise Green said: "With corporates, their first priority is to return money to shareholders. In community-based services the first priority is always children.
"I think people can see a lot of money in education. You have to ask yourself why so many people are getting into it."
Figures from the Ministry of Education show the number of enrolments in privately owned early childhood education (ECE) operations has doubled in the past decade, with 90,000 kids now in private centres. In contrast enrolments fell in kindergartens by 22 per cent to 25,000.
The ministry spends about $1.5 billion on ECE annually.
Prospectus documents from newly listed company Evolve Education, which has bought a 4 per cent share of the market with almost 100 centres including home-based service Porse, show it plans to make $16 million in its first year. It said 69 per cent of its revenue was from government funding.
Evolve chief executive Alan Wham said the requirement to make a profit did not undercut quality.
"Quite the contrary. Having a successful business means we can invest in maintaining high-quality environments, ensure centres are resourced well and we can offer significant professional development to the teachers in our centres," he said. Evolve would invest a seven-figure sum in professional development over the next year.
Sarsha Baker, a centre manager at Hummingbirds, bought by Evolve, said the professional development had included staff taking a first-aid course. "They are really supportive."
The biggest operator in the sector, the company formerly known as Kidicorp but now a charity called Best Start, which has more than 250 centres, said profit and quality were not connected.
Chief executive Wayne Wright said: "Quality comes from the knowledge and attitude of the staff in the centres and that comes from being a good employer and providing professional development, training, and support."
Manurewa supervisor Julie Brice, from Finlayson Park Childcare, said she had had children transfer to her community-based centre from franchises with health problems that should have been picked up.
"No one has realised they had glue ear or vision problems."
Mrs Brice said that when the nearby centres opened - offering freebies such as lunch, nappies and transport - numbers at her centre dropped.
Labour MP Chris Hipkins said similar things were happening across the country. "There is no planning around the provision - so in some cases the big operations are opening up literally over the fence from community organisations and forcing them out of business."
Education Minister Hekia Parata said it was not important who owned early childhood centres, but the quality of the service they provided. She said the sector had always had a diverse range of providers.
Early childhood education
• $1.5 billion goes into early childhood education every year.
• 90,000 kids attend for-profit centres compared with 25,000 who go to kindergarten.
• Children spend on average 21 hours a week in care, up from 15 hours in 2000.
• ERO says quality is best in kindergartens but there is little difference between community and private centres.
• More than 120 centres are licensed to have 150 children on site.
• Tomorrow: What it's like being a teacher in an understaffed centre